Section 1 Short title
This Act may be cited as the “Guiding and Establishing National Innovation for U.S. Stablecoins of 2025” or the “GENIUS Act of 2025”.
Guiding and Establishing National Innovation for U.S. Stablecoins of 2025
A BILL
To provide for the regulation of payment stablecoins, and for other purposes.
Sec. 2 Definitions
In this Act:
Bank Secrecy Act— The term “Bank Secrecy Act” means—
section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b);
chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.); and
subchapter II of chapter 53 of title 31, United States Code.
Board— The term “Board” means the Board of Governors of the Federal Reserve System.
Comptroller— The term “Comptroller” means the Comptroller of the Currency.
Comptroller-regulated entity— The term Comptroller-regulated entity means any Federal qualified nonbank payment stablecoin issuer that is subject to regulation and supervision exclusively by the Comptroller, pursuant to section 4(a)(7).
Corporation— The term “Corporation” means the Federal Deposit Insurance Corporation.
Digital asset— The term “digital asset” means any digital representation of value which is recorded on a cryptographically-secured distributed ledger.
Distributed ledger— The term “distributed ledger” means technology where data is shared across a network that creates a public digital ledger of verified transactions or information among network participants and the data is linked using cryptography to maintain the integrity of the public ledger and execute other functions.
Federal qualified nonbank payment stablecoin issuer— The term “Federal qualified nonbank payment stablecoin issuer” means a nonbank entity approved by the primary Federal payment stablecoin regulator, pursuant to section 5, to issue payment stablecoins.
Institution-affiliated party— With respect to a permitted payment stablecoin issuer, the term “institution-affiliated party” means any director, officer, employee, or person in control of, or agent for, the permitted payment stablecoin issuer.
Insured depository institution— The term “insured depository institution” means—
an insured depository institution, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and
an insured credit union, as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).
Monetary value— The term “monetary value” means a national currency or deposit (as defined under Section 3 of the Federal Deposit Insurance Act) denominated in a national currency.
National currency— The term “national currency” means 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)), money issued by a central bank, and money issued by an intergovernmental organization pursuant to an agreement by 1 or more governments.
Nonbank entity— The term “nonbank entity” means a person that is not an insured depository institution or subsidiary of an insured depository institution.
Payment stablecoin— The term “payment stablecoin”—
means a digital asset—
that is or is designed to be used as a means of payment or settlement; and
the issuer of which—
is obligated to convert, redeem, or repurchase for a fixed amount of monetary value; and
represents it will maintain or creates the reasonable expectation that it will maintain a stable value relative to the value of a fixed amount of monetary value; and
that is not—
a national currency; or
a security issued by an investment company registered under section 8(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–8(a)).
Permitted payment stablecoin issuer— The term “permitted payment stablecoin issuer” means—
a subsidiary of an insured depository institution that has been approved to issue payment stablecoins under section 5;
a Federal qualified nonbank payment stablecoin issuer that has been approved to issue payment stablecoins under section 5; or
a State qualified payment stablecoin issuer.
Person— The term “person” means an individual, partnership, company, corporation, association (incorporated or unincorporated), trust, estate, cooperative organization, or other entity.
Primary Federal payment stablecoin regulator—
In general— The term “primary Federal payment stablecoin regulator” means—
with respect to an insured depository institution (other than an insured credit union) or a subsidiary of an insured depository institution (other than an insured credit union), the appropriate Federal banking agency of such insured depository institution (as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813));
with respect to an insured credit union or a subsidiary of an insured credit union, the National Credit Union Administration;
with respect to a Federal qualified nonbank payment stablecoin issuer that is not a national bank, the Comptroller; and
with respect to any entity chartered by the Comptroller, the Comptroller.
Primary Federal payment stablecoin regulators— The term “primary Federal payment stablecoin regulators” means the Comptroller, the Board, the Corporation, and the National Credit Union Administration.
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).
State— The term “State” means each of the several States, the District of Columbia, and each territory of the United States.
State qualified payment stablecoin issuer— The term “State qualified payment stablecoin issuer” means an entity that—
is legally established and approved to issue payment stablecoins by a State payment stablecoin regulator; and
issues a payment stablecoin in compliance with the requirements under section 4.
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.
State regulated depository institution— The term State regulated 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)).
Subsidiary of an insured credit union— With respect to an insured credit union, the term “subsidiary of an insured credit union” means—
an organization providing services to the insured credit union that are associated with the routine operations of credit unions, as described under section 107(7)(I) of the Federal Credit Union Act (12 U.S.C. 1757(7)(I)); and
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.
Sec. 3 Limitation on who may issue a payment stablecoin
It shall be unlawful for any person other than a permitted payment stablecoin issuer to issue a payment stablecoin in the United States.
Sec. 4 Requirements for issuing payment stablecoins
Standards for the issuance of payment stablecoins—
In general— Permitted payment stablecoin issuers shall—
maintain reserves backing the issuer’s payment stablecoins outstanding on an at least 1 to 1 basis, with reserves comprising—
United States coins and currency (including Federal reserve notes);
funds held as demand deposits (or other deposits that may be withdrawn upon request at any time) at insured depository institutions, regulated foreign depository institutions, or insured shares at insured depository institutions, subject to limitations established by the Corporation and the National Credit Union Administration, respectively, to address safety and soundness risks of such insured depository institutions;
Treasury bills, notes, or bonds—
with a remaining maturity of 93 days or less; or
issued with a maturity of 93 days or less;
repurchase agreements with a maturity of 7 days or less that are backed by Treasury bills with a maturity of 90 days or less;
reverse repurchase agreements with a maturity of 7 days or less that are collateralized by Treasury notes, bills, or bonds on an overnight basis, subject to overcollateralization in line with standard market terms, that are—
tri-party;
centrally cleared through a clearing house; or
bilateral with a counterparty that the issuer has determined to be adequately creditworthy even in the event of severe market stress;
money market funds, invested solely in underlying assets described in clauses (i) through (iv) of subparagraph (A); or
Central Bank reserve deposits;
publicly disclose the issuer’s redemption policy;
establish procedures for timely redemption of outstanding payment stablecoins; and
publish the monthly composition of the issuer’s reserves on the website of the issuer, containing—
the total number of outstanding payment stablecoins issued by the issuer; and
the amount and composition of the reserves described under subparagraph (A).
Prohibition on rehypothecation— Reserves described under paragraph (1)(A) may not be pledged, rehypothecated, or reused, except for the purpose of creating liquidity to meet reasonable expectations of requests to redeem payment stablecoins, such that reserves in the form of Treasury bills may be pledged as collateral for repurchase agreements with a maturity of 90 days or less, provided that either—
the repurchase agreements are cleared by a central clearing counterparty that is approved by the primary Federal or State payment stablecoin regulator; or
the permitted payment stablecoin issuer receives the prior approval of the primary Federal or State payment stablecoin regulator.
Monthly certification; examination of reports by registered public accounting firm—
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.
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—
the primary Federal payment stablecoin regulator; or
in the case of a State qualified payment stablecoin issuer, to the State payment stablecoin regulator.
Criminal penalty— Any person who submits a certification required under subparagraph (B) knowing that such certification is false shall be subject to the criminal penalties set forth under section 1350(c) of title 18, United States Code.
Capital, liquidity, and risk management requirements—
In general— The primary Federal payment stablecoin regulators shall, jointly, or in the case of a State qualified payment stablecoin issuer, the State payment stablecoin regulator shall, issue—
capital requirements applicable to permitted payment stablecoin issuers, which may not exceed what is sufficient to ensure the permitted payment stablecoin issuer’s ongoing operations;
appropriate liquidity and interest rate risk management standards applicable to permitted payment stablecoin issuers, which may not exceed what is sufficient to ensure the financial integrity of the permitted payment stablecoin issuer and the ability of the issuer to meet the financial obligations of the issuer, including redemptions; and
appropriate operational, compliance, and information technology risk management standards, including Bank Secrecy Act and sanctions compliance, tailored to the business model and risk profile of the permitted payment stablecoin issuer, consistent with other legal authorities.
Rule of construction— Nothing in this paragraph shall be construed to limit—
the authority of the primary Federal regulators, in prescribing standards under this paragraph, to tailor or differentiate among issuers on an individual basis or by category, taking into consideration their capital structure, riskiness, complexity, financial activities (including financial activities of their subsidiaries), size, and any other risk related factors that the primary Federal regulator determines appropriate; or
the supervisory, regulatory, or enforcement authority of an appropriate Federal banking agency to further the safe and sound operation of an institution under the supervision of the appropriate Federal banking agency.
Applicability of existing capital standards— With respect to the promulgation of rules under subsection (a)(1)(A), section 171 of the Financial Stability Act of 2010 (12 U.S.C. 5371(a)(1)(A)) shall not apply.
Treatment under the Bank Secrecy Act— A permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the Bank Secrecy Act.
Limitation on stablecoin activities—
In general— A permitted payment stablecoin issuer may only—
issue payment stablecoins;
redeem payment stablecoins;
manage related reserves (including purchasing and holding reserve assets);
provide custodial or safekeeping services for payment stablecoins, required reserves, or private keys of payment stablecoins; and
undertake other functions that directly support the work of issuing and redeeming payment stablecoins.
Rule of construction— Nothing in subparagraph (A) shall prevent a permitted stablecoin issuer from engaging in non-stablecoin activities that are explicitly allowed by the relevant regulator.
Regulation by the Comptroller—
In general— A Federal qualified nonbank payment stablecoin issuer shall be regulated and supervised exclusively by the Comptroller, which shall have authority, in coordination with other relevant regulators, to issue such regulations and orders as necessary to ensure the safety and soundness of the issuers, consistent with the provisions of this Act.
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 nonbank payment stablecoin issuers—The Comptroller of the Currency shall, in coordination with other relevant regulators, issue such regulations and orders as necessary to ensure the safety and soundness of any nonbank entity approved by the Comptroller to issue payment stablecoins.”
State-Level regulatory regimes—
Option for State-level regulatory regime— Notwithstanding the Federal regulatory framework established under subsection (a), a stablecoin issuer with a total market capitalization 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.
Review— State regulators shall review State-level regulatory regimes according to criteria the State regulators establish for determining whether a State-level regulatory regime is substantially similar to the Federal regulatory framework under subsection (a).
Certification—
Initial certification— Subject to subparagraph (B), not later than 1 year after the date of enactment of this Act, State regulators shall submit to the Secretary of the Treasury an initial certification that their State-level regulatory regime meets the criteria for substantial similarity under paragraph (2).
Form of certification— The initial certification required under subparagraph (A) shall contain, in a form prescribed by the Secretary of the Treasury, an attestation that the State-level regulatory regime meets the criteria for substantial similarity under paragraph (2).
Annual recertification— Not later than a date to be determined by the Secretary each year, the State shall submit to the Secretary of the Treasury an additional certification that confirms the accuracy of initial certification submitted under subparagraph (A).
Not substantially similar—
In general— If a State regulator does not submit a certification under paragraph (3), then a payment stablecoin issuer operating under this subsection shall be subject to the Federal regulatory framework as described in subsection (c), notwithstanding the market capitalization threshold therein.
Treasury review— The Secretary of the Treasury may reject a certification under paragraph (3) if the Secretary determines that the State-level regulatory regime is not substantially similar to the Federal regulatory framework under subsection (a), and the payment stablecoin issuer shall be subject to the Federal regulatory framework as described in subsection (c), notwithstanding the market capitalization threshold therein.
Appellate review— A payment stablecoin issuer may challenge the determination of the State regulator or the Secretary of the Treasury under this paragraph in the United States District Court for the District of Columbia.
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 (3).
Transition to Federal regulation—
Depository institution— A State-regulated depository institution that has been approved as a payment stablecoin issuer with a market capitalization of more than $10,000,000,000 shall—
not later than 360 days after reaching such market capitalization, transition to regulation under the Federal regulatory framework of the Board; or
beginning on the date of reaching such market capitalization, cease issuing new stablecoins until the State-regulated stablecoin issuer is under the $10,000,000,000 market capitalization threshold.
Other institutions— A State qualified payment stablecoin issuer not described in paragraph (1) with a market capitalization of more than $10,000,000,000 shall—
not later than 360 days after reaching such market capitalization, transition to regulation under the regulatory framework of the Comptroller; or
beginning on the date of reaching such market capitalization, cease issuing new stablecoins until the State-regulated stablecoin issuer is under the $10,000,000,000 market capitalization threshold.
Conditional approval— Upon filing an application with the appropriate Federal regulator, a State qualified payment stablecoin issuer shall be deemed conditionally approved, pending final approval or denial of the application.
Waiver— The applicable Federal regulator may waive the requirement under paragraph (1) or (2) to permit a State qualified payment stablecoin issuer to remain under a State-level regulatory regime.
Rulemaking—
In general— The primary Federal payment stablecoin regulators and State payment stablecoin regulators may issue such orders and regulations as may be necessary to administer and carry out the requirements of this section, including to establish conditions, and to prevent evasions thereof.
Joint issuance of regulation— All regulations issued to carry out this section shall be issued jointly by the primary Federal payment stablecoin regulators, if not issued by a State payment stablecoin regulator.
Rulemaking deadline— Not later than the end of the 180-day period beginning on the date of enactment of this Act, the Federal payment stablecoin regulators shall issue regulations to carry out this section.
Sec. 5 Approval of subsidiaries of insured depository institutions and Federal qualified nonbank payment stablecoin issuers
Application—
In general— The primary Federal payment stablecoin regulator shall receive, review, and approve applications from any insured depository institution that seeks to issue payment stablecoins through a subsidiary and any nonbank entity that seeks to issue payment stablecoins. The primary Federal payment stablecoin regulator shall establish a process for the licensing and regulation of these entities.
Authority to issue regulations and process applications— The primary Federal payment stablecoin regulators shall, before the effective date described in section 16—
issue regulations to carry out this section; and
pursuant to the regulations described in subparagraph (A), accept and process applications under this Act.
Mandatory approval process— The primary Federal payment stablecoin regulator shall, upon receipt of a complete application, evaluate and make a determination on each application based on the criteria established under this Act.
Evaluation of applications— A complete application received under subsection (a) shall be evaluated by the primary Federal payment stablecoin regulator using the factors described in subsection (c).
Factors To be considered— The factors described in this subsection are 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 the financial condition and resources, to meet the requirements set forth in section 4.
Timing for decision; grounds for denial—
Timing— The primary Federal payment stablecoin regulator shall render a decision on an application no later than 120 days after informing the applicant that the application is complete.
Denial of application—
Grounds for denial— The primary Federal payment stablecoin regulator shall only deny a 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).
Explanation required— If the 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.
Opportunity for hearing; final determination—
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.
Timing— Upon receipt of a timely request, 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).
Final determination— Not later than 60 days after the date of a hearing under this subparagraph, the primary Federal payment stablecoin regulator shall notify the applicant of the final determination of the Comptroller, which shall contain a statement of the basis for that determination, with specific findings.
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.
Failure to render a decision— If the 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.
Right to reapply— The denial of an application under this section shall not prohibit the applicant from filing a subsequent application.
Report on pending applications— The Comptroller shall annually report to Congress on the applications that have been pending for 6 months or longer since the date of the initial application filed under subsection (a) where the applicant has been informed that the application remains incomplete, including providing documentation on the status of the application and why the application has not yet been approved.
Rulemaking— The Comptroller shall issue rules necessary for the regulation of the issuance of payment stablecoins, but may not impose requirements inconsistent with the requirements specified under section 4.
Sec. 6 Supervision and enforcement with respect to subsidiaries of insured depository institutions and Comptroller-regulated entities
Supervision—
Subsidiary of an insured depository institution—
In general— Each permitted payment stablecoin issuer that is a subsidiary of an insured depository institution shall be subject to supervision by the primary Federal payment stablecoin regulator in the same manner as such insured depository institution.
Gramm-Leach-Bliley Act— For purposes of title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.) each permitted payment stablecoin issuer that is a subsidiary of an insured depository institution shall be deemed a financial institution.
Comptroller-regulated entities—
Submission of reports— Each Comptroller-regulated entity shall, upon request, submit reports to the Comptroller as to—
the financial condition of the Comptroller-regulated entity, systems for monitoring and controlling financial and operating risks; and
compliance by the Comptroller-regulated entity (and any subsidiary thereof) with this Act.
Examinations— The Comptroller may make examinations of a Comptroller-regulated entity and each subsidiary of such entity in order to inform the Comptroller of—
the nature of the operations and financial condition of the Comptroller-regulated entity;
the financial, operational, and other risks within the Comptroller-regulated entity that may pose a threat to—
the safety and soundness of the Comptroller-regulated entity; or
the stability of the financial system of the United States; and
the systems of the Comptroller-regulated entity for monitoring and controlling the risks described in clause (ii).
Requirements for efficiency—
Use of existing reports— In supervising and examining a Comptroller-regulated entity, the Comptroller shall, to the fullest extent possible, use existing reports and other supervisory information.
Avoidance of duplication— The Comptroller shall, to the fullest extent possible, avoid duplication of examination activities, reporting requirements, and requests for information in carrying out this Act with respect to a Comptroller-regulated entity.
Consideration of burden— The Comptroller shall, with respect to any examination or request for the submission of a report under this paragraph, only request examinations and reports at a cadence and in a format that is similar to those required for similarly situated Comptroller-regulated entities.
Enforcement—
Suspension or revocation of registration— The primary Federal payment stablecoin regulator may prohibit a 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—
materially violating or has materially violated this Act or any regulation or order issued under this Act; or
materially violating or has materially violated 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.
Cease-and-desist proceedings— If the primary Federal payment stablecoin regulator has reasonable cause to believe that a permitted payment stablecoin issuer or any institution-affiliated party of a 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—
cease and desist from such violation or practice; or
take affirmative action to correct the conditions resulting from any such violation or practice.
Removal and prohibition authority— The primary Federal payment stablecoin regulator may remove an institution-affiliated party of a permitted payment stablecoin issuer from their position or office or prohibit further participation in the affairs of the permitted payment stablecoin issuer or all permitted payment stablecoin issuers by such institution-affiliated party, if the primary Federal payment stablecoin regulator determines that—
the institution-affiliated party has, directly or indirectly, committed a violation or attempted violation of this Act or any regulation or order issued under this Act; or
the institution-affiliated party has committed a violation of any provision of subchapter II of chapter 53 of title 31, United States Code.
Procedures—
In general— If the 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 sections 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818).
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)).
Injunction— The primary Federal payment stablecoin regulator may, in 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)) for judicial enforcement of any effective and outstanding notice or order issued under this subsection.
Temporary cease-and-desist proceedings— If the 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 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)) to issue a temporary cease-and-desist order.
Civil money penalties—
Failure to be approved— Any person who issues a United States dollar-denominated payment stablecoin and who is not a permitted payment stablecoin issuer, and any institution-affiliated party of such a person who knowingly participates is 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.
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 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, shall be liable for a civil penalty of up to $100,000 for each day during which the violation continues.
Second tier— Except as provided in subparagraph (A), and in addition to the penalties described under 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 thereunder, is liable for a civil penalty of up to an additional $100,000 for each day during which the violation continues.
Procedure— Any penalty imposed under this paragraph may be assessed and collected by the 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)).
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 the 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 such party ceased to be an institution-affiliated party with respect to such permitted payment stablecoin issuer.
Non-applicability to a State qualified payment stablecoin issuer— This subsection shall not apply to a State qualified payment stablecoin issuer.
Sec. 7 State qualified payment stablecoin issuers
In general— A State payment stablecoin regulator shall have supervisory, examination, and enforcement authority over a State qualified payment stablecoin issuer of such State.
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 carry out the supervision, examination, and enforcement authority with respect to the State qualified payment stablecoin issuers of such State.
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.
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 a State qualified payment stablecoin issuers.
Enforcement authority in exigent circumstances—
Board—
In general— Subject to subparagraph (C), in exigent circumstances, the Board may, after not less than 5 days 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 that are exigent in nature.
Rulemaking— Not later than the end of the 180-day period beginning on the date of enactment of this Act, the Board shall issue rules to set forth those exigent circumstances in which the Board may act under this paragraph.
Limitations— If 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 stablecoin issuer, the Board may impose such restrictions as the Board determines to be necessary to address such risk. Such restrictions 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—
the payment of dividends by the State qualified payment stablecoin issuer;
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
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.
Review of directive—
Administrative review—
In general— After a directive described in subparagraph (C) is issued, the State qualified payment stablecoin issuer, or any affiliate 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.
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.
Judicial review—
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.
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).
Comptroller—
In general— Subject to subparagraph (C), in exigent circumstances, the Comptroller shall, after not less than 5 days prior written notice to the applicable State payment stablecoin regulator, take an enforcement action against a Comptroller-regulated entity or an institution-affiliated party of such entity for violations of this Act.
Rulemaking— Not later than the end of the 180-day period beginning on the date of enactment of this Act, the Comptroller shall issue rules to set forth those exigent circumstances in which the Comptroller may act under this paragraph.
Limitations— If the Comptroller determines that there is reasonable cause to believe that the continuation by a Comptroller-regulated entity of any activity constitutes a serious risk to the financial safety, soundness, or stability of the stablecoin issuer, the Comptroller shall impose such restrictions as the Comptroller determines to be necessary to address such risk. Such restrictions 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—
the payment of dividends by the Comptroller-regulated entity;
transactions between the Comptroller-regulated entity, a holding company, and the subsidiaries or affiliates of either the Comptroller-regulated entity or the holding company; and
any activities of the Comptroller-regulated entity 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 Comptroller-regulated entity.
Review of directive—
Administrative review—
In general— After a directive described in subparagraph (C) is issued, the Comptroller-regulated entity, or any affiliate of the Comptroller-regulated entity subject to the directive, may object and present to the Comptroller, in writing, the reasons why the directive should be modified or rescinded.
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.
Judicial review—
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.
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).
Gramm-Leach-Bliley Act— For purposes of title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.) a State qualified payment stablecoin issuer is deemed a financial institution.
Effect on State law—
Host State Law— The consumer protection laws that generally apply to the operation of a payment stablecoin issuer of the Host State apply to the activities conducted in the Host State by an out-of-State State qualified payment stablecoin issuer to the same extent as those requirements apply to the activities conducted in the Host State by an out-of-State Federal qualified nonbank payment stablecoin issuer.
Home State Law— If any Host State law is determined not to apply under paragraph (1), the laws of the Home State of the payment stablecoin issuer shall govern the activities of the payment stablecoin issuer conducted in the Host State.
Sec. 8 Customer protection
In general— A person may only engage in the business of providing custodial or safekeeping services for permitted payment stablecoins or private keys of permitted payment stablecoins, if the person—
is subject to—
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
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, 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
complies with the segregation requirements under subsection (b), unless such person complies with similar requirements as required by a primary Federal payment stablecoin regulator, the Securities and Exchange Commission, or the Commodity Futures Trading Commission.
Segregation requirement— A person described in subsection (a) shall—
treat and deal with the payment stablecoins, private keys, cash, and other property of a person for whom or on whose behalf the person receives, acquires, or holds payment stablecoins, private keys, cash, and other property (hereinafter in this section referred to as the “customer”) as belonging to such customer; and
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.
Commingling prohibited—
In general— Payment stablecoins, cash, and other property of a customer shall be separately accounted for by a person described in subsection (a) and shall not be commingled with the funds of the person.
Exception— Notwithstanding paragraph (1)—
the payment stablecoins, cash, and other property of a customer may, for convenience, be commingled and deposited in an omnibus account holding the payment stablecoins, cash, and other property of more than 1 customer at an insured depository institution or trust company;
such share of the payment stablecoins, cash, and other property of the 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); and
in accordance with such terms and conditions as the Board may prescribe by rule, regulation, or order, any customer payment stablecoin, cash, and other property described in this subsection may be commingled and deposited in customer accounts with payment stablecoins, cash, and other property received by the person and required by the Board to be separately accounted for, treated, and dealt with as belonging to customers.
Regulatory information— A person described under subsection (a) shall submit to the applicable primary 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.
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. 9 Treatment of insolvent payment stablecoin issuers
In general— In any insolvency proceeding, including any proceeding under title 11, United States Code, or any insolvency proceeding by a primary Federal payment stablecoin regulator or a State banking supervisor with respect to a payment stablecoin issuer, the claim of a person holding payment stablecoins issued by the payment stablecoin issuer shall have priority over all other claims against the payment stablecoin issuer.
in subsection (a), by striking “The following” and inserting “Subject to subsection (e), the following”; and
by adding at the end the following:
“(e) Notwithstanding subsection (a), any claim of a person holding payment stablecoins, as defined in section 2 of the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025, issued by a debtor shall have first priority over any other claim against the debtor under this title.”
Debtor— A payment stablecoin issuer that is not a depository institution (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) may be considered a debtor under title 11, United States Code.
Sec. 10 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 governments, shall assess and, if necessary, may, pursuant to section 553 of title 5 and in a manner consistent with the National Technology Transfer and Advancement Act of 1995 (Public Law 104–113), prescribe standards for payment stablecoin issuers to promote compatibility and interoperability.
Sec. 11 Study on endogenously collateralized stablecoins
Study by Treasury—
Study— The Secretary of the Treasury, in consultation with the Board, the Comptroller, the Corporation, and the Securities and Exchange Commission, shall carry out a study of endogenously collateralized stablecoins.
Report— Not later than 365 days after the date of the enactment of this Act, the Secretary shall provide to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report that contains all findings made in carrying out the study under paragraph (1), including an analysis of—
the categories of non-payment stablecoins, including the benefits and risks of technological design features;
the participants in non-payment stablecoin arrangements;
utilization and potential utilization of non-payment stablecoins;
nature of reserve compositions;
types of algorithms being employed;
governance structure, including aspects of decentralization;
nature of public promotion and advertising; and
clarity and availability of consumer notices disclosures.
Endogenously collateralized stablecoin defined— In this section, the term “endogenously collateralized stablecoin” means any digital asset—
in which its originator has represented will be converted, redeemed, or repurchased for a fixed amount of monetary value; and
that relies solely on the value of another digital asset created or maintained by the same originator to maintain the fixed price.
Sec. 12 Reports
Rulemaking status— Not later than 6 months after the date of enactment of this Act, the primary Federal payment stablecoin regulators shall provide a status update on the development of the rulemaking under this Act to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.
Annual reporting requirement— Beginning on the date that is 1 year after the date of enactment of this Act, and annually thereafter, the Board and Comptroller 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 on the status of the payment stablecoin industry, including—
an overview of trends in payment stablecoin activities;
a summary of the number of applications for permitted payment stablecoin issuer under section 5, including aggregate approvals and rejections of applications; and
a description of the potential financial stability risks posed to the safety and soundness of the broader financial system by payment stablecoin activities.
FSOC report— The Financial Stability Oversight Council shall incorporate the findings in the report under subsection (b) into the annual report of the Council required under section 112(a)(2)(N) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5322).
Sec. 13 Authority of banking institutions
Rule of construction— Nothing in this Act may be construed to limit the authority of a depository institution, Federal credit union, State credit union, or trust company to engage in activities permissible pursuant to applicable State and Federal law, including—
accepting or receiving deposits and issuing digital assets that represent deposits;
utilizing a distributed ledger for the books and records of the entity and to affect intrabank transfers; and
providing custodial services for payment stablecoins, private keys of payment stablecoins, or reserves backing payment stablecoins.
Treatment of custody activities— The appropriate Federal banking agency (as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)), 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—
to include assets held in custody as a liability on any financial statement or balance sheet, including payment stablecoin custody or safekeeping activities;
to hold additional regulatory capital against assets in custody or safekeeping, except as necessary to mitigate against operational risks inherent with the custody or safekeeping services, as determined by—
the appropriate Federal banking agency;
the National Credit Union Administration (in the case of a credit union);
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);
to recognize a liability for any obligations related to activities or services performed for digital assets that the entity does not own if that liability would exceed the expense recognized in the income statement as a result of the corresponding obligation.
Definitions— In this section:
Depository institution— The term “depository institution” has the meaning given that term under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
Credit union terms— The terms “Federal credit union” and “State credit union” have the meaning given those terms, respectively, under section 101 of the Federal Credit Union Act.
Sec. 14 Amendments to clarify that payment stablecoins are not securities or commodities
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, respectively, in section 2 of the Clarity for Payment Stablecoins Act of 2023.”.
Investment Company Act of 1940— Section 2(a)(36) of the Investment Company Act of 1940 (15 U.S.C. 80a–2(a)(36)) 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, respectively, in section 2 of the Clarity for Payment Stablecoins Act of 2023.”.
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, respectively, in section 2 of the Clarity for Payment Stablecoins Act of 2023.”.
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, respectively, in section 2 of the Clarity for Payment Stablecoins Act of 2023.”.
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, respectively, in section 2 of the Clarity for Payment Stablecoins Act of 2023.”.
Sec. 15 Reciprocity for stablecoins issued in overseas jurisdictions
The Federal Reserve, in collaboration with the Secretary of the Treasury, shall create and implement reciprocal arrangements or other bilateral agreements between the United States and jurisdictions with substantially similar payment stablecoin regulatory regimes to facilitate international transactions and interoperability with United States dollar-denominated stablecoins issued overseas.
Sec. 16 Effective date
In general— This Act shall take effect on the earlier of—
18 months after the date of enactment of this Act; or
the date that is 120 days after the date on which the primary Federal payment stablecoin regulators issue any final regulations implementing this Act.
Notice to Congress— The primary Federal payment stablecoin regulators shall notify Congress upon beginning to process applications under this Act.
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 described under subsection (a), with respect to—
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
a nonbank entity with an application pending to become a Comptroller-regulated entity on that effective date.