---
kind: "section"
citation: "12 U.S.C. § 5907"
title: "12"
title_heading: "Banks and Banking"
number: "5907"
heading: "Anti-money laundering protections"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/5907"
units:
  - "Chapter 56 — Regulation of Payment Stablecoins"
---

# §5907. Anti-money laundering protections

- (a) **Payment stablecoins issued by a foreign payment stablecoin issuer—**
  - (1) **In general—** A [payment stablecoin](/usc/12/5901.md?p=22) that is issued by a [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) may not be publicly offered, sold, or otherwise made available for trading in the United States by a [digital asset service provider](/usc/12/5901.md?p=7) unless the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) has the technological capability to comply and complies with the terms of any [lawful order](/usc/12/5901.md?p=16).
  - (2) **Enforcement—**
    - (A) **Authority—** The [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury shall have the authority to designate any foreign issuer that publicly [offers](/usc/12/5901.md?p=21), sells, or otherwise makes available a [payment stablecoin](/usc/12/5901.md?p=22) in violation of [paragraph (1)](#a-1) as noncompliant.
    - (B) **Designation as noncompliant—** Not later than 30 days after the Department of the Treasury has identified a [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) of any [payment stablecoin](/usc/12/5901.md?p=22) trading in the United States that is in violation of [paragraph (1)](#a-1), the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury, in coordination with relevant Federal agencies, may, pursuant to the authority under [subparagraph (A)](#a-2-A), designate the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) as noncompliant and notify the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) in writing of the designation.
  - (3) **Appeal—** A determination of noncompliance under this subsection is subject to judicial review in the United States Court of Appeals for the District of Columbia Circuit.
- (b) **Publication of designation; prohibition on secondary trading—**
  - (1) **In general—** If a [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) does not come into compliance with the [lawful order](/usc/12/5901.md?p=16) within 30 days from the date of issuance of the written notice described in [subsection (a)](#a), except as provided in [subsection (c)](#c), the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury shall—
    - (A) publish the determination of noncompliance in the Federal Register, including a statement on the failure of the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) to comply with the [lawful order](/usc/12/5901.md?p=16) after the written notice; and
    - (B) issue a notification in the Federal Register prohibiting [digital asset service providers](/usc/12/5901.md?p=7) from facilitating secondary trading of [payment stablecoins](/usc/12/5901.md?p=22) issued by the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) in the United States.
  - (2) **Effective date of prohibition—** The prohibition on facilitation of secondary trading described in [paragraph (1)](#b-1) shall become effective on the date that is 30 days after the date of issue of notification of the prohibition in the Federal Register.
  - (3) **Expiration of prohibition—**
    - (A) **In general—** The prohibition on facilitation of secondary trading described in [paragraph (1)(B)](#b-1-B) shall expire upon the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury’s determination that the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) is no longer noncompliant.
    - (B) **Rulemaking—** Consistent with [section 5913 of this title](/usc/12/5913.md), the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury shall specify the criteria that a noncompliant foreign issuer must meet for the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury to determine that the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) is no longer noncompliant.
    - (C) **Publication—** Upon a determination under [subparagraph (A)](#b-3-A), the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury shall publish the determination in the Federal Register, including a statement detailing how the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) has met the criteria described in [subparagraph (B)](#b-3-B).
  - (4) **Civil monetary penalties—** The [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury may impose a civil monetary penalty as follows:
    - (A) **Digital asset service providers—** Any [digital asset service provider](/usc/12/5901.md?p=7) that knowingly violates a prohibition under [paragraph (1)(B)](#b-1-B) shall be subject to a civil monetary penalty of not more than $100,000 per violation per day.
    - (B) **Foreign payment stablecoin issuers—** Any [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) that knowingly continues to publicly [offer](/usc/12/5901.md?p=21) a [payment stablecoin](/usc/12/5901.md?p=22) in the United States after publication of the determination of noncompliance under [paragraph (1)(A)](#b-1-A) shall be subject to a civil monetary penalty of not more than $1,000,000 per violation per day, and the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury may seek an injunction in a district court of the United States to bar the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) from engaging in financial transactions in the United States or with United States [persons](/usc/12/5901.md?p=24).
    - (C) **Determination of the number of violations—** For purposes of determining the number of violations for which to impose a penalty under subparagraph [(A)](#b-4-A) or [(B)](#b-4-B), separate acts of noncompliance are a single violation when the acts are the result of a common or substantially overlapping originating cause. Notwithstanding the foregoing, the [Secretary](/usc/12/1715z–22a.md?p=4) of Treasury may determine that multiple acts of noncompliance constitute separate violations if such acts were the result of gross negligence, a reckless disregard for, or a pattern of indifference to, [money](/usc/12/5901.md?p=18) laundering, financing of terrorism, or sanctions evasion requirements.
    - (D) **Commencement of civil actions—** The [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury may commence a civil action against a [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) in a district court of the United States to—
      - (i) recover a civil monetary penalty assessed under subparagraph [(A)](#b-4-A) or [(B)](#b-4-B);
      - (ii) seek an injunction to bar the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) from engaging in financial transactions in the United States or with United States [persons](/usc/12/5901.md?p=24); or
      - (iii) seek an injunction to stop a [digital asset service provider](/usc/12/5901.md?p=7) from offering on the platform of the [digital asset service provider](/usc/12/5901.md?p=7) [payment stablecoins](/usc/12/5901.md?p=22) issued by the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12).
- (c) **Waiver and licensing authority exemptions—**
  - (1) **In general—** The [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury may [offer](/usc/12/5901.md?p=21) a waiver, general license, or specific license to any United States [person](/usc/12/5901.md?p=24) engaging in secondary trading described in [subsection (b)(1)(B)](#b-1-B) on a case-by-case basis if the [Secretary](/usc/12/1715z–22a.md?p=4) determines that—
    - (A) prohibiting secondary trading would adversely affect the financial system of the United States; or
    - (B) the [foreign payment stablecoin issuer](/usc/12/5901.md?p=12) is taking tangible steps to remedy the failure to comply with the [lawful order](/usc/12/5901.md?p=16) that resulted in the noncompliance determination under [subsection (a)](#a).
  - (2) **National security waiver—** The [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury, in consultation with the [Director](/usc/12/5481.md?p=10) of National Intelligence and the Secretary of State, may waive the application of the secondary trading restrictions under [subsection (b)(1)(B)](#b-1-B) if the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury determines that the waiver is in the national security interest of the United States.
  - (3) **Waiver for intelligence and law enforcement activities—** The head of a department or agency may waive the application of this section with respect to—
    - (A) activities subject to the reporting requirements under title V of the National Security Act of 1947 ([50 U.S.C. 3091](/usc/50/3091.md) et seq.), or any authorized intelligence activities of the United States; or
    - (B) activities necessary to carry out or assist law enforcement activity of the United States.
  - (4) **Report required—** Not later than 7 days after issuing a waiver or a license under paragraph [(1)](#c-1), [(2)](#c-2), or [(3)](#c-3), the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury shall submit to the chairs and ranking members of the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, a report, which may include a classified annex, if applicable, 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.
- (d) **Rule of construction—** Nothing in this chapter shall be construed as altering the existing authority of the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury to block, restrict, or limit transactions involving [payment stablecoins](/usc/12/5901.md?p=22) that reference or are denominated in United States dollars that are subject to the jurisdiction of the United States.

## Source credit

(Pub. L. 119–27, § 8, July 18, 2025, 139 Stat. 450.)

## Notes

### Delayed Effective Date of Section

For delayed effective date of section, see Effective Date note below.

### Editorial Notes

### References in Text

The National Security Act of 1947, referred to in subsec. (c)(3)(A), is act July 26, 1947, ch. 343, 61 Stat. 495. Title V of the Act is classified generally to subchapter III (§ 3091 et seq.) of chapter 44 of Title 50, War and National Defense. For complete classification of this Act to the Code, see Tables.

This chapter, referred to in subsec. (d), was in the original “this Act”, meaning Pub. L. 119–27, July 18, 2025, 139 Stat. 419, known as the Guiding and Establishing National Innovation for U.S. Stablecoins Act and also as the GENIUS Act, which is classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section 5901 of this title and Tables.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective on the earlier of the date that is 18 months after July 18, 2025, or the date that is 120 days after the date on which the primary Federal payment stablecoin regulators issue any final regulations implementing Pub. L. 119–27, see section 20 of Pub. L. 119–27, set out as a note under section 5901 of this title.