S. 919 — what changed
Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025
From Introduced in Senate to Reported in Senate. 6 sections amended between Introduced in Senate and Reported in Senate.
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 Office of 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); and
any entity chartered by the Comptroller.
Corporation— The term Corporation means the Federal Deposit Insurance Corporation.
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Digital asset— The term digital asset means any digital representation of value which is recorded on a cryptographically secured cryptographically-secured distributed ledger.
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.
Federal qualified nonbank payment stablecoin issuer— The term Federal qualified nonbank payment stablecoin issuer means a nonbank entity, other than a State qualified payment stablecoin issuer, approved by the Comptroller, 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 controlling stockholder of 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 in section 3 of the Federal Deposit Insurance Act) denominated in a national currency.
Money— The term money means any financial instrument that is—
legal tender;
required to be received by a taxing authority in satisfaction of tax obligations; or
widely accepted in an economy for the payment of goods or services.
National currency— The term national currency means each of the following:
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 standing to the credit of an account with a Federal Reserve Bank.
Money issued by a foreign central bank.
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 a depository institution or subsidiary of a 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, not including a digital asset denominated in a fixed amount of monetary value;
represents that such issuer 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; or
has complied with the authorization requirements of this Act; and
that—
is not a national currency;
is not a deposit (as defined in section 3 of the Federal Deposit Insurance Act), including a deposit recorded using distributed ledger technology;
does not offer a payment of yield or interest; and
is not 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), other than a bond, note, evidence of indebtedness, or investment contract satisfying the conditions described in subparagraph (A).
Permitted payment stablecoin issuer— The term permitted payment stablecoin issuer means a person incorporated in the United States that is—
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, trust, estate, cooperative organization, or other business entity, incorporated or unincorporated.
Primary Federal payment stablecoin regulator— The term primary Federal payment stablecoin regulator means—
with respect to a subsidiary of an insured depository institution (other than an insured credit union), the appropriate Federal banking agency (as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) of such insured depository institution;
with respect to an insured credit union or a subsidiary of an insured credit union, the National Credit Union Administration;
with respect to a State chartered depository institution not specified under subparagraph (A), the Corporation, the Comptroller, or the Board; and
with respect to a Federal qualified nonbank payment stablecoin issuer or any entity chartered by the Comptroller, the Comptroller.
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 of the United 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 under the laws of a State and approved to issue payment stablecoins by a State payment stablecoin regulator.
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 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)).
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. 4 Requirements for issuing payment stablecoins
Standards for the issuance of payment stablecoins—
In general— Permitted payment stablecoin issuers shall—
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maintain reserves backing the outstanding payment stablecoins of the permitted payment stablecoin issuer on an at least a 1 to 1 basis, with reserves comprising—
United States coins and currency (including Federal reserve notes) or money standing to the credit of an account with a Federal Reserve Bank;
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 and agencies 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;
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 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;
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—
tri-party;
centrally cleared through a clearing house registered with the Securities and Exchange Commission; or
bilateral with a counterparty that the issuer has determined to be adequately creditworthy even in the event of severe market stress;
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)) that operates as a money market fund in compliance with rule 2a–7 issued under that Act (or any successor rule) and that are invested solely in underlying assets described in clauses (i) through (iv) of subparagraph (A);
any other similarly liquid 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
any reserve described in clauses (i) through (vii) in tokenized form, provided that such reserves comply with all applicable laws and regulations;
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 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—
satisfying margin obligations in connection with investments in permitted reserves under clauses (iv) and (v) of paragraph (1)(A);
satisfying obligations associated with the use or receipt of provision of standard custodial services; or
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—
the repurchase agreements are cleared by a clearing agency registered with the Securities and Exchange Commission; or
the permitted payment stablecoin issuer receives the prior approval of its primary Federal payment stablecoin regulator or State payment stablecoin regulator, as applicable.
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, as applicable—
the primary Federal payment stablecoin regulator of the permitted payment stablecoin issuer; or
the State payment stablecoin regulator of the permitted payment stablecoin issuer.
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, consistent with section 18, issue—
capital requirements applicable to permitted payment stablecoin issuers that—
are tailored to the business model and risk profile of permitted payment stablecoin issuers;
do not exceed requirements which are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers; and
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;
regulations implementing the liquidity standard under clause (i);
reserve asset diversification and interest rate risk management standards applicable to permitted payment stablecoin issuers that—
are tailored to the business model and risk profile of permitted payment stablecoin issuers; and
do not exceed standards which are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers; and
appropriate operational, compliance, and information technology risk management standards, including Bank Secrecy Act and sanctions compliance, that—
are tailored to the business model and risk profile of permitted payment stablecoin issuers; and
are consistent with applicable law.
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 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 the primary Federal 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
the supervisory, regulatory, or enforcement authority of a Federal banking agency to further the safe and sound operation of an institution for which the Federal banking agency is the appropriate Federal banking agency (as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)).
Applicability of existing capital standards—
Definitions— In this subparagraph—
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appropriate Federal banking agency has the meaning given that term in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)); 1813(q); and
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)).
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.
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 promulgated pursuant to paragraph (1)(A)(i).
Modifications— Not later than the earlier of the rulemaking deadline under section 18 or the date 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 Federal banking agency described in clause (iii) so that such regulation, as amended or otherwise modified, complies with clause (iii) of this subparagraph.
Treatment under the Bank Secrecy Act and sanctions laws—
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—
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;
retention of appropriate records of payment stablecoin transactions;
monitoring and reporting suspicious activity;
policies and procedures to block, freeze, and reject specific or impermissible transactions that violate Federal or State laws, rules, or regulations; and
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.
Rulemaking— The Financial Crimes Enforcement Network shall adopt rules, tailored to the size and complexity of the permitted payment stablecoin issuer, to implement subparagraph (A).
Coordination with permitted payment stablecoin issuers with respect to blocking of property and technological capabilities to comply with lawful orders—
In general— The Secretary of the Treasury—
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 digital asset of the foreign person upon issue of the digital asset; and
is not required to notify any permitted payment stablecoin issuer of any intended action described in clause (i) prior to taking such action.
Compliance with lawful orders—
In general—
Permitted payment stablecoin issuers— 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.
Foreign payment stablecoins— A foreign payment stablecoin that is not licensed under this Act may not be publicly offered, sold, or otherwise made available for trading in the United States unless the payment stablecoin issuer has the technological capability to comply and will comply with the terms of any lawful order.
Lawful order defined— In this paragraph, 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—
requires the permitted payment stablecoin issuer to seize, freeze, burn, or prevent the transfer of payment stablecoins issued by the permitted payment stablecoin issuer;
specifies the digital assets or accounts subject to blocking with reasonable particularity; and
is subject to judicial or administrative review or appeal as provided by law.
Report required— Not later than 1 year after the date of enactment of this Act, 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 on the coordination with permitted payment stablecoin issuers required under subparagraph (A).
Limitation on payment stablecoin activities—
In general— A permitted payment stablecoin issuer may only—
issue payment stablecoins;
redeem payment stablecoins;
manage related reserves, including purchasing, selling, and holding reserve assets or providing custodial services for reserve assets, consistent with State and Federal law;
provide custodial or safekeeping services for payment stablecoins, required reserves, or private keys of payment stablecoins, consistent with this Act; and
undertake other activities that directly support any of the activities described in clauses (i) through (iv).
Rule of construction— Nothing in subparagraph (A) shall prevent a permitted payment stablecoin issuer from engaging in non-payment stablecoin activities that are allowed by the primary Federal payment stablecoin regulator or the State payment stablecoin regulator, as applicable.
Prohibition on tying—
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.
Regulations— The Board may issue such regulations as are necessary to carry out this subparagraph, and, in consultation with the Comptroller and the Corporation, may by regulation or order, permit such exceptions to clause (i) as the Board considers will not be contrary to the purpose of this Act.
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 primary Federal payment stablecoin regulators and State payment stablecoin regulators, to issue such regulations and orders as necessary to ensure financial stability and implement this subsection.
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 and consistent with section 18 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025, issue such regulations and orders as necessary to ensure financial stability and implement section 4(a) of that Act.”
Audits and reports—
Annual financial statement—
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 sections 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.
Auditor— A registered public accounting firm shall perform an audit of the annual financial statements described in clause (i).
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.
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.
Public disclosure and submission to Federal regulators— Each permitted payment stablecoin issuer required to prepare an audited annual financial statement under subparagraph (A) shall:
make such audited financial statements publicly available on the website of the permitted payment stablecoin issuer; and
submit such audited financial statements annually to their primary Federal payment stablecoin regulator.
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.
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State-Level State-level regulatory regimes—
Option for State-level regulatory regime— Notwithstanding the Federal regulatory framework established under subsection (a), 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.
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 subsection (a).
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).
Certification—
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 Secretary of the Treasury an initial certification that the State-level regulatory regime meets the criteria for substantial similarity established pursuant to 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 established pursuant to paragraph (2).
Annual recertification— Not later than a date to be determined by the Secretary each year, a State payment stablecoin regulator 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—
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In general— If a State payment stablecoin regulator determines that the criteria established under paragraph (2) are not met meet and the State payment stablecoin regulator does not submit a certification under paragraph (4), then a permitted payment stablecoin issuer operating under this subsection shall be subject to the Federal regulatory framework as described in subsection (c), notwithstanding the total issuance threshold therein.
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Treasury review— Not later than 30 days after the date of receipt of a certification under paragraph (4), the Secretary may reject the certification if the Secretary determines that the State-level regulatory regime is not substantially similar to the Federal regulatory framework under subsection (a), and the permitted payment stablecoin issuer shall be subject to the Federal regulatory framework as described in subsection (c), notwithstanding the total issuance threshold therein.
Appellate review— A State payment stablecoin regulator may challenge the determination of the Secretary of the Treasury under this paragraph in the United States Court of Appeals for the District of Columbia Circuit.
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).
Transition to Federal oversight—
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—
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
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.
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—
not later than 360 days after the payment stablecoin reaches such threshold, transition to the Federal regulatory framework under subsection (a) administered by the State payment stablecoin regulator of the State qualified payment stablecoin issuer; or
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.
Waiver—
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.
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:
The capital maintained by the State qualified payment stablecoin issuer.
The past operations and examination history of the State qualified payment stablecoin issuer.
The experience of the State payment stablecoin regulator in supervising payment stablecoin and digital asset activities.
The laws and rules applicable to, and the supervisory framework of, the State qualified payment stablecoin issuer with respect to payment stablecoins and digital assets.
Rule of construction— 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 along 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.
Misrepresentation of insured status; marketing—
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.
Misrepresentation of insured status—
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.
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.
Marketing— It shall be unlawful to market a digital asset in the United States as a payment stablecoin unless the digital asset is issued pursuant to this Act.
Officers or directors convicted of certain felonies—
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—
an officer of a payment stablecoin issuer; or
a director of a payment stablecoin issuer.
Penalty—
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.
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.
Rulemaking—
In general— Consistent with section 18, the primary Federal payment stablecoin regulators and State payment stablecoin regulators shall issue such regulations 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 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.
Sec. 5 Approval of subsidiaries of insured depository institutions and Federal qualified nonbank payment stablecoin issuers
Application—
In general— Each primary Federal payment stablecoin regulator shall 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 that seeks to issue payment stablecoins as a Federal qualified nonbank payment stablecoin issuer. Each primary Federal payment stablecoin regulator shall establish a process and framework for the licensing, regulation, examination, and supervision of such entities that prioritizes the safety and soundness of such entities.
Authority to issue regulations and process applications— The primary Federal payment stablecoin regulators shall, before the date described in section 18—
issue regulations consistent with that section 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 substantially complete application, evaluate and make a determination on each application based on the criteria established under this Act.
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).
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Factors To to be considered— The factors described in this subsection are the following:
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.
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.
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.
Timing for decision; grounds for denial—
Timing for decisions on applications—
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.
Substantially complete—
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 criteria under subsection (c).
Notification— Not later than 30 days after receiving an application under subsection (a), a primary Federal payment stablecoin regulator shall notify the applicant 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 must provide in order for the application to be considered substantially complete.
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.
Denial of application—
Grounds for denial—
In general— 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).
Issuance 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.
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.
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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.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 a final determination, 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 primary Federal payment stablecoin regulators shall annually report to Congress on the applications under subsection (a) 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.
Rulemaking— Consistent with section 18, the primary Federal payment stablecoin regulators shall 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.
Sec. 6 Supervision and enforcement with respect to subsidiaries of insured depository institutions and Comptroller-regulated entities
Supervision—
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.
Submission of reports— Each permitted payment stablecoin issuer described in paragraph (1) shall, upon request, submit to its primary Federal payment stablecoin regulator a report on—
the financial condition of the permitted payment stablecoin issuer;
the systems of the permitted payment stablecoin issuer for monitoring and controlling financial and operating risks; and
compliance by the permitted payment stablecoin issuer (and any subsidiary thereof) with this Act.
Examinations— The primary Federal payment stablecoin regulator shall examine a permitted payment stablecoin issuer described in paragraph (1) in order to assess—
the nature of the operations and financial condition of the permitted payment stablecoin issuer;
the financial, operational, technological, and other risks within the permitted payment stablecoin issuer that may pose a threat to—
the safety and soundness of the permitted payment stablecoin issuer; or
the stability of the financial system of the United States; and
the systems of the permitted payment stablecoin issuer for monitoring and controlling the risks described in subparagraph (B).
Requirements for efficiency—
Use of existing reports— In supervising and examining a permitted payment stablecoin issuer under this subsection, the primary Federal payment stablecoin regulator shall, to the fullest extent possible, use existing reports and other supervisory information.
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.
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 those required for similarly situated entities regulated by the primary Federal payment stablecoin regulator.
Enforcement—
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 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 recklessly violating or has recklessly violated this Act or any regulation or order issued under this Act; or
is recklessly violating or has recklessly 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.
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Cease and desist 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 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—
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 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 their position or office or prohibit further participation in the affairs of the permitted payment stablecoin issuer or all such permitted payment stablecoin issuers by such institution-affiliated party, if the primary Federal payment stablecoin regulator determines that—
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
the institution-affiliated party has knowingly committed a violation of any provision of subchapter II of chapter 53 of title 31, United States Code.
Procedures—
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 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.
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Temporary cease and desist 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 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)) to issue a temporary cease and desist cease-and-desist order.
Civil money penalties—
Failure to be approved— Any person who 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.
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— Notwithstanding anything in this subsection to the contrary, 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 all State qualified payment stablecoin issuers 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 participate in the supervision, examination, and enforcement of this Act 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.
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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 unusual and exigent circumstances—
Board—
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.
Rulemaking— Consistent with section 18, the Board shall issue rules to set forth the unusual and exigent circumstances in which the Board may act under this paragraph.
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 usual and exigent circumstances. 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 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.
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), 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.
Rulemaking— Consistent with section 18, the Comptroller shall issue rules to set forth the unusual and exigent circumstances in which the Comptroller may act under this paragraph.
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 by a State qualified payment stablecoin issuer that is a nonbank entity of any activity 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. 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 that is a nonbank entity 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 Comptroller-regulated entity, or any institution-affiliated party 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).
Effect on State law—
Host State Law— The laws of a host State, including generally applicable 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 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 State qualified payment stablecoin issuer shall govern the activities of the permitted payment stablecoin issuer conducted in the host State.
Applicability— The laws applicable 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.
Sec. 8 Anti-money laundering protections
Definitions— In this subsection:
Digital asset service provider— The term digital asset service provider—
means a person that, for compensation or profit, engages in the business in the United States or for customers or users in the United States, of—
exchanging digital assets for monetary value;
exchanging digital assets for other digital assets;
transferring digital assets to a third party;
acting as a digital asset custodian; or
participating in financial services related to a digital asset issuance; and
does not include—
a distributed ledger protocol or a person solely developing such a protocol; or
a person solely validating transactions or operating a distributed ledger node.
Offering— The term offering means making available for purchase, sale, or exchange.
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.
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—
requires a permitted payment stablecoin issuer to seize, freeze, burn, or prevent the transfer of payment stablecoins issued by the permitted payment stablecoin issuer;
specifies the digital assets or accounts subject to blocking with reasonable particularity; and
is subject to judicial or administrative review or appeal as provided by law.
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Treasury authority To to designate noncompliant issuers— Not later than 30 days after the Department of the Treasury has identified the failure of a foreign issuer of any payment stablecoins trading in the United States that is not a permitted payment stablecoin issuer to comply with the terms of any lawful order, the Secretary of the Treasury, in coordination with relevant Federal agencies, shall designate the foreign issuer as noncompliant and notify the foreign issuer in writing of the designation.
Publication of designation; prohibition on secondary trading—
In general— If a foreign issuer described in subsection (b) does not come into compliance with the lawful order within 30 days of receiving the written notice described in that subsection, the Secretary of the Treasury shall—
publish the determination of noncompliance in the Federal Register, including a statement on the failure of the foreign issuer to comply with the lawful order after the written notice; and
issue a notification in the Federal Register prohibiting digital asset service providers from facilitating secondary trading of payment stablecoins issued by the foreign issuer in the United States.
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.
Waivers and extensions— With respect to the prohibition on facilitation of secondary trading described in paragraph (1), the Secretary of the Treasury may issue waivers and time extensions to digital asset service providers on a case by case basis.
Civil monetary penalties—
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.
Foreign payment stablecoin issuers— Any foreign issuer of payment stablecoin 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 United States District Court to bar the foreign issuer from engaging in financial transactions in the United States or with United States persons.
Appeal— A determination of noncompliance under subsection (b) is subject to judicial review in the United States Court of Appeals for the District of Columbia Circuit.
Waiver, licensing authority, and exceptions—
In general— The Secretary of the Treasury may offer a waiver, general license, or specific license to any United States persons engaging in secondary trading described in subsection (c) on a case by case basis if the Secretary determines that—
prohibiting secondary trading would adversely affect the financial system of the United States; or
the foreign issuer of the payment stablecoin is taking tangible steps to remedy the failure to comply with the lawful order that resulted in the noncompliance determination under subsection (b).
National security waiver— The President may waive the application of the secondary trading restrictions under subsection (c) if the President determines that the waiver is in the national security interest of the United States.
Exceptions for intelligence and law enforcement activities— This Act shall not apply with respect to—
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
activities necessary to carry out or assist law enforcement activity of the United States.
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 Chairmen 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.