[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1582 Placed on Calendar Senate (PCS)]
<DOC>
Calendar No. 66
119th CONGRESS
1st Session
S. 1582
To provide for the regulation of payment stablecoins, and for other
purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 1, 2025
Mr. Hagerty (for himself, Ms. Lummis, and Mr. Scott of South Carolina)
introduced the following bill; which was read the first time
May 5, 2025
Read the second time and placed on the calendar
_______________________________________________________________________
A BILL
To provide for the regulation of payment stablecoins, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Guiding and Establishing National
Innovation for U.S. Stablecoins Act'' or the ``GENIUS Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Appropriate federal banking agency.--The term
``appropriate Federal banking agency'' has the meaning given
that term in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813).
(2) Bank secrecy act.--The term ``Bank Secrecy Act''
means--
(A) section 21 of the Federal Deposit Insurance Act
(12 U.S.C. 1829b);
(B) chapter 2 of title I of Public Law 91-508 (12
U.S.C. 1951 et seq.); and
(C) subchapter II of chapter 53 of title 31, United
States Code.
(3) Board.--The term ``Board'' means the Board of Governors
of the Federal Reserve System.
(4) Comptroller.--The term ``Comptroller'' means the Office
of the Comptroller of the Currency.
(5) Corporation.--The term ``Corporation'' means the
Federal Deposit Insurance Corporation.
(6) Digital asset.--The term ``digital asset'' means any
digital representation of value that is recorded on a
cryptographically secured distributed ledger.
(7) Digital asset service provider.--The term ``digital
asset service provider''--
(A) means a person that, for compensation or
profit, engages in the business in the United States
(including on behalf of customers or users in the
United States) of--
(i) exchanging digital assets for monetary
value;
(ii) exchanging digital assets for other
digital assets;
(iii) transferring digital assets to a
third party;
(iv) acting as a digital asset custodian;
or
(v) participating in financial services
relating to digital asset issuance; and
(B) does not include--
(i) a distributed ledger protocol;
(ii) developing, operating, or engaging in
the business of developing distributed ledger
protocols or self-custodial software
interfaces;
(iii) an immutable and self-custodial
software interface;
(iv) developing, operating, or engaging in
the business of validating transactions or
operating a distributed ledger node; or
(v) participating in a liquidity pool or
other similar mechanism for the provisioning of
liquidity for peer-to-peer transactions.
(8) Distributed ledger.--The term ``distributed ledger''
means technology in which data is shared across a network that
creates a public digital ledger of verified transactions or
information among network participants and cryptography is used
to link the data to maintain the integrity of the public ledger
and execute other functions.
(9) Distributed ledger protocol.--The term ``distributed
ledger protocol'' means publicly available and accessible
executable software deployed to a distributed ledger, including
smart contracts or networks of smart contracts.
(10) Federal branch.--The term ``Federal branch'' has the
meaning given that term in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813).
(11) Federal qualified payment stablecoin issuer.--The term
``Federal qualified payment stablecoin issuer'' means--
(A) a nonbank entity, other than a State qualified
payment stablecoin issuer, approved by the Comptroller,
pursuant to section 5, to issue payment stablecoins;
(B) an uninsured national bank--
(i) that is chartered by the Comptroller,
pursuant to title LXII of the Revised Statutes;
and
(ii) that is approved by the Comptroller,
pursuant to section 5, to issue payment
stablecoins; and
(C) a Federal branch that is approved by the
Comptroller, pursuant to section 5, to issue payment
stablecoins.
(12) Foreign payment stablecoin issuer.--The term ``foreign
payment stablecoin issuer'' means an issuer of a payment
stablecoin that is--
(A) organized under the laws of or domiciled in a
foreign country, a territory of the United States,
Puerto Rico, Guam, American Samoa, or the Virgin
Islands; and
(B) not a permitted payment stablecoin issuer.
(13) Institution-affiliated party.--With respect to a
permitted payment stablecoin issuer, the term ``institution-
affiliated party'' means any director, officer, employee, or
controlling stockholder of the permitted payment stablecoin
issuer.
(14) Insured credit union.--The term ``insured credit
union'' has the meaning given that term in section 101 of the
Federal Credit Union Act (12 U.S.C. 1752).
(15) Insured depository institution.--The term ``insured
depository institution'' means--
(A) an insured depository institution, as defined
in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813); and
(B) an insured credit union.
(16) Lawful order.--The term ``lawful order'' means any
final and valid writ, process, order, rule, decree, command, or
other requirement issued or promulgated under Federal law,
issued by a court of competent jurisdiction or by an authorized
Federal agency pursuant to its statutory authority, that--
(A) requires a person to seize, freeze, burn, or
prevent the transfer of payment stablecoins issued by
the person;
(B) specifies the payment stablecoins or accounts
subject to blocking with reasonable particularity; and
(C) is subject to judicial or administrative review
or appeal as provided by law.
(17) Monetary value.--The term ``monetary value'' means a
national currency or deposit (as defined in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813)) denominated in
a national currency.
(18) Money.--The term ``money''--
(A) means a medium of exchange currently authorized
or adopted by a domestic or foreign government; and
(B) includes a monetary unit of account established
by an intergovernmental organization or by agreement
between 2 or more countries.
(19) National currency.--The term ``national currency''
means each of the following:
(A) A Federal Reserve note (as the term is used in
the first undesignated paragraph of section 16 of the
Federal Reserve Act (12 U.S.C. 411)).
(B) Money standing to the credit of an account with
a Federal Reserve Bank.
(C) Money issued by a foreign central bank.
(D) Money issued by an intergovernmental
organization pursuant to an agreement by 2 or more
governments.
(20) Nonbank entity.--The term ``nonbank entity'' means a
person that is not a depository institution or subsidiary of a
depository institution.
(21) Offer.--The term ``offer'' means to make available for
purchase, sale, or exchange.
(22) Payment stablecoin.--The term ``payment stablecoin''--
(A) means a digital asset--
(i) that is, or is designed to be, used as
a means of payment or settlement; and
(ii) the issuer of which--
(I) is obligated to convert,
redeem, or repurchase for a fixed
amount of monetary value, not including
a digital asset denominated in a fixed
amount of monetary value; and
(II) represents that such issuer
will maintain, or create the reasonable
expectation that it will maintain, a
stable value relative to the value of a
fixed amount of monetary value; and
(B) does not include a digital asset that--
(i) is a national currency;
(ii) is a deposit (as defined in section 3
of the Federal Deposit Insurance Act (12 U.S.C.
1813)), including a deposit recorded using
distributed ledger technology; or
(iii) is a security, as defined in section
2 of the Securities Act of 1933 (15 U.S.C.
77b), section 3 of the Securities Exchange Act
of 1934 (15 U.S.C. 78c), or section 2 of the
Investment Company Act of 1940 (15 U.S.C. 80a-
2), except that, for the avoidance of doubt, no
bond, note, evidence of indebtedness, or
investment contract that was issued by a
permitted payment stablecoin issuer shall
qualify as a security solely by virtue of its
satisfying the conditions described in
subparagraph (A), consistent with section 17 of
this Act.
(23) Permitted payment stablecoin issuer.--The term
``permitted payment stablecoin issuer'' means a person formed
in the United States that--
(A) is--
(i) a subsidiary of an insured depository
institution that has been approved to issue
payment stablecoins under section 5;
(ii) a Federal qualified payment stablecoin
issuer; or
(iii) a State qualified payment stablecoin
issuer; and
(B) does not offer a payment of yield or interest
on its issued payment stablecoin.
(24) Person.--The term ``person'' means an individual,
partnership, company, corporation, association, trust, estate,
cooperative organization, or other business entity,
incorporated or unincorporated.
(25) Primary federal payment stablecoin regulator.--The
term ``primary Federal payment stablecoin regulator'' means--
(A) with respect to a subsidiary of an insured
depository institution (other than an insured credit
union), the appropriate Federal banking agency of such
insured depository institution;
(B) with respect to an insured credit union or a
subsidiary of an insured credit union, the National
Credit Union Administration;
(C) with respect to a State chartered depository
institution not specified under subparagraph (A), the
Corporation, the Comptroller, or the Board; and
(D) with respect to a Federal qualified payment
stablecoin issuer, the Comptroller.
(26) Registered public accounting firm.--The term
``registered public accounting firm'' has the meaning given
that term under section 2 of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7201).
(27) State.--The term ``State'' means each of the several
States of the United States, the District of Columbia, and each
territory of the United States.
(28) State chartered depository institution.--The term
``State chartered depository institution'' has the meaning
given the term ``State depository institution'' in section 3(c)
of the Federal Deposit Insurance Act (12 U.S.C. 1813(c)).
(29) State payment stablecoin regulator.--The term ``State
payment stablecoin regulator'' means a State agency that has
primary regulatory and supervisory authority in such State over
entities that issue payment stablecoins.
(30) State qualified payment stablecoin issuer.--The term
``State qualified payment stablecoin issuer'' means an entity
that--
(A) is legally established under the laws of a
State and approved to issue payment stablecoins by a
State payment stablecoin regulator; and
(B) is not an uninsured national bank chartered by
the Comptroller pursuant to title LXII of the Revised
Statutes, a Federal branch, an insured depository
institution, or a subsidiary of such national bank,
Federal branch, or insured depository institution.
(31) Subsidiary.--The term ``subsidiary'' has the meaning
given that term in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813).
(32) Subsidiary of an insured credit union.--With respect
to an insured credit union, the term ``subsidiary of an insured
credit union'' means--
(A) an organization providing services to the
insured credit union that are associated with the
routine operations of credit unions, as described in
section 107(7)(I) of the Federal Credit Union Act (12
U.S.C. 1757(7)(I));
(B) a credit union service organization, as such
term is used under part 712 of title 12, Code of
Federal Regulations, with respect to which the insured
credit union has an ownership interest or to which the
insured credit union has extended a loan; and
(C) a subsidiary of a State chartered insured
credit union authorized under State law.
SEC. 3. ISSUANCE AND TREATMENT OF PAYMENT STABLECOINS.
(a) Limitation on Issuers.--It shall be unlawful for any person
other than a permitted payment stablecoin issuer to issue a payment
stablecoin in the United States.
(b) Prohibition on Offers or Sales.--
(1) In general.--Except as provided in subsection (c) and
section 18, beginning on the date that is 3 years after the
date of enactment of this Act, it shall be unlawful for any
digital asset service provider to offer or sell a payment
stablecoin to a person in the United States, unless the payment
stablecoin is issued by a permitted payment stablecoin issuer.
(2) Foreign payment stablecoin issuers.--It shall be
unlawful for any person to offer, sell, or otherwise make
available in the United States a payment stablecoin issued by a
foreign payment stablecoin issuer unless the foreign payment
stablecoin issuer has the technological capability to comply,
and will comply, with the terms of any lawful order or
reciprocal arrangement pursuant to section 18.
(c) Limited Safe Harbors.--
(1) In general.--The Secretary of the Treasury may issue
regulations providing safe harbors from subsection (a) that
are--
(A) consistent with the purposes of the Act;
(B) limited in scope; and
(C) apply to a de minimis volume of transactions,
as determined by the Secretary of the Treasury.
(2) Unusual and exigent circumstances.--If the Secretary of
the Treasury determines that unusual and exigent circumstances
exist, the Secretary may provide limited safe harbors from
subsection (a).
(d) Rulemaking.--The Secretary of the Treasury may, as the
Secretary determines appropriate, issue regulations to implement this
section, including regulations to define statutory terms.
(e) Extraterritorial Effect.--This section is intended to have
extraterritorial effect if conduct involves the offer or sale of a
payment stablecoin to a person located in the United States.
(f) Penalty for Violation.--
(1) In general.--Whoever knowingly participates in a
violation of subsection (a) shall be fined not more than
$1,000,000 for each such violation, imprisoned for not more
than 5 years, or both.
(2) Referral to attorney general.--If a primary Federal
payment stablecoin regulator has reason to believe that any
person has knowingly violated subsection (a), the primary
Federal payment stablecoin regulator may refer the matter to
the Attorney General.
(g) Treatment.--A payment stablecoin that is not issued by a
permitted payment stablecoin issuer shall not be--
(1) treated as cash or a cash equivalent for accounting
purposes;
(2) eligible as cash or a cash equivalent margin and
collateral for futures commission merchants, derivative
clearing organizations, broker-dealers, registered clearing
agencies, and swap dealers; or
(3) acceptable as a settlement asset to facilitate
wholesale payments between banking organizations or by a
payment infrastructure to facilitate exchange and settlement
among banking organizations.
(h) Rule of Construction.--This section shall not apply to--
(1) the direct transfer of digital assets between 2
individuals acting on their own behalf and for their own lawful
purposes, without the involvement of an intermediary;
(2) to any transaction involving the receipt of digital
assets by an individual between an account owned by the
individual in the United States and an account owned by the
individual abroad that are offered by the same parent company;
or
(3) to any transaction by means of a software or hardware
wallet that facilitates an individual's own custody of digital
assets.
SEC. 4. REQUIREMENTS FOR ISSUING PAYMENT STABLECOINS.
(a) Standards for the Issuance of Payment Stablecoins.--
(1) In general.--A permitted payment stablecoin issuer
shall--
(A) maintain reserves backing the outstanding
payment stablecoins of the permitted payment stablecoin
issuer on an at least 1 to 1 basis, with reserves
comprising--
(i) United States coins and currency
(including Federal Reserve notes) or money
standing to the credit of an account with a
Federal Reserve Bank;
(ii) funds held as demand deposits (or
other deposits that may be withdrawn upon
request at any time) or insured shares at an
insured depository institution (including any
foreign branches or agents, including
correspondent banks, of an insured depository
institution), subject to limitations
established by the Corporation and the National
Credit Union Administration, as applicable, to
address safety and soundness risks of such
insured depository institution;
(iii) Treasury bills, notes, or bonds--
(I) with a remaining maturity of 93
days or less; or
(II) issued with a maturity of 93
days or less;
(iv) money received under repurchase
agreements, with the permitted payment
stablecoin issuer acting as a seller of
securities and with an overnight maturity, that
are backed by Treasury bills with a maturity of
93 days or less;
(v) reverse repurchase agreements, with the
permitted payment stablecoin issuer acting as a
purchaser of securities and with an overnight
maturity, that are collateralized by Treasury
notes, bills, or bonds on an overnight basis,
subject to overcollateralization in line with
standard market terms, that are--
(I) tri-party;
(II) centrally cleared through a
clearing agency registered with the
Securities and Exchange Commission; or
(III) bilateral with a counterparty
that the issuer has determined to be
adequately creditworthy even in the
event of severe market stress;
(vi) securities issued by an investment
company registered under section 8(a) of the
Investment Company Act of 1940 (15 U.S.C. 80a-
8(a)), or other registered Government money
market fund, and that are invested solely in
underlying assets described in clauses (i)
through (v);
(vii) any other similarly liquid Federal
Government-issued asset approved by the primary
Federal payment stablecoin regulator, in
consultation with the State payment stablecoin
regulator, if applicable, of the permitted
payment stablecoin issuer; or
(viii) any reserve described in clause (i)
through (iii) or clause (vi) through (vii) in
tokenized form, provided that such reserves
comply with all applicable laws and
regulations;
(B) publicly disclose the issuer's redemption
policy, which shall--
(i) establish clear and conspicuous
procedures for timely redemption of outstanding
payment stablecoins, provided that any
discretionary limitations on timely redemptions
can only be imposed by a State qualified
payment stablecoin regulator, the Corporation,
the Comptroller, or the Board, consistent with
section 7; and
(ii) publicly, clearly, and conspicuously
disclose in plain language all fees associated
with purchasing or redeeming the payment
stablecoins, provided that such fees can only
be changed upon not less than 7 days' prior
notice to consumers; and
(C) publish the monthly composition of the issuer's
reserves on the website of the issuer, containing--
(i) the total number of outstanding payment
stablecoins issued by the issuer; and
(ii) the amount and composition of the
reserves described in subparagraph (A),
including the average tenor and geographic
location of custody of each category of reserve
instruments.
(2) Prohibition on rehypothecation.--Reserves required
under paragraph (1)(A) may not be pledged, rehypothecated, or
reused by the permitted payment stablecoin issuer, either
directly or indirectly, except for the purpose of--
(A) satisfying margin obligations in connection
with investments in permitted reserves under clauses
(iv) and (v) of paragraph (1)(A);
(B) satisfying obligations associated with the use,
receipt, or provision of standard custodial services;
or
(C) creating liquidity to meet reasonable
expectations of requests to redeem payment stablecoins,
such that reserves in the form of Treasury bills may be
sold as purchased securities for repurchase agreements
with a maturity of 93 days or less, provided that
either--
(i) the repurchase agreements are cleared
by a clearing agency registered with the
Securities and Exchange Commission; or
(ii) the permitted payment stablecoin
issuer receives the prior approval of its
primary Federal payment stablecoin regulator or
State payment stablecoin regulator, as
applicable.
(3) Monthly certification; examination of reports by
registered public accounting firm.--
(A) In general.--A permitted payment stablecoin
issuer shall, each month, have the information
disclosed in the previous month-end report required
under paragraph (1)(D) examined by a registered public
accounting firm.
(B) Certification.--Each month, the Chief Executive
Officer and Chief Financial Officer of a permitted
payment stablecoin issuer shall submit a certification
as to the accuracy of the monthly report to, as
applicable--
(i) the primary Federal payment stablecoin
regulator of the permitted payment stablecoin
issuer; or
(ii) the State payment stablecoin regulator
of the permitted payment stablecoin issuer.
(C) Criminal penalty.--Any person who submits a
certification required under subparagraph (B) knowing
that such certification is false shall be subject to
the same criminal penalties as those set forth under
section 1350(c) of title 18, United States Code.
(4) Capital, liquidity, and risk management requirements.--
(A) In general.--The primary Federal payment
stablecoin regulators shall, or in the case of a State
qualified payment stablecoin issuer, the State payment
stablecoin regulator shall, consistent with section 13,
issue regulations implementing--
(i) capital requirements applicable to
permitted payment stablecoin issuers that--
(I) are tailored to the business
model and risk profile of permitted
payment stablecoin issuers;
(II) do not exceed requirements
that are sufficient to ensure the
ongoing operations of permitted payment
stablecoin issuers; and
(III) in the case of the primary
Federal payment stablecoin regulators,
if the primary Federal payment
stablecoin regulators determine that a
capital buffer is necessary to ensure
the ongoing operations of permitted
payment stablecoin issuers, may include
capital buffers that are tailored to
the business model and risk profile of
permitted payment stablecoin issuers;
(ii) the liquidity standard under paragraph
(1)(A);
(iii) reserve asset diversification,
including deposit concentration at banking
institutions, and interest rate risk management
standards applicable to permitted payment
stablecoin issuers that--
(I) are tailored to the business
model and risk profile of permitted
payment stablecoin issuers; and
(II) do not exceed standards that
are sufficient to ensure the ongoing
operations of permitted payment
stablecoin issuers; and
(iv) appropriate operational, compliance,
and information technology risk management
principles-based requirements and standards,
including Bank Secrecy Act and sanctions
compliance standards, that--
(I) are tailored to the business
model and risk profile of permitted
payment stablecoin issuers; and
(II) are consistent with applicable
law.
(B) Rule of construction.--Nothing in this
paragraph shall be construed to limit--
(i) the authority of the primary Federal
payment stablecoin regulators, in prescribing
standards under this paragraph, to tailor or
differentiate among issuers on an individual
basis or by category, taking into consideration
the capital structure, business model risk
profile, complexity, financial activities
(including financial activities of
subsidiaries), size, and any other risk-related
factors of permitted payment stablecoin issuers
that a primary Federal payment stablecoin
regulator determines appropriate, provided that
such tailoring or differentiation occurs
without respect to whether a permitted payment
stablecoin issuer is regulated by a State
payment stablecoin regulator; or
(ii) any supervisory, regulatory, or
enforcement authority of a primary Federal
payment stablecoin regulator to further the
safe and sound operation of an institution for
which the primary Federal payment stablecoin
regulator is the appropriate regulator.
(C) Applicability of existing capital standards.--
(i) Definition.--In this subparagraph, the
term ``depository institution holding company''
has the meaning given that term under section
171(a)(3) of the Financial Stability Act of
2010 (12 U.S.C. 5371(a)(3)).
(ii) Applicability of financial stability
act.--With respect to the promulgation of rules
under subparagraph (A) and clauses (iii) and
(iv) of this subparagraph, section 171 of the
Financial Stability Act of 2010 (12 U.S.C.
5371) shall not apply.
(iii) Rules relating to leverage capital
requirements or risk-based capital
requirements.--Any rule issued by an
appropriate Federal banking agency that
imposes, on a consolidated basis, a leverage
capital requirement or risk-based capital
requirement with respect to an insured
depository institution or depository
institution holding company shall provide that,
for purposes of such leverage capital
requirement or risk-based capital requirement,
any insured depository institution or
depository institution holding company that
includes, on a consolidated basis, a permitted
payment stablecoin issuer, shall not be
required to hold, with respect to such
permitted payment stablecoin issuer and its
assets and operations, any amount of regulatory
capital in excess of the capital that such
permitted payment stablecoin issuer must
maintain under the capital requirements issued
pursuant to subparagraph (A)(i).
(iv) Modifications.--Not later than the
earlier of the rulemaking deadline under
section 13 or the date on which the Federal
payment stablecoin regulators issue regulations
to carry out this section, each appropriate
Federal banking agency shall amend or otherwise
modify any regulation of the appropriate
Federal banking agency described in clause
(iii) so that such regulation, as amended or
otherwise modified, complies with clause (iii)
of this subparagraph.
(5) Treatment under the bank secrecy act and sanctions
laws.--
(A) In general.--A permitted payment stablecoin
issuer shall be treated as a financial institution for
purposes of the Bank Secrecy Act, and as such, shall be
subject to all Federal laws applicable to a financial
institution located in the United States relating to
economic sanctions, prevention of money laundering,
customer identification, and due diligence, including,
as applicable--
(i) maintenance of an effective anti-money
laundering and economic sanctions compliance
program, which shall include appropriate risk
assessments, verification of sanctions lists,
and designation of an officer to supervise the
programs;
(ii) retention of appropriate records;
(iii) monitoring and reporting of any
suspicious transaction relevant to a possible
violation of law or regulation;
(iv) policies and procedures to block,
freeze, and reject specific or impermissible
transactions that violate Federal or State
laws, rules, or regulations; and
(v) maintenance of an effective customer
identification program, including
identification and verification of account
holders with the permitted payment stablecoin
issuer, high-value transactions, and
appropriate enhanced due diligence.
(B) Rulemaking.--The Financial Crimes Enforcement
Network shall adopt rules, tailored to the size and
complexity of permitted payment stablecoin issuers, to
implement subparagraph (A).
(C) Reservation of authority.--Nothing in this Act
shall restrict the authority of the Secretary of the
Treasury to implement, administer, and enforce the
provisions of subchapter II of chapter 53 of title 31,
United States Code.
(6) Coordination with permitted payment stablecoin issuers
with respect to blocking of property and technological
capabilities to comply with lawful orders.--
(A) In general.--The Secretary of the Treasury--
(i) shall, to the best of the Secretary's
ability, coordinate with a permitted payment
stablecoin issuer before taking any action to
block and prohibit transactions in property and
interests in property of a foreign person to
ensure that the permitted payment stablecoin
issuer is able to effectively block a payment
stablecoin of the foreign person upon issuance
of the payment stablecoin; and
(ii) is not required to notify any
permitted payment stablecoin issuer of any
intended action described in clause (i) prior
to taking such action.
(B) Compliance with lawful orders.--A permitted
payment stablecoin issuer may issue payment stablecoins
only if the issuer has the technological capability to
comply, and will comply, with the terms of any lawful
order.
(C) Report required.--Not later than 1 year after
the date of enactment of this Act, the Attorney General
and the Secretary of the Treasury shall submit to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the
House of Representatives a report, which may include a
classified annex if applicable, on the coordination
with permitted payment stablecoin issuers required
under subparagraph (A).
(D) Rule of construction.--Nothing in this
paragraph shall be construed to alter or affect the
authority of State payment stablecoin regulators with
respect to the offer of foreign-issued digital assets
that are issued within a foreign jurisdiction.
(7) Limitation on payment stablecoin activities.--
(A) In general.--A permitted payment stablecoin
issuer may only--
(i) issue payment stablecoins;
(ii) redeem payment stablecoins;
(iii) manage related reserves, including
purchasing, selling, and holding reserve assets
or providing custodial services for reserve
assets, consistent with State and Federal law;
(iv) provide custodial or safekeeping
services for payment stablecoins, required
reserves, or private keys of payment
stablecoins, consistent with this Act; and
(v) undertake other activities that
directly support any of the activities
described in clauses (i) through (iv).
(B) Rule of construction.--Nothing in subparagraph
(A) shall limit a permitted payment stablecoin issuer
from engaging in non-payment stablecoin activities that
are authorized by the primary Federal payment
stablecoin regulator or the State payment stablecoin
regulator, as applicable, consistent with all other
Federal and State laws, provided that the claims of
payment stablecoin holders rank senior to any potential
claims of non-stablecoin creditors with respect to the
reserve assets, consistent with section 11 and the
amendments made by that section.
(8) Prohibition on tying.--
(A) In general.--A permitted payment stablecoin
issuer may not provide services to a customer on the
condition that the customer obtain an additional paid
product or service from the permitted payment
stablecoin issuer, or any of its subsidiaries, or agree
to not obtain an additional product or service from a
competitor.
(B) Regulations.--The Board may issue such
regulations as are necessary to carry out this
paragraph, and, in consultation with other relevant
primary Federal payment stablecoin regulators, may by
regulation or order, permit such exceptions to
subparagraph (A) as the Board considers will not be
contrary to the purpose of this Act.
(9) Prohibition on the use of deceptive names.--A permitted
payment stablecoin issuer may not--
(A) use any combination of terms relating to the
United States Government, including ``United States''
and ``United States Government'', in the name of a
payment stablecoin; or
(B) market a payment stablecoin in such a way that
a reasonable person would perceive the payment
stablecoin to be--
(i) legal tender, as described in section
5103 of title 31, United States Code;
(ii) issued by the United States; or
(iii) guaranteed or approved by the
Government of the United States.
(10) Audits and reports.--
(A) Annual financial statement.--
(i) In general.--A permitted payment
stablecoin issuer with more than
$50,000,000,000 in consolidated total
outstanding issuance, that is not subject to
the reporting requirements under section 13(a)
or 15(d) of the Securities and Exchange Act of
1934 (15 U.S.C. 78m, 78o(d)), shall prepare, in
accordance with generally accepted accounting
principles, an annual financial statement,
which shall include the disclosure of any
related party transactions, as defined by such
generally accepted accounting principles.
(ii) Auditor.--A registered public
accounting firm shall perform an audit of the
annual financial statements described in clause
(i).
(iii) Standards.--An audit described in
clause (ii) shall be conducted in accordance
with all applicable auditing standards
established by the Public Company Accounting
Oversight Board, including those relating to
auditor independence, internal controls, and
related party transactions.
(iv) Rule of construction.--Nothing in this
subparagraph shall be construed to limit,
alter, or expand the jurisdiction of the Public
Company Accounting Oversight Board over
permitted payment stablecoin issuers or
registered public accounting firms.
(B) Public disclosure and submission to federal
regulators.--Each permitted payment stablecoin issuer
required to prepare an audited annual financial
statement under subparagraph (A) shall--
(i) make such audited financial statements
publicly available on the website of the
permitted payment stablecoin issuer; and
(ii) submit such audited financial
statements annually to their primary Federal
payment stablecoin regulator.
(C) Consultation.--The primary Federal payment
stablecoin regulators may consult with the Public
Company Accounting Oversight Board to determine best
practices for determining audit oversight and to detect
fraud, material misstatements, and other financial
misrepresentations that could mislead permitted payment
stablecoin holders.
(11) Eligibility.--The requirement to maintain reserves
under paragraph (1)(A) may not be construed as expanding or
contracting eligibility to qualify as a depository institution
under section 19(b)(1)(A) of the Federal Reserve Act (12 U.S.C.
461(b)(1)(A)).
(12) Rule of construction.--Compliance with this section
does not alter or affect any additional requirement of a State
payment stablecoin regulator that may apply relating to the
offering of payment stablecoins.
(b) Regulation by the Comptroller.--
(1) In general.--Notwithstanding section 5136C of the
Revised Statutes (12 U.S.C. 25b), section 6 of the Home Owners'
Loan Act (12 U.S.C. 1465), or any applicable State law relating
to licensing and supervision, a Federal qualified payment
stablecoin issuer approved by the Comptroller pursuant to
section 5 of this Act shall be licensed, regulated, examined,
and supervised exclusively by the Comptroller, which shall have
authority, in coordination with other relevant primary Federal
payment stablecoin regulators and State payment stablecoin
regulators, to issue such regulations and orders as necessary
to ensure financial stability and implement subsection (a).
(2) Conforming amendment.--Section 324(b) of the Revised
Statutes (12 U.S.C. 1(b)) is amended by adding at the end the
following:
``(3) Regulation of federal qualified payment stablecoin
issuers.--The Comptroller of the Currency shall, in
coordination with other relevant regulators and consistent with
section 13 of the GENIUS Act, issue such regulations and orders
as necessary to ensure financial stability and implement
section 4(a) of that Act.''.
(c) State-level Regulatory Regimes.--
(1) Option for state-level regulatory regime.--
Notwithstanding the Federal regulatory framework established
under this Act, a State qualified payment stablecoin issuer
with a consolidated total outstanding issuance of not more than
$10,000,000,000 may opt for regulation under a State-level
regulatory regime, provided that the State-level regulatory
regime is substantially similar to the Federal regulatory
framework under that subsection.
(2) Principles.--The Secretary of the Treasury shall,
through notice and comment rulemaking, establish broad-based
principles for determining whether a State-level regulatory
regime is substantially similar to the Federal regulatory
framework under this Act.
(3) Review.--State payment stablecoin regulators shall
review State-level regulatory regimes according to the
principles established by the Secretary of the Treasury under
paragraph (2) and for the purposes of establishing any
necessary cooperative agreements to implement section 7(f).
(4) Certification.--
(A) Initial certification.--Subject to subparagraph
(B), not later than 1 year after the effective date of
this Act, a State payment stablecoin regulator shall
submit to the Stablecoin Certification Review Committee
an initial certification that the State-level
regulatory regime meets the criteria for substantial
similarity established pursuant to paragraph (2).
(B) Form of certification.--The initial
certification required under subparagraph (A) shall
contain, in a form prescribed by the Stablecoin
Certification Review Committee, an attestation that the
State-level regulatory regime meets the criteria for
substantial similarity established pursuant to
paragraph (2).
(C) Annual recertification.--Not later than a date
to be determined by the Secretary of the Treasury each
year, a State payment stablecoin regulator shall submit
to the Stablecoin Certification Review Committee an
additional certification that confirms the accuracy of
the initial certification submitted under subparagraph
(A).
(5) Certification review.--
(A) In general.--Not later than 30 days after the
date on which a State payment stablecoin regulator
submits an initial certification or a recertification
under paragraph (4), the Stablecoin Certification
Review Committee shall--
(i) approve such certification if the
Committee unanimously determines that the
State-level regulatory regime meets or exceeds
the standards and requirements described in
subsection (a); or
(ii) deny such certification and provide
the State payment stablecoin regulator with a
written explanation of the denial, describing
the reasoned basis for the denial with
sufficient detail to enable the State payment
stablecoin regulator and State-level regulatory
regime to make any changes necessary to meet or
exceed the standards and requirements described
in subsection (a).
(B) Recertifications.--With respect to
recertification certification submitted by a State
payment stablecoin regulator under paragraph (4), the
Stablecoin Certification Review Committee shall only
deny the recertification if--
(i) the State-level regulatory regime has
materially changed from the prior certification
or there has been a significant change in
circumstances; and
(ii) the material change in the regime or
significant change in circumstances described
in clause (i) is such that the State-level
regulatory regime will not promote the safe and
sound operation of State qualified payment
stablecoin issuers under its supervision.
(C) Opportunity to cure.--
(i) In general.--With respect to a denial
described under subparagraph (A) or (B), the
Stablecoin Certification Review Committee shall
provide the State payment stablecoin regulator
with not less than 180 days from the date on
which the State payment stablecoin regulator is
notified of such denial to--
(I) make such changes as may be
necessary to ensure the State-level
regulatory regime meets or exceeds the
standards described in subsection (a);
and
(II) resubmit the initial
certification or recertification.
(ii) Denial.--If, after a State payment
stablecoin regulator resubmits an initial
certification or recertification under clause
(i), the Stablecoin Certification Review
Committee again determines that the initial
certification or recertification shall result
in a denial, the Stablecoin Certification
Review Committee shall, not later than 30 days
after such determination, provide the State
payment stablecoin regulator with a written
explanation for the determination.
(D) Appeal of denial.--A State payment stablecoin
regulator in receipt of a denial under subparagraph
(C)(ii) may appeal the denial to the United States
Court of Appeals for the District of Columbia Circuit.
(E) Right to resubmit.--A State payment stablecoin
regulator in receipt of a denial under this paragraph
shall not be prohibited from resubmitting a new
certification under paragraph (4).
(6) List.--The Secretary of the Treasury shall publish and
maintain in the Federal Register and on the website of the
Department of the Treasury a list of States that have submitted
initial certifications and recertifications under paragraph
(4).
(7) Stablecoin certification review committee
establishment.--For purposes of this subsection, the Stablecoin
Certification Review Committee shall consist of the Secretary
of the Treasury, the Chair of the Board, and the Chair of the
Corporation.
(d) Transition to Federal Oversight.--
(1) Depository institution.--A State chartered depository
institution that is a State qualified payment stablecoin issuer
with a payment stablecoin with a consolidated total outstanding
issuance of more than $10,000,000,000 shall--
(A) not later than 360 days after the payment
stablecoin reaches such threshold, transition to the
Federal regulatory framework of the primary Federal
payment stablecoin regulator of the State chartered
depository institution, which shall be administered by
the State payment stablecoin regulator of the State
chartered depository institution and the primary
Federal payment stablecoin regulator acting jointly; or
(B) beginning on the date the payment stablecoin
reaches such threshold, cease issuing new payment
stablecoins until the payment stablecoin is under the
$10,000,000,000 consolidated total outstanding issuance
threshold.
(2) Other institutions.--A State qualified payment
stablecoin issuer not described in paragraph (1) with a payment
stablecoin with a consolidated total outstanding issuance of
more than $10,000,000,000 shall--
(A) not later than 360 days after the payment
stablecoin reaches such threshold, transition to the
Federal regulatory framework under subsection (a)
administered by the relevant State payment stablecoin
regulator and the Comptroller, acting in coordination;
or
(B) beginning on the date the payment stablecoin
reaches such threshold, cease issuing new payment
stablecoins until the payment stablecoin is under the
$10,000,000,000 consolidated total outstanding issuance
threshold.
(3) Waiver.--
(A) In general.--Notwithstanding paragraphs (1) and
(2), the applicable primary Federal payment stablecoin
regulator may permit a State qualified payment
stablecoin issuer with a payment stablecoin with a
consolidated total outstanding issuance of more than
$10,000,000,000 to remain solely supervised by a State
payment stablecoin regulator.
(B) Criteria for waiver.--The primary Federal
payment stablecoin regulator shall consider the
following exclusive criteria in determining whether to
issue a waiver under this paragraph:
(i) The capital maintained by the State
qualified payment stablecoin issuer.
(ii) The past operations and examination
history of the State qualified payment
stablecoin issuer.
(iii) The experience of the State payment
stablecoin regulator in supervising payment
stablecoin and digital asset activities.
(iv) The supervisory framework, including
regulations and guidance, of the State
qualified payment stablecoin issuer with
respect to payment stablecoins and digital
assets.
(C) Rule of construction.--
(i) Federal oversight.--A State qualified
payment stablecoin issuer subject to Federal
oversight under paragraph (1) or (2) of this
subsection that does not receive a waiver under
this paragraph shall continue to be supervised
by the State payment stablecoin regulator of
the State qualified payment stablecoin issuer
jointly with the primary Federal payment
stablecoin regulator. Nothing in this
subsection shall require the State qualified
payment stablecoin issuer to convert to a
Federal charter.
(ii) State oversight.--A State qualified
payment stablecoin issuer supervised by a State
payment stablecoin regulator that has
established a prudential regulatory regime
(including regulations and guidance) for the
supervision of digital assets or payment
stablecoins before the 90-day period ending on
the date of enactment of this Act that has been
certified pursuant to subsection (c) and has
approved 1 or more issuers to issue a payment
stablecoin under the supervision of such State
payment stablecoin regulator, shall be
presumptively approved for a waiver under this
paragraph, unless the Federal payment
stablecoin regulator finds, by clear and
convincing evidence, that the requirements of
subparagraph (B) are not substantially met with
respect to that issuer or that the issuer poses
significant safety and soundness risks to the
financial system of the United States.
(e) Misrepresentation of Insured Status.--
(1) In general.--Payment stablecoins shall not be backed by
the full faith and credit of the United States, guaranteed by
the United States Government, subject to deposit insurance by
the Federal Deposit Insurance Corporation, or subject to share
insurance by the National Credit Union Administration.
(2) Misrepresentation of insured status.--
(A) In general.--It shall be unlawful to represent
that payment stablecoins are backed by the full faith
and credit of the United States, guaranteed by the
United States Government, or subject to Federal deposit
insurance or Federal share insurance, provided that
this subparagraph shall not prohibit a permitted
payment stablecoin issuer from disclosing which assets
in its reserves are backed by the full faith and credit
of the United States or what percentage of its total
reserves are backed by the full faith and credit of the
United States.
(B) Penalty.--A violation of subparagraph (A) shall
be considered a violation of section 18(a)(4) of the
Federal Deposit Insurance Act (12 U.S.C. 1828(a)(4)) or
section 709 of title 18, United States Code, as
applicable.
(3) Marketing.--
(A) In general.--It shall be unlawful to market a
product in the United States as a payment stablecoin
unless the product is issued pursuant to this Act.
(B) Penalty.--Whoever knowingly and willfully
participates in a violation of subparagraph (A) shall
be fined by the Department of the Treasury not more
than $500,000 for each such violation.
(C) Determination of the number of violations.--For
purposes of determining the number of violations for
which to impose penalties under subparagraph (B),
separate acts of noncompliance are a single violation
when the acts are the result of--
(i) a common or substantially overlapping
originating cause; or
(ii) the same statement or publication.
(D) Referral to secretary of the treasury.--If a
Federal payment stablecoin regulator has reason to
believe that any person has knowingly and willfully
violated subparagraph (A), the Federal payment
stablecoin regulator may refer the matter to the
Secretary of the Treasury.
(f) Officers or Directors Convicted of Certain Felonies.--
(1) In general.--No individual who has been convicted of a
felony offense involving insider trading, embezzlement,
cybercrime, money laundering, financing of terrorism, or
financial fraud may serve as--
(A) an officer of a payment stablecoin issuer; or
(B) a director of a payment stablecoin issuer.
(2) Penalty.--
(A) In general.--Whoever knowingly participates in
a violation of paragraph (1) shall be fined not more
than $1,000,000 for each such violation, imprisoned for
not more than 5 years, or both.
(B) Referral to attorney general.--If a Federal
payment stablecoin regulator has reason to believe that
any person has knowingly violated paragraph (1), the
Federal payment stablecoin regulator shall refer the
matter to the Attorney General.
(g) Clarification Relating to Federal Savings Association
Reserves.--A Federal savings association established under the Home
Owners' Loan Act (12 U.S.C. 1461 et seq.) that holds a reserve that
satisfies the requirements of section 4(a)(1) shall not be required to
satisfy the qualified thrift lender test under section 10(m) of the
Home Owners' Loan Act (12 U.S.C. 1467a(m)) with respect to such reserve
assets.
(h) Rulemaking.--
(1) In general.--Consistent with section 13, the primary
Federal payment stablecoin regulators shall, and State payment
stablecoin regulators may, issue such regulations relating to
permitted payment stablecoin issuers as may be necessary to
establish a payment stablecoin regulatory framework necessary
to administer and carry out the requirements of this section,
including to establish conditions, and to prevent evasion
thereof.
(2) Coordinated issuance of regulations.--All regulations
issued to carry out this section shall be issued in
coordination by the primary Federal payment stablecoin
regulators, if not issued by a State payment stablecoin
regulator.
(i) Rules of Construction.--Nothing in this Act shall be
construed--
(1) as expanding the authority of the Board with respect to
the services the Board can make directly available to the
public; or
(2) to limit or prevent the continued application of
applicable ethics statutes and regulations administered by the
Office of Government Ethics, or the ethics rules of the House
of Representatives and the Senate, including section 208 of
title 18, United States Code, and sections 2635.702 and
2635.802 of title 5, Code of Federal Regulations. For the
avoidance of doubt, existing Office of Government Ethics laws
and the ethics rules of the House of Representatives and the
Senate prohibit any member of Congress or senior executive
branch official from issuing a payment stablecoin product
during their time in public service.
SEC. 5. APPROVAL OF SUBSIDIARIES OF INSURED DEPOSITORY INSTITUTIONS AND
FEDERAL QUALIFIED PAYMENT STABLECOIN ISSUERS.
(a) Application.--
(1) In general.--Each primary Federal payment stablecoin
regulator shall--
(A) receive, review, and consider for approval
applications from any insured depository institution
that seeks to issue payment stablecoins through a
subsidiary and any nonbank entity, Federal branch, or
uninsured national bank that is chartered by the
Comptroller pursuant to title LXII of the Revised
Statutes, and that seeks to issue payment stablecoins
as a Federal qualified payment stablecoin issuer; and
(B) establish a process and framework for the
licensing, regulation, examination, and supervision of
such entities that prioritizes the safety and soundness
of such entities.
(2) Authority to issue regulations and process
applications.--The primary Federal payment stablecoin
regulators shall, before the date described in section 13--
(A) issue regulations consistent with that section
to carry out this section; and
(B) pursuant to the regulations described in
subparagraph (A), accept and process applications
described in paragraph (1).
(3) Mandatory approval process.--A primary Federal payment
stablecoin regulator shall, upon receipt of a substantially
complete application received under paragraph (1), evaluate and
make a determination on each application based on the criteria
established under this Act.
(b) Evaluation of Applications.--A substantially complete
application received under subsection (a) shall be evaluated by the
primary Federal payment stablecoin regulator using the factors
described in subsection (c).
(c) Factors to Be Considered.--The factors described in this
subsection are the following:
(1) The ability of the applicant (or, in the case of an
applicant that is an insured depository institution, the
subsidiary of the applicant), based on financial condition and
resources, to meet the requirements set forth under section 4.
(2) Whether an individual who has been convicted of a
felony offense involving insider trading, embezzlement,
cybercrime, money laundering, financing of terrorism, or
financial fraud is serving as an officer or director of the
applicant.
(3) The competence, experience, and integrity of the
officers, directors, and principal shareholders of the
applicant, its subsidiaries, and parent company, including--
(A) the record of those officers, directors, and
principal shareholders of compliance with laws and
regulations; and
(B) the ability of those officers, directors, and
principal shareholders to fulfill any commitments to,
and any conditions imposed by, their primary Federal
payment stablecoin regulator in connection with the
application at issue and any prior applications.
(4) Whether the redemption policy of the applicant meets
the standards under section 4(a)(1)(B).
(5) Any other factors established by the primary Federal
payment stablecoin regulator that are necessary to ensure the
safety and soundness of the permitted payment stablecoin
issuer.
(d) Timing for Decision; Grounds for Denial.--
(1) Timing for decisions on applications.--
(A) In general.--Not later than 120 days after
receiving a substantially complete application under
subsection (a), a primary Federal payment stablecoin
regulator shall render a decision on the application.
(B) Substantially complete.--
(i) In general.--For purposes of
subparagraph (A), an application shall be
considered substantially complete if the
application contains sufficient information for
the primary Federal payment stablecoin
regulator to render a decision on whether the
applicant satisfies the factors described in
subsection (c).
(ii) Notification.--Not later than 30 days
after receiving an application under subsection
(a), a primary Federal payment stablecoin
regulator shall notify the applicant as to
whether the primary Federal payment stablecoin
regulator considers the application to be
substantially complete and, if the application
is not substantially complete, the additional
information the applicant shall provide in
order for the application to be considered
substantially complete.
(iii) Material change in circumstances.--An
application considered substantially complete
under this subparagraph remains substantially
complete unless there is a material change in
circumstances that requires the primary Federal
payment stablecoin regulator to treat the
application as a new application.
(2) Denial of application.--
(A) Grounds for denial.--
(i) In general.--A primary Federal payment
stablecoin regulator shall only deny a
substantially complete application received
under subsection (a) if the regulator
determines that the activities of the applicant
would be unsafe or unsound based on the factors
described in subsection (c).
(ii) Issuance on open, public, or
decentralized network not ground for denial.--
The issuance of a payment stablecoin on an
open, public, or decentralized network shall
not be a valid ground for denial of an
application received under subsection (a).
(B) Explanation required.--If a primary Federal
payment stablecoin regulator denies a complete
application received under subsection (a), not later
than 30 days after the date of such denial, the
regulator shall provide the applicant with written
notice explaining the denial with specificity,
including all findings made by the regulator with
respect to all identified material shortcomings in the
application, including actionable recommendations on
how the applicant could address the identified material
shortcomings.
(C) Opportunity for hearing; final determination.--
(i) In general.--Not later than 30 days
after the date of receipt of any notice of the
denial of an application under this section,
the applicant may request, in writing, an
opportunity for a written or oral hearing
before the primary Federal payment stablecoin
regulator to appeal the denial.
(ii) Timing.--Upon receipt of a timely
request under clause (i), the primary Federal
payment stablecoin regulator shall notice a
time (not later than 30 days after the date of
receipt of the request) and place at which the
applicant may appear, personally or through
counsel, to submit written materials or provide
oral testimony and oral argument.
(iii) Final determination.--Not later than
60 days after the date of a hearing under this
subparagraph, the applicable primary Federal
payment stablecoin regulator shall notify the
applicant of a final determination, which shall
contain a statement of the basis for that
determination, with specific findings.
(iv) Notice if no hearing.--If an applicant
does not make a timely request for a hearing
under this subparagraph, the primary Federal
payment stablecoin regulator shall notify the
applicant, not later than 10 days after the
date by which the applicant may request a
hearing under this subparagraph, in writing,
that the denial of the application is a final
determination of the primary Federal payment
stablecoin regulator.
(3) Failure to render a decision.--If a primary Federal
payment stablecoin regulator fails to render a decision on a
complete application within the time period specified in
paragraph (1), the application shall be deemed approved.
(4) Right to reapply.--The denial of an application under
this section shall not prohibit the applicant from filing a
subsequent application.
(e) Reports on Pending Applications.--Each primary Federal payment
stablecoin regulator shall--
(1) notify Congress upon beginning to process applications
under this Act; and
(2) annually report to Congress on the applications that
have been pending for 180 days or more since the date the
initial application was filed and for which the applicant has
been informed that the application remains incomplete,
including documentation on the status of such applications and
why such applications have not yet been approved.
(f) Safe Harbor for Pending Applications.--The primary Federal
payment stablecoin regulators may waive the application of the
requirements of this Act for a period not to exceed 12 months beginning
on the effective date of this Act, with respect to--
(1) a subsidiary of an insured depository institution, if
the insured depository institution has an application pending
for the subsidiary to become a permitted payment stablecoin
issuer on that effective date; or
(2) a Federal qualified payment stablecoin issuer with a
pending application on that effective date.
(g) Rulemaking.--Consistent with section 13, the primary Federal
payment stablecoin regulators shall issue rules necessary for the
regulation of the issuance of payment stablecoins, but may not impose
requirements in addition to the requirements specified under section 4.
(h) Relation to Other Licensing Requirements.--The provisions of
this section supersede and preempt any State requirement for a charter,
license, or other authorization to do business with respect to a
Federal qualified payment stablecoin issuer or subsidiary of an insured
depository institution or credit union that is approved under this
section to be a permitted payment stablecoin issuer.
(i) Certification Required.--
(1) In general.--Not later than 180 days after the approval
of an application, and on an annual basis thereafter, each
permitted payment stablecoin issuer shall submit to its primary
Federal payment stablecoin regulator, or in the case of a State
qualified payment stablecoin issuer its State payment
stablecoin regulator, a certification that the issuer has
implemented anti-money laundering and economic sanctions
compliance programs that are reasonably designed to prevent the
permitted payment stablecoin issuer from facilitating money
laundering, including, in particular, facilitating money
laundering for cartels and organizations designated as foreign
terrorist organizations under section 219 of the Immigration
and Nationality Act (8 U.S.C. 1189) and the financing of
terrorist activities, consistent with the requirements of this
Act.
(2) Availability of certifications.--Federal payment
stablecoin regulators and State payment stablecoin regulators
shall make certifications described in paragraph (1) available
to the Secretary of Treasury upon request.
(3) Penalties.--
(A) Approval revocation.--The primary Federal
payment stablecoin regulator or State payment
stablecoin regulator of a permitted payment stablecoin
issuer that does not submit a certification pursuant to
paragraph (1) may revoke the approval of the payment
stablecoin issuer under this section.
(B) Criminal penalty.--
(i) In general.--Any person that knowingly
submits a certification pursuant to paragraph
(1) that is false shall be subject to the
criminal penalties set forth under section 1001
of title 18, United States Code.
(ii) Referral to attorney general.--If a
Federal payment stablecoin regulator or State
payment stablecoin regulator has reason to
believe that any person has knowingly violated
paragraph (1), the applicable regulator may
refer the matter to the Attorney General or to
the attorney general of the payment stablecoin
issuer's host State.
SEC. 6. SUPERVISION AND ENFORCEMENT WITH RESPECT TO FEDERAL QUALIFIED
PAYMENT STABLECOIN ISSUERS AND SUBSIDIARIES OF INSURED
DEPOSITORY INSTITUTIONS.
(a) Supervision.--
(1) In general.--Each permitted payment stablecoin issuer
that is not a State qualified payment stablecoin issuer with a
payment stablecoin with a consolidated total outstanding
issuance of less than $10,000,000,000 shall be subject to
supervision by the appropriate primary Federal payment
stablecoin regulator.
(2) Submission of reports.--Each permitted payment
stablecoin issuer described in paragraph (1) shall, upon
request, submit to the appropriate primary Federal payment
stablecoin regulator a report on--
(A) the financial condition of the permitted
payment stablecoin issuer;
(B) the systems of the permitted payment stablecoin
issuer for monitoring and controlling financial and
operating risks;
(C) compliance by the permitted payment stablecoin
issuer (and any subsidiary thereof) with this Act; and
(D) the compliance of the Federal qualified nonbank
payment stablecoin issuer with the requirements of the
Bank Secrecy Act and with laws authorizing the
imposition of sanctions to be implemented by the
Secretary of the Treasury.
(3) Examinations.--The appropriate primary Federal payment
stablecoin regulator shall examine a permitted payment
stablecoin issuer described in paragraph (1) in order to
assess--
(A) the nature of the operations and financial
condition of the permitted payment stablecoin issuer;
(B) the financial, operational, technological, and
other risks associated with the permitted payment
stablecoin issuer that may pose a threat to--
(i) the safety and soundness of the
permitted payment stablecoin issuer; or
(ii) the stability of the financial system
of the United States; and
(C) the systems of the permitted payment stablecoin
issuer for monitoring and controlling the risks
described in subparagraph (B).
(4) Requirements for efficiency.--
(A) Use of existing reports.--In supervising and
examining a permitted payment stablecoin issuer under
this subsection, a primary Federal payment stablecoin
regulator shall, to the fullest extent possible, use
existing reports and other supervisory information.
(B) Avoidance of duplication.--A primary Federal
payment stablecoin regulator shall, to the fullest
extent possible, avoid duplication of examination
activities, reporting requirements, and requests for
information in carrying out this subsection with
respect to a permitted payment stablecoin issuer.
(C) Consideration of burden.--A primary Federal
payment stablecoin regulator shall, with respect to any
examination or request for the submission of a report
under this subsection, only request examinations and
reports at a cadence and in a format that is similar to
that required for similarly situated entities regulated
by the primary Federal payment stablecoin regulator.
(b) Enforcement.--
(1) Suspension or revocation of registration.--The primary
Federal payment stablecoin regulator of a permitted payment
stablecoin issuer that is not a State qualified payment
stablecoin issuer with a payment stablecoin with a consolidated
total outstanding issuance of less than $10,000,000,000 may
prohibit the permitted payment stablecoin issuer from issuing
payment stablecoins, if the primary Federal payment stablecoin
regulator determines that such permitted payment stablecoin
issuer, or an institution-affiliated party of the permitted
payment stablecoin issuer is willfully violating or has
willfully violated--
(A) this Act or any regulation or order issued
under this Act; or
(B) any condition imposed in writing by the primary
Federal payment stablecoin regulator in connection with
a written agreement entered into between the permitted
payment stablecoin issuer and the primary Federal
payment stablecoin regulator.
(2) Cease-and-desist proceedings.--If the primary Federal
payment stablecoin regulator of a permitted payment stablecoin
issuer that is not a State qualified payment stablecoin issuer
with a payment stablecoin with a consolidated total outstanding
issuance of less than $10,000,000,000 has reasonable cause to
believe that the permitted payment stablecoin issuer or any
institution-affiliated party of the permitted payment
stablecoin issuer is violating, has violated, or is attempting
to violate this Act, any regulation or order issued under this
Act, or any written agreement entered into with the primary
Federal payment stablecoin regulator or condition imposed in
writing by the primary Federal payment stablecoin regulator in
connection with any application or other request, the primary
Federal payment stablecoin regulator may, by provisions that
are mandatory or otherwise, order the permitted payment
stablecoin issuer or institution-affiliated party of the
permitted payment stablecoin issuer to--
(A) cease and desist from such violation or
practice; or
(B) take affirmative action to correct the
conditions resulting from any such violation or
practice.
(3) Removal and prohibition authority.--The primary Federal
payment stablecoin regulator of a permitted payment stablecoin
issuer that is not a State qualified payment stablecoin issuer
may remove an institution-affiliated party of the permitted
payment stablecoin issuer from the position or office of that
institution-affiliated party or prohibit further participation
in the affairs of the permitted payment stablecoin issuer or of
all such permitted payment stablecoin issuers by that
institution-affiliated party, if the primary Federal payment
stablecoin regulator determines that--
(A) the institution-affiliated party has knowingly
committed a violation or attempted violation of this
Act or any regulation or order issued under this Act;
or
(B) the institution-affiliated party has knowingly
committed a violation of any provision of subchapter II
of chapter 53 of title 31, United States Code.
(4) Procedures.--
(A) In general.--If a primary Federal payment
stablecoin regulator identifies a violation or
attempted violation of this Act or makes a
determination under paragraph (1), (2), or (3), the
primary Federal payment stablecoin regulator shall
comply with the procedures set forth in subsections (b)
and (e) of section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818) or subsections (e) and (g) of
section 206 the Federal Credit Union Act (12 U.S.C.
1786(e) and (g)), as applicable.
(B) Judicial review.--A person aggrieved by a final
action under this subsection may obtain judicial review
of such action exclusively as provided in section 8(h)
of the Federal Deposit Insurance Act (12 U.S.C.
1818(h)) or section 206(j) of the Federal Credit Union
Act (12 U.S.C. 1786(j)), as applicable.
(C) Injunction.--A primary Federal payment
stablecoin regulator may, at the discretion of the
regulator, follow the procedures provided in section
8(i)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1818(i)(1)) or section 206(k)(1) of the Federal Credit
Union Act (12 U.S.C. 1786(k)(1)), as applicable, for
judicial enforcement of any effective and outstanding
notice or order issued under this subsection.
(D) Temporary cease-and-desist proceedings.--If a
primary Federal payment stablecoin regulator determines
that a violation or attempted violation of this Act or
an action with respect to which a determination was
made under paragraph (1), (2), or (3), or the
continuation thereof, is likely to cause insolvency or
significant dissipation of assets or earnings of a
permitted payment stablecoin issuer, or is likely to
weaken the condition of the permitted payment
stablecoin issuer or otherwise prejudice the interests
of the customers of the permitted payment stablecoin
issuer prior to the completion of the proceedings
conducted under this paragraph, the primary Federal
payment stablecoin regulator may follow the procedures
provided in section 8(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(c)) or section 206(f) of
the Federal Credit Union Act (12 U.S.C. 1786(f)), as
applicable, to issue a temporary cease and desist
order.
(5) Civil money penalties.--Unless otherwise specified in
this Act, the civil money penalties for violations of this Act
consist of the following:
(A) Failure to be approved.--Any person that issues
a United States dollar-denominated payment stablecoin
in violation of section 3, and any institution-
affiliated party of such a person who knowingly
participates in issuing such a payment stablecoin,
shall be liable for a civil penalty of not more than
$100,000 for each day during which such payment
stablecoins are issued.
(B) First tier.--Except as provided in subparagraph
(A), a permitted payment stablecoin issuer or
institution-affiliated party of such permitted payment
stablecoin issuer that materially violates this Act or
any regulation or order issued under this Act, or that
materially violates any condition imposed in writing by
the appropriate primary Federal payment stablecoin
regulator in connection with a written agreement
entered into between the permitted payment stablecoin
issuer and that primary Federal payment stablecoin
regulator, shall be liable for a civil penalty of not
more than $100,000 for each day during which the
violation continues.
(C) Second tier.--Except as provided in
subparagraph (A), and in addition to the penalties
described in subparagraph (B), a permitted payment
stablecoin issuer or institution-affiliated party of
such permitted payment stablecoin issuer who knowingly
participates in a violation of any provision of this
Act, or any regulation or order issued under this Act,
shall be liable for a civil penalty of not more than an
additional $100,000 for each day during which the
violation continues.
(D) Procedure.--Any penalty imposed under this
paragraph may be assessed and collected by the
appropriate primary Federal payment stablecoin
regulator pursuant to the procedures set forth in
section 8(i)(2) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(i)(2)) or section 206(k)(2) of the
Federal Credit Union Act (12 U.S.C. 1786(k)(2)), as
applicable.
(E) Notice and orders after separation from
service.--The resignation, termination of employment or
participation, or separation of an institution-
affiliated party (including a separation caused by the
closing of a permitted payment stablecoin issuer) shall
not affect the jurisdiction and authority of a primary
Federal payment stablecoin regulator to issue any
notice or order and proceed under this subsection
against any such party, if such notice or order is
served before the end of the 6-year period beginning on
the date on which such party ceased to be an
institution-affiliated party with respect to such
permitted payment stablecoin issuer.
(6) Non-applicability to a state qualified payment
stablecoin issuer.--Notwithstanding anything in this subsection
to the contrary, this subsection shall not apply to a State
qualified payment stablecoin issuer.
(c) Federal Trade Commission Jurisdiction.--Nothing in this Act
shall be construed to limit, impair, or otherwise affect the authority
or jurisdiction of the Federal Trade Commission under the Federal Trade
Commission Act (15 U.S.C. 41 et seq.) or any other applicable Federal
law.
SEC. 7. STATE QUALIFIED PAYMENT STABLECOIN ISSUERS.
(a) In General.--A State payment stablecoin regulator shall have
supervisory, examination, and enforcement authority over all State
qualified payment stablecoin issuers of such State.
(b) Authority To Enter Into Agreements With the Board.--A State
payment stablecoin regulator may enter into a memorandum of
understanding with the Board, by mutual agreement, under which the
Board may participate in the supervision, examination, and enforcement
of this Act with respect to the State qualified payment stablecoin
issuers of such State.
(c) Sharing of Information.--A State payment stablecoin regulator
and the Board shall share information on an ongoing basis with respect
to a State qualified payment stablecoin issuer of such State, including
a copy of the initial application and any accompanying documents.
(d) Rulemaking.--A State payment stablecoin regulator may issue
orders and rules under section 4 applicable to State qualified payment
stablecoin issuers to the same extent as the primary Federal payment
stablecoin regulators issue orders and rules under section 4 applicable
to permitted payment stablecoin issuers that are not State qualified
payment stablecoin issuers.
(e) Enforcement Authority in Unusual and Exigent Circumstances.--
(1) Board.--
(A) In general.--Subject to subparagraph (C), under
unusual and exigent circumstances that the Board
determines to exist, the Board may, after not less than
48 hours' prior written notice to the applicable State
payment stablecoin regulator, take an enforcement
action against a State qualified payment stablecoin
issuer or an institution-affiliated party of such
issuer for violations of this Act during such unusual
and exigent circumstances.
(B) Rulemaking.--Consistent with section 13, the
Board shall issue rules to set forth the unusual and
exigent circumstances in which the Board may act under
this paragraph.
(C) Limitations.--If, after unusual and exigent
circumstances are determined to exist pursuant to
subparagraph (A), the Board determines that there is
reasonable cause to believe that the continuation by a
State qualified payment stablecoin issuer of any
activity constitutes a serious risk to the financial
safety, soundness, or stability of the State qualified
payment stablecoin issuer, the Board may impose such
restrictions as the Board determines to be necessary to
address such risk during such unusual and exigent
circumstances, which may include limitations on
redemptions of payment stablecoins, and which shall be
issued in the form of a directive, with the effect of a
cease and desist order that has become final, to the
State qualified payment stablecoin issuer and any of
its affiliates, limiting--
(i) transactions between the State
qualified payment stablecoin issuer, a holding
company, and the subsidiaries or affiliates of
either the State qualified payment stablecoin
issuer or the holding company; and
(ii) any activities of the State qualified
payment stablecoin issuer that might create a
serious risk that the liabilities of a holding
company and the affiliates of the holding
company may be imposed on the State qualified
payment stablecoin issuer.
(D) Review of directive.--
(i) Administrative review.--
(I) In general.--After a directive
described in subparagraph (C) is
issued, the applicable State qualified
payment stablecoin issuer, or any
institution-affiliated party of the
State qualified payment stablecoin
issuer subject to the directive, may
object and present to the Board, in
writing, the reasons why the directive
should be modified or rescinded.
(II) Automatic lapse of
directive.--If, after 10 days after the
receipt of a response described in
subclause (I), the Board does not
affirm, modify, or rescind the
directive, the directive shall
automatically lapse.
(ii) Judicial review.--
(I) In general.--If the Board
affirms or modifies a directive
pursuant to clause (i), any affected
party may immediately thereafter
petition the United States district
court for the district in which the
main office of the affected party is
located, or in the United States
District Court for the District of
Columbia, to stay, modify, terminate,
or set aside the directive.
(II) Relief for extraordinary
cause.--Upon a showing of extraordinary
cause, an affected party may petition
for relief under subclause (I) without
first pursuing or exhausting the
administrative remedies under clause
(i).
(2) Comptroller.--
(A) In general.--Subject to subparagraph (C), under
unusual and exigent circumstances determined to exist
by the Comptroller, the Comptroller shall, after not
less than 48 hours' prior written notice to the
applicable State payment stablecoin regulator, take an
enforcement action against a State qualified payment
stablecoin issuer that is a nonbank entity for
violations of this Act.
(B) Rulemaking.--Consistent with section 13, the
Comptroller shall issue rules to set forth the unusual
and exigent circumstances in which the Comptroller may
act under this paragraph.
(C) Limitations.--If, after unusual and exigent
circumstances are determined to exist under
subparagraph (A), the Comptroller determines that there
is reasonable cause to believe that the continuation of
any activity by a State qualified payment stablecoin
issuer that is a nonbank entity constitutes a serious
risk to the financial safety, soundness, or stability
of the State qualified payment stablecoin issuer that
is a nonbank entity, the Comptroller shall impose such
restrictions as the Comptroller determines to be
necessary to address such risk during such unusual and
exigent circumstances, which may include limitations on
redemption of payment stablecoins, and which shall be
issued in the form of a directive, with the effect of a
cease and desist order that has become final, to the
State qualified payment stablecoin issuer that is a
nonbank entity and any of its affiliates, limiting--
(i) transactions between the State
qualified payment stablecoin issuer, a holding
company, and the subsidiaries or affiliates of
either the State qualified payment stablecoin
issuer or the holding company; and
(ii) any activities of the State qualified
payment stablecoin issuer that might create a
serious risk that the liabilities of a holding
company and the affiliates of the holding
company may be imposed on the State qualified
payment stablecoin issuer.
(D) Review of directive.--
(i) Administrative review.--
(I) In general.--After a directive
described in subparagraph (C) is
issued, the applicable Federal
qualified payment stablecoin issuer, or
any institution-affiliated party of the
Federal qualified payment stablecoin
issuer subject to the directive, may
object and present to the Comptroller,
in writing, the reasons that the
directive should be modified or
rescinded.
(II) Automatic lapse of
directive.--If, after 10 days after the
receipt of a response described in
subclause (I), the Comptroller does not
affirm, modify, or rescind the
directive, the directive shall
automatically lapse.
(ii) Judicial review.--
(I) In general.--If the Comptroller
affirms or modifies a directive
pursuant to clause (i), any affected
party may immediately thereafter
petition the United States district
court for the district in which the
main office of the affected party is
located, or in the United States
District Court for the District of
Columbia, to stay, modify, terminate,
or set aside the directive.
(II) Relief for extraordinary
cause.--Upon a showing of extraordinary
cause, an affected party may petition
for relief under subclause (I) without
first pursuing or exhausting the
administrative remedies under clause
(i).
(f) Effect on State Law.--
(1) Host state law.--Unless otherwise provided in this Act,
the laws of a host State, including laws relating to consumer
protection, shall only apply to the activities conducted in the
host State by an out-of-State State qualified payment
stablecoin issuer to the same extent as such laws apply to the
activities conducted in the host State by an out-of-State
Federal qualified payment stablecoin issuer.
(2) Home state law.--If any host State law is determined
not to apply under paragraph (1), the laws of the home State of
the State qualified payment stablecoin issuer shall govern the
activities of the permitted payment stablecoin issuer conducted
in the host State.
(3) Applicability.--
(A) In general.--This subsection shall only apply
to an out-of-State State qualified payment stablecoin
issuer chartered, licensed, or otherwise authorized to
do business by a State that has a certification in
place pursuant to section 4(c) of this Act.
(B) Exclusion.--The laws applicable to an out-of-
State qualified payment stablecoin issuer under
paragraph (1) exclude host State laws governing the
chartering, licensure, or other authorization to do
business in the host State as a permitted payment
stablecoin issuer pursuant to this Act.
(4) Rule of construction.--Except as specified in this
subsection, nothing in this Act shall preempt State consumer
protection laws, including common law, and the remedies
available thereunder.
SEC. 8. ANTI-MONEY LAUNDERING PROTECTIONS.
(a) Payment Stablecoin Issued by a Foreign Payment Stablecoin
Issuer.--
(1) In general.--Payment stablecoin that is issued by a
foreign payment stablecoin issuer may not be publicly offered,
sold, or otherwise made available for trading in the United
States unless the foreign payment stablecoin issuer has the
technological capability to comply and complies with the terms
of any lawful order.
(2) Enforcement.--
(A) Authority.--The Secretary of the Treasury shall
have the authority to designate any foreign issuer that
publicly offers, sells, or otherwise makes available a
payment stablecoin in violation of paragraph (1) as
noncompliant.
(B) Designation as noncompliant.--Not later than 30
days after the Department of the Treasury has
identified a foreign payment stablecoin issuer of any
payment stablecoin that is trading in the United States
that is in violation of paragraph (1), the Secretary of
the Treasury, in coordination with relevant Federal
agencies, may, pursuant to the authority under
subparagraph (A), designate the foreign payment
stablecoin issuer as noncompliant and notify the
foreign payment stablecoin issuer in writing of the
designation.
(3) Appeal.--A determination of noncompliance under this
subsection is subject to judicial review in the United States
Court of Appeals for the District of Columbia Circuit.
(b) Publication of Designation; Prohibition on Secondary Trading.--
(1) In general.--If a foreign payment stablecoin issuer
does not come into compliance with the lawful order within 30
days from the date of issuance of the written notice described
in subsection (a), the Secretary of the Treasury may--
(A) publish the determination of noncompliance in
the Federal Register, including a statement on the
failure of the foreign payment stablecoin issuer to
comply with the lawful order after the written notice;
and
(B) issue a notification in the Federal Register
prohibiting digital asset service providers from
facilitating secondary trading of payment stablecoins
issued by the foreign payment stablecoin issuer in the
United States.
(2) Effective date of prohibition.--The prohibition on
facilitation of secondary trading described in paragraph (1)
shall become effective on the date that is 30 days after the
date of issue of notification of the prohibition in the Federal
Register.
(3) Expiration of prohibition.--
(A) In general.--The prohibition on facilitation of
secondary trading described in paragraph (1)(B) shall
expire upon the Secretary of the Treasury's
determination that the foreign payment stablecoin
issuer is no longer noncompliant.
(B) Rulemaking.--Consistent with section 13, the
Secretary of the Treasury shall specify the criteria
that a noncompliant foreign issuer must meet for the
Secretary of the Treasury to determine that the foreign
payment stablecoin issuer is no longer noncompliant.
(4) Civil monetary penalties.--The Secretary of the
Treasury may impose a civil monetary penalty as follows:
(A) Digital asset service providers.--Any digital
asset service provider that knowingly violates a
prohibition under paragraph (1)(B) shall be subject to
a civil monetary penalty of not more than $100,000 per
violation per day.
(B) Foreign payment stablecoin issuers.--Any
foreign payment stablecoin issuer that knowingly
continues to publicly offer a payment stablecoin in the
United States after publication of the determination of
noncompliance under paragraph (1)(A) shall be subject
to a civil monetary penalty of not more than $1,000,000
per violation per day, and the Secretary of the
Treasury may seek an injunction in a district court of
the United States to bar the foreign payment stablecoin
issuer from engaging in financial transactions in the
United States or with United States persons.
(C) Determination of the number of violations.--For
purposes of determining the number of violations for
which to impose a penalty under subparagraph (A) or
(B), separate acts of noncompliance are a single
violation when the acts are the result of a common or
substantially overlapping originating cause.
(D) Commencement of civil actions.--The Secretary
of the Treasury may commence a civil action against a
foreign payment stablecoin issuer in a district court
of the United States to--
(i) recover a civil monetary penalty
assessed under subparagraph (A) or (B);
(ii) seek an injunction to bar the foreign
payment stablecoin issuer from engaging in
financial transactions in the United States or
with United States persons; or
(iii) seek an injunction to stop a digital
asset service provider from offering on the
platform of the digital asset service provider
payment stablecoins issued by the foreign
payment stablecoin issuer.
(c) Waiver and Licensing Authority Exemptions.--
(1) In general.--The Secretary of the Treasury may offer a
waiver, general license, or specific license to any United
States person engaging in secondary trading described in
subsection (b)(1)(B) on a case-by-case basis if the Secretary
determines that--
(A) prohibiting secondary trading would adversely
affect the financial system of the United States; or
(B) the foreign payment stablecoin issuer is taking
tangible steps to remedy the failure to comply with the
lawful order that resulted in the noncompliance
determination under subsection (a).
(2) National security waiver.--The Secretary of the
Treasury, in consultation with the Director of National
Intelligence and the Secretary of State, may waive the
application of the secondary trading restrictions under
subsection (b)(1)(B) if the Secretary of the Treasury
determines that the waiver is in the national security interest
of the United States.
(3) Waiver for intelligence and law enforcement
activities.--The head of a department or agency may waive the
application of this section with respect to--
(A) activities subject to the reporting
requirements under title V of the National Security Act
of 1947 (50 U.S.C. 3091 et seq.), or any authorized
intelligence activities of the United States; or
(B) activities necessary to carry out or assist law
enforcement activity of the United States.
(4) Report required.--Not later than 7 days after issuing a
waiver or a license under paragraph (1), the Secretary of the
Treasury shall submit a report to the chairs and ranking
members of the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the
House of Representatives, including the text of the waiver or
license, as well as the facts and circumstances justifying the
waiver determination, and provide a briefing on the report.
SEC. 9. ANTI-MONEY LAUNDERING INNOVATION.
(a) Public Comment.--Beginning on the date that is 30 days after
the date of enactment of this Act, and for a period of 60 days
thereafter, the Secretary of the Treasury shall seek public comment to
identify innovative or novel methods, techniques, or strategies that
regulated financial institutions use, or have the potential to use, to
detect illicit activity, such as money laundering, involving digital
assets, including comments with respect to--
(1) application program interfaces;
(2) artificial intelligence;
(3) digital identify verification; and
(4) use of blockchain technology and monitoring.
(b) Treasury Research.--
(1) In general.--Upon completion of the public comment
period described in subsection (a), the Secretary of the
Treasury shall conduct research on the innovative or novel
methods, techniques, or strategies that regulated financial
institutions use, or have the potential to use, to detect
illicit activity, such as money laundering, involving digital
assets that were identified in such public comment period.
(2) Research factors.--With respect to each innovative or
novel method, technique, or strategy described in paragraph
(1), the Financial Crimes Enforcement Network shall evaluate
and consider the following factors against existing methods,
techniques, or strategies:
(A) Improvements in the ability of financial
institutions to detect illicit activity involving
digital assets.
(B) Costs to regulated financial institutions.
(C) The amount and sensitivity of information that
is collected or reviewed.
(D) Privacy risks associated with the information
that is collected or reviewed.
(E) Operational challenges and efficiency
considerations.
(F) Cybersecurity risks.
(G) Effectiveness of methods, techniques, or
strategies at mitigating illicit finance.
(c) Treasury Risk Assessment.--As part of the national strategy for
combating terrorist and other illicit financing required under sections
261 and 262 of the Countering America's Adversaries Through Sanctions
Act (Public Law 115-44; 131 Stat. 934), the Secretary of the Treasury
shall consider--
(1) the source of illicit activity, such as money
laundering and sanctions evasion involving digital assets;
(2) the effectiveness of and gaps in existing methods,
techniques, and strategies used by regulated financial
institutions in detecting illicit activity, such as money
laundering, involving digital assets;
(3) the impact of existing regulatory frameworks on the use
and development of innovative methods, techniques, or
strategies by regulated financial institutions; and
(4) any foreign jurisdictions that pose a high risk of
facilitating illicit activity through the use of digital assets
to obtain fiat currency.
(d) FinCEN Guidance or Rulemaking.--Not later than 2 years after
the date of enactment of this Act, the Financial Crimes Enforcement
Network shall issue public guidance or notice and comment rulemaking,
based on the results of the research and risk assessments required
under this section, relating to the following:
(1) The implementation of innovative or novel methods,
techniques, or strategies by regulated financial institutions
to detect illicit activity involving digital assets.
(2) Best practices for payment stablecoin issuers to
identify and report illicit activity involving the payment
stablecoin of a permitted payment stablecoin issuer, including,
fraud, cybercrime, money laundering, financing of terrorism,
sanctions evasion, and insider trading.
(3) Best practices for payment stablecoin issuers' systems
and practices to monitor transactions on blockchains, digital
asset mixing services, tumblers, or other similar services that
mix payment stablecoins in such a way as to make such
transaction or the identity of the transaction parties less
identifiable.
(e) Recommendations and Report to Congress.--Not later than 2 years
after the date of enactment of this Act, and annually thereafter for a
period of 4 years, the Secretary of the Treasury shall submit to the
chairs and ranking members of the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives a report, and provide a briefing of such
report, on--
(1) legislative and regulatory proposals to allow regulated
financial institutions to develop and implement novel and
innovative methods, techniques, or strategies to detect illicit
activity, such as money laundering and sanctions evasion,
involving digital assets;
(2) the results of the research and risk assessments
conducted pursuant to this section; and
(3) efforts to support the ability of financial
institutions to implement novel and innovative methods,
techniques, or strategies to detect illicit activity, such as
money laundering and sanctions evasion, involving digital
assets.
(f) Rule of Construction.--Nothing in this section shall be
construed to limit the existing authority of the Secretary of the
Treasury or the primary Federal payment stablecoin regulators to, prior
to the submission of a report required under this section, use existing
exemptive authorities, the no-action letter process, or rulemaking
authorities in a manner that encourages regulated financial
institutions to adopt novel or innovative methods, techniques, or
strategies to detect illicit activity, such as money laundering,
involving digital assets.
SEC. 10. CUSTODY OF PAYMENT STABLECOIN RESERVE AND COLLATERAL.
(a) In General.--A person may only engage in the business of
providing custodial or safekeeping services for the payment stablecoin
reserve, the payment stablecoins used as collateral, or the private
keys used to issue permitted payment stablecoins if the person--
(1) is subject to--
(A) supervision or regulation by a primary Federal
payment stablecoin regulator or a primary financial
regulatory agency described under subparagraph (B) or
(C) of section 2(12) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C.
5301(12)); or
(B) supervision by a State bank supervisor, as
defined under section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813), or a State credit union
supervisor, as defined under section 6003 of the Anti-
Money Laundering Act of 2020 (31 U.S.C. 5311 note), and
such State bank supervisor or State credit union
supervisor makes available to the Board such
information as the Board determines necessary and
relevant to the categories of information under
subsection (d); and
(2) complies with the requirements under subsection (b),
unless such person holds such property in accordance with
similar requirements as required by a primary Federal payment
stablecoin regulator, the Securities and Exchange Commission,
or the Commodity Futures Trading Commission.
(b) Customer Property Requirement.--A person described in
subsection (a) shall--
(1) with respect to payment stablecoin reserves received
from a permitted payment stablecoin issuer for deposit in a
reserve account, treat and deal with such payment stablecoin
reserves as belonging to the holders of the permitted payment
stablecoins issued by such issuer and not as the property of
such person or of such permitted payment stablecoin issuer; and
(2) with respect to other property described in subsection
(a)--
(A) treat and deal with the payment stablecoins,
private keys, cash, and other property of a person for
whom or on whose behalf the person described in that
subsection receives, acquires, or holds payment
stablecoins, private keys, cash, and other property
(hereinafter referred to in this section as the
``customer'') as belonging to such customer and not as
the property of such person; and
(B) take such steps as are appropriate to protect
the payment stablecoins, private keys, cash, and other
property of a customer from the claims of creditors of
the person.
(c) Commingling Prohibited.--
(1) In general.--Payment stablecoin reserves, payment
stablecoins, cash, and other property of a permitted payment
stablecoin issuer or customer shall be separately accounted for
by a person described in subsection (a) and shall be segregated
from and not be commingled with the funds of the person.
(2) Exceptions.--Notwithstanding paragraph (1) or
subsection (b)--
(A) the payment stablecoin reserves, payment
stablecoins, cash, and other property of a permitted
payment stablecoin issuer or customer may, for
convenience, be commingled and deposited in an omnibus
account holding the payment stablecoin reserves,
payment stablecoins, cash, and other property of more
than 1 permitted payment stablecoin issuer or customer
at a State chartered depository institution, an insured
depository institution, national bank, or trust
company, and any payment stablecoin reserves in the
form of cash held in the form of a deposit liability at
a depository institution shall not be subject to any
requirement relating to the separation of such cash
from the property of the applicable depository
institution;
(B) such share of the payment stablecoin reserves,
payment stablecoins, cash, and other property of the
permitted payment stablecoin issuer or customer that
shall be necessary to transfer, adjust, or settle a
transaction or transfer of assets may be withdrawn and
applied to such purposes, including the payment of
commissions, taxes, storage, and other charges lawfully
accruing in connection with the provision of services
by a person described in subsection (a);
(C) in accordance with such terms and conditions as
a primary Federal payment stablecoin regulator may
prescribe by rule, regulation, or order, any payment
stablecoin reserves, payment stablecoins, cash, and
other property described in this subsection may be
commingled and deposited in permitted payment
stablecoin issuer or customer accounts with payment
stablecoin reserves, payment stablecoins, cash, and
other property received by the person and required by
the primary Federal payment stablecoin regulator to be
separately accounted for, treated as, and dealt with as
belonging to such permitted payment stablecoin issuers
or customers; or
(D) an insured depository institution that provides
custodial or safekeeping services for payment
stablecoin reserves shall be permitted to hold payment
stablecoin reserves in the form of cash on deposit.
(3) Customer priority.--With or without the segregation
required under paragraph (1), the claims of a customer with
respect to the property described in that paragraph shall have
priority over the claims of any person other than a customer
against a person described in subparagraph (a) unless the
customer expressly consents to such other priority of claim.
(d) Regulatory Information.--A person described under subsection
(a) shall submit to the applicable primary Federal payment stablecoin
regulator information concerning the person's business operations and
processes to protect customer assets, in such form and manner as the
primary regulator shall determine.
(e) Exclusion.--The requirements of this section shall not apply to
any person solely on the basis that such person engages in the business
of providing hardware or software to facilitate a customer's own
custody or safekeeping of the customer's payment stablecoins or private
keys.
SEC. 11. TREATMENT OF PAYMENT STABLECOIN ISSUERS IN INSOLVENCY
PROCEEDINGS.
(a) In General.--In any insolvency proceeding of a permitted
payment stablecoin issuer under Federal or State law, including any
proceeding under title 11, United States Code, and any insolvency
proceeding administered by a State payment stablecoin regulator with
respect to a permitted payment stablecoin issuer, the claim of a person
holding payment stablecoins issued by the permitted payment stablecoin
issuer shall have priority over the claims of the permitted payment
stablecoin issuer and any other creditor of the permitted payment
stablecoin issuer, with respect to required payment stablecoin
reserves, subject to section 507(e) of title 11, United States Code, as
added by subsection (d).
(b) Definitions.--Section 101 of title 11, United States Code, is
amended by adding after paragraph (40B) the following:
``(40C) The terms `payment stablecoin' and `permitted
payment stablecoin issuer' have the meanings given those terms
in section 2 of the GENIUS Act.''.
(c) Automatic Stay.--Section 362 of title 11, United States Code,
is amended--
(1) in subsection (a)--
(A) in paragraph (7), by striking ``and'';
(B) in paragraph (8), by striking the period and
inserting ``; and''; and
(C) by adding at the end the following:
``(9) the redemption of payment stablecoins issued by the
permitted payment stablecoin issuer, from payment stablecoin
reserves required to be maintained under section 4 of the
GENIUS Act.''; and
(2) in subsection (d)--
(A) in paragraph (3)(B)(ii), by striking ``or'' at
the end;
(B) in paragraph (4)(B), by striking the period at
the end and inserting ``; or''; and
(C) by inserting after paragraph (4) the following:
``(5) with respect to the redemption of payment stablecoins
held by a person, if the court finds, subject to the motion and
attestation of the permitted payment stablecoin issuer on the
petition date, there are payment stablecoin reserves available
for distribution on a ratable basis to similarly situated
payment stablecoin holders, provided that the court shall use
best efforts to enter a final order to begin distributions
under this paragraph not later than 14 days after the date of
the required hearing.''.
(d) Priority in Bankruptcy Proceedings.--Section 507 of title 11,
United States Code, is amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by striking ``The following'' and inserting ``Subject to
subsection (e), the following''; and
(2) by adding at the end the following:
``(e) Notwithstanding subsection (a), if a payment stablecoin
holder is not able to redeem all outstanding payment stablecoin claims
from required payment stablecoin reserves maintained by the permitted
payment stablecoin issuer, any remaining claim of a person holding a
payment stablecoin issued by the permitted payment stablecoin issuer
shall have first priority over any other claim, including over any
expenses and claims that have priority under that subsection, to the
extent compliance with section 4 of the GENIUS Act would have required
additional reserves to be maintained by the permitted payment
stablecoin issuer for payment stablecoin holders.''.
(e) Payment Stablecoin Reserves.--Section 541(b) of title 11,
United States Code, is amended--
(1) in paragraph (9), in the matter following subparagraph
(B), by striking ``or'' at the end;
(2) in paragraph (10)(C), by striking the period and
inserting ``; or''; and
(3) by inserting after paragraph (10) the following:
``(11) required payment stablecoin reserves under section 4
of the GENIUS Act.''.
(f) Intervention.--Section 1109 of title 11, United States Code, is
amended by adding at the end the following:
``(c) The Comptroller of the Currency or State payment stablecoin
regulator (as defined in section 2 of the GENIUS Act) shall raise, and
shall appear and be heard on, any issue, including the protection of
customers, in a case under this chapter in which the debtor is a
permitted payment stablecoin issuer.''.
(g) Application of Existing Insolvency Law.--In accordance with
otherwise applicable law, an insolvency proceeding with respect to a
permitted payment stablecoin issuer shall occur as follows:
(1) A depository institution (as defined in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813)) shall be
resolved by the Federal Deposit Insurance Corporation, National
Credit Union Administration, or State payment stablecoin
regulator, as applicable.
(2) A subsidiary of a depository institution (as defined in
section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813)) or a nonbank entity may be considered a debtor under
title 11, United States Code.
SEC. 12. INTEROPERABILITY STANDARDS.
The primary Federal payment stablecoin regulators, in consultation
with the National Institute of Standards and Technology, other relevant
standard-setting organizations, and State bank and credit union
regulators, shall assess and, if necessary, may, pursuant to section
553 of title 5, United States Code, and in a manner consistent with the
National Technology Transfer and Advancement Act of 1995 (Public Law
104-113), prescribe standards for permitted payment stablecoin issuers
to promote compatibility and interoperability with--
(1) other permitted payment stablecoin issuers; and
(2) the broader digital finance ecosystem, including
accepted communications protocols and blockchains, permissioned
or public.
SEC. 13. RULEMAKING.
(a) In General.--Not later than 1 year after the date of enactment
of this Act, each primary Federal payment stablecoin regulator, the
Secretary of the Treasury, and each State payment stablecoin regulator
shall promulgate regulations to carry out this Act through appropriate
notice and comment rulemaking.
(b) Coordination.--Federal payment stablecoin regulators, the
Secretary of the Treasury, and State payment stablecoin regulators
should coordinate, as appropriate, on the issuance of any regulations
to implement this Act.
(c) Report Required.--Not later than 180 days after the effective
date of this Act, each Federal banking agency shall submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives a
report that confirms and describes the regulations promulgated to carry
out this Act.
SEC. 14. STUDY ON NON-PAYMENT STABLECOINS.
(a) Study by Treasury.--
(1) Study.--The Secretary of the Treasury, in consultation
with the Board, the Comptroller, the Corporation, the
Securities and Exchange Commission, and the Commodity Futures
Trading Commission shall carry out a study of non-payment
stablecoins, including endogenously collateralized payment
stablecoins.
(2) Report.--Not later than 365 days after the date of the
enactment of this Act, the Secretary of the Treasury shall
provide to the Committee on Banking, Housing, and Urban Affairs
of the Senate and the Committee on Financial Services of the
House of Representatives a report that contains all findings
made in carrying out the study under paragraph (1), including
an analysis of--
(A) the categories of non-payment stablecoins,
including the benefits and risks of technological
design features;
(B) the participants in non-payment stablecoin
arrangements;
(C) utilization and potential utilization of non-
payment stablecoins;
(D) the nature of reserve compositions;
(E) types of algorithms being employed;
(F) governance structure, including aspects of
decentralization;
(G) the nature of public promotion and advertising;
and
(H) the clarity and availability of consumer
notices disclosures.
(3) Classified annex.--A report under this section may
include a classified annex, if applicable.
(b) Endogenously Collateralized Payment Stablecoin Defined.--In
this section, the term ``endogenously collateralized payment
stablecoin'' means any digital asset--
(1) the originator of which has represented will be
converted, redeemed, or repurchased for a fixed amount of
monetary value; and
(2) that relies solely on the value of another digital
asset created or maintained by the same originator to maintain
the fixed price.
SEC. 15. REPORTS.
(a) Annual Reporting Requirement.--Beginning on the date that is 1
year after the date of enactment of this Act, and annually thereafter,
the primary Federal payment stablecoin regulators shall submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate, the
Committee on Financial Services of the House of Representatives, and
the Director of the Office of Financial Research a report, which may
include a classified annex, if applicable, on the status of the payment
stablecoin industry, including--
(1) a summary of trends in payment stablecoin activities;
(2) a summary of the number of applications for approval as
a permitted payment stablecoin issuer under section 5,
including aggregate approvals and rejections of applications;
and
(3) a description of the potential financial stability
risks posed to the safety and soundness of the broader
financial system by payment stablecoin activities.
(b) FSOC Report.--The Financial Stability Oversight Council shall
incorporate the findings in the report under subsection (a) into the
annual report of the Council required under section 112(a)(2)(N) of the
Financial Stability Act of 2010 (12 U.S.C. 5322(a)(2)(N)).
SEC. 16. AUTHORITY OF BANKING INSTITUTIONS.
(a) Rule of Construction.--Nothing in this Act may be construed to
limit the authority of a depository institution, Federal credit union,
State credit union, national bank, or trust company to engage in
activities permissible pursuant to applicable State and Federal law,
including--
(1) accepting or receiving deposits or shares (in the case
of a credit union), and issuing digital assets that represent
those deposits or shares;
(2) utilizing a distributed ledger for the books and
records of the entity and to effect intrabank transfers; and
(3) providing custodial services for payment stablecoins,
private keys of payment stablecoins, or reserves backing
payment stablecoins.
(b) Regulatory Review.--Entities regulated by the primary Federal
payment stablecoin regulators are authorized to engage in the payment
stablecoin activities and investments contemplated by this Act,
including acting as a principal or agent with respect to any payment
stablecoin and payment of fees to facilitate customer transactions. The
primary Federal payment stablecoin regulators shall review all existing
guidance and regulations, and if necessary, amend or promulgate new
regulations and guidance, to clarify that regulated entities are
authorized to engage in such activities and investments.
(c) Treatment of Custody Activities.--The appropriate Federal
banking agency, the National Credit Union Administration (in the case
of a credit union), and the Securities and Exchange Commission may not
require a depository institution, national bank, Federal credit union,
State credit union, or trust company, or any affiliate thereof--
(1) to include digital assets held in custody that are not
owned by the entity as a liability on the financial statement
or balance sheet of the entity, including payment stablecoin
custody or safekeeping activities; or
(2) to hold in custody or safekeeping regulatory capital
against digital assets and reserves backing such assets
described in section 4(a)(1)(A), except as necessary to
mitigate against operational risks inherent in custody or
safekeeping services, as determined by--
(A) the appropriate Federal banking agency;
(B) the National Credit Union Administration (in
the case of a credit union);
(C) a State bank supervisor; or
(D) a State credit union supervisor.
(d) State-chartered Depository Institutions.--A State-chartered
depository institution chartered under the banking laws of a State
shall not be required to obtain a charter, license, or other
authorization to do business from a State to engage in the business of
money transmission, the issuance of payment instruments or stored
value, custodial services, or any similar or related activity, if such
State-chartered depository institution is--
(1) subject to prudential regulation and supervision by the
chartering State in a manner that is substantially similar to
the prudential regulation and supervision applicable to insured
depository institutions chartered by such State; and
(2) required by the laws of the chartering State to
maintain reserves for any outstanding deposit liabilities in an
amount equal to or greater than such liabilities and to hold
such reserves in a manner that is at least as protective of
customers as is required under section 8.
(e) Definitions.--In this section:
(1) Depository institution; state bank supervisor.--The
terms ``depository institution'' and ``State bank supervisor''
have the meanings given those terms under section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813).
(2) Federal credit union; state credit union.--The terms
``Federal credit union'' and ``State credit union'' have the
meanings given those terms in section 101 of the Federal Credit
Union Act (12 U.S.C. 1752).
(3) State credit union supervisor.--The term ``State credit
union supervisor'' has the meaning given that term in section
6003 of the Anti-Money Laundering Act of 2020 (31 U.S.C. 5311
note).
SEC. 17. AMENDMENTS TO CLARIFY THAT PAYMENT STABLECOINS ARE NOT
SECURITIES OR COMMODITIES AND PERMITTED PAYMENT
STABLECOIN ISSUERS ARE NOT INVESTMENT COMPANIES.
(a) Investment Advisers Act of 1940.--Section 202(a)(18) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is amended by
adding at the end the following: ``The term `security' does not include
a payment stablecoin issued by a permitted payment stablecoin issuer,
as such terms are defined in section 2 of the GENIUS Act.''.
(b) Investment Company Act of 1940.--The Investment Company Act of
1940 (15 U.S.C. 80a-1 et seq.) is amended--
(1) in section 2(a)(36) of the Act (15 U.S.C. 80a-
2(a)(36)), by adding at the end the following: ``The term
`security' does not include a payment stablecoin issued by a
permitted payment stablecoin issuer, as such terms are defined
in section 2 of the GENIUS Act.''; and
(2) in section 3(c)(3) of the Act (15 U.S.C. 80a-3(c)(3)),
by inserting ``any permitted payment stablecoin issuer, as such
term is defined in section 2 of the GENIUS Act;'' after
``therefor;''.
(c) Securities Act of 1933.--Section 2(a)(1) of the Securities Act
of 1933 (15 U.S.C. 77b(a)(1)) is amended by adding at the end the
following: ``The term `security' does not include a payment stablecoin
issued by a permitted payment stablecoin issuer, as such terms are
defined in section 2 of the GENIUS Act.''.
(d) Securities Exchange Act of 1934.--Section 3(a)(10) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended by
adding at the end the following: ``The term `security' does not include
a payment stablecoin issued by a permitted payment stablecoin issuer,
as such terms are defined in section 2 of the GENIUS Act.''.
(e) Securities Investor Protection Act of 1970.--Section 16(14) of
the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll(14)) is
amended by adding at the end the following: ``The term `security' does
not include a payment stablecoin issued by a permitted payment
stablecoin issuer, as such terms are defined in section 2 of the GENIUS
Act.''.
(f) Commodity Exchange Act.--Section 1a(9) of the Commodity
Exchange Act (7 U.S.C. 1a(9)) is amended by adding at the end the
following: ``The term `commodity' does not include a payment stablecoin
issued by a permitted payment stablecoin issuer, as such terms are
defined in section 2 of the GENIUS Act.''
SEC. 18. EXCEPTION FOR FOREIGN PAYMENT STABLECOIN ISSUERS AND
RECIPROCITY FOR PAYMENT STABLECOINS ISSUED IN OVERSEAS
JURISDICTIONS.
(a) In General.--The prohibitions under section 3 shall not apply
to a foreign payment stablecoin issuer if all of the following apply:
(1) The foreign payment stablecoin issuer is subject to
regulation and supervision by a foreign payment stablecoin
regulator of a foreign country, a territory of the United
States, Puerto Rico, Guam, American Samoa, or the Virgin
Islands that has a regulatory and supervisory regime with
respect to payment stablecoins that the Secretary of the
Treasury determines, pursuant to subsection (b), is comparable
to the regulatory and supervisory regime established under this
Act, including, in particular, the requirements under section
4(a).
(2) The foreign payment stablecoin issuer is registered
with the Comptroller pursuant to subsection (c).
(3) The foreign payment stablecoin issuer holds reserves in
a United States financial institution sufficient to meet
liquidity demands of United States customers, unless otherwise
permitted under a reciprocal arrangement established pursuant
to subsection (d).
(b) Treasury Determination.--
(1) In general.--The Secretary of the Treasury may, in
consultation with the Federal payment stablecoin regulators,
make a determination as to whether a foreign country has a
regulatory and supervisory regime that is comparable to the
requirements established under this Act, including the
requirements under section 4(a).
(2) Request.--A foreign payment stablecoin issuer or a
foreign payment stablecoin regulator may request from the
Secretary of the Treasury a determination under paragraph (1).
(3) Timing for determination.--If a foreign payment
stablecoin issuer or foreign payment stablecoin regulator
requests a determination under paragraph (2), the Secretary of
the Treasury shall render a decision on the determination not
later than 210 days after the receipt of a substantially
complete determination request.
(4) Rescission of determination.--
(A) In general.--The Secretary of the Treasury may,
in consultation with the Federal payment stablecoin
regulators, rescind a determination made under
paragraph (1), if the Secretary determines that the
regulatory regime of such foreign country is no longer
comparable to the requirements established under this
Act.
(B) Limited safe harbor.--If the Secretary of the
Treasury rescinds a determination pursuant to
subparagraph (A), a digital asset service provider
shall have 90 days before the offer or sale of a
payment stablecoin issued by the foreign payment
stablecoin issuer that is the subject of the rescinded
determination shall be in violation of section 3.
(5) Public notice.--The Secretary of the Treasury shall
keep and make publicly available a current list of foreign
countries for which a determination under paragraph (1) has
been made.
(6) Rulemaking.--Not later than 1 year after the date of
enactment of this Act, the Secretary of the Treasury shall
issue such rules as may be required to carry out this section.
(c) Registration and Ongoing Monitoring.--
(1) Registration.--
(A) In general.--A foreign payment stablecoin
issuer may offer or sell payment stablecoins using a
digital asset service provider if the foreign payment
stablecoin issuer is registered with the Comptroller.
(B) Registration approval.--A registration of a
foreign payment stablecoin issuer filed in accordance
with this section shall be deemed approved on the date
that is 30 days after the date the Comptroller receives
the registration, unless the Comptroller notifies the
foreign payment stablecoin issuer in writing that such
registration has been rejected.
(C) Standards for rejection.--In determining
whether to reject a foreign payment stablecoin issuer's
registration, the Comptroller shall consider--
(i) the final determination of the
Secretary of the Treasury under this section;
(ii) the financial and managerial resources
of the United States operations of the foreign
payment stablecoin issuer;
(iii) whether the foreign payment
stablecoin issuer will provide adequate
information to the Comptroller as the
Comptroller determines is necessary to
determine compliance with this Act;
(iv) whether the foreign payment stablecoin
presents a risk to the financial stability of
the United States; and
(v) whether the foreign payment stablecoin
issuer presents illicit finance risks to the
United States.
(D) Procedure for appeal.--If the Comptroller
rejects a registration, not later than 30 days after
the date of receipt of such rejection, the foreign
payment stablecoin issuer may appeal the rejection by
notifying the Comptroller of the request to appeal.
(E) Rulemaking.--Pursuant to section 13 of this
Act, the Comptroller shall issue rules relating to the
standards for approval of registration requests and the
process for appealing denials of such registration
requests.
(F) Public notice.--The Comptroller shall keep and
make publicly available a current list of foreign
payment stablecoin issuer registrations that have been
approved.
(2) Ongoing monitoring.--A foreign payment stablecoin
issuer shall--
(A) be subject to reporting, supervision, and
examination requirements as determined by the
Comptroller; and
(B) consent to United States jurisdiction relating
to the enforcement of this Act.
(3) Lack of compliance.--
(A) Comptroller action.--The Comptroller may, in
consultation with the Secretary of the Treasury,
rescind approval of a registration of a foreign payment
stablecoin issuer under this subsection if the
Comptroller determines that the foreign payment
stablecoin issuer is not in compliance with the
requirements of this Act, including for maintaining
insufficient reserves or posing an illicit finance risk
or financial stability risk.
(B) Secretary action.--The Secretary of the
Treasury, in consultation with the Comptroller, may
revoke a registration of a foreign payment stablecoin
issuer under this subsection if the Secretary
determines that reasonable grounds exist for concluding
that the foreign payment stablecoin issuer presents
economic sanctions evasion, money laundering, or other
illicit finance risks, or, as applicable, violations,
or facilitation thereof.
(d) Reciprocity.--
(1) In general.--The Secretary of the Treasury may create
and implement reciprocal arrangements or other bilateral
agreements between the United States and jurisdictions with
payment stablecoin regulatory regimes that are comparable to
the requirements established under this Act, including, in
particular, section 4(a), and can demonstrate adequate
supervisory and enforcement capacity to facilitate
international transactions and interoperability with United
States dollar-denominated payment stablecoins issued overseas.
(2) Completion.--The Secretary of the Treasury should
complete the arrangements under this subsection not later than
the date that is 2 years after the date of enactment of this
Act.
SEC. 19. EFFECTIVE DATE.
This Act, and the amendments made by this Act, shall take effect on
the earlier of--
(1) the date that is 18 months after the date of enactment
of this Act; or
(2) the date that is 120 days after the date on which the
primary Federal payment stablecoin regulators issue any final
regulations implementing this Act.
Calendar No. 66
119th CONGRESS
1st Session
S. 1582
_______________________________________________________________________
A BILL
To provide for the regulation of payment stablecoins, and for other
purposes.
_______________________________________________________________________
May 5, 2025
Read the second time and placed on the calendar