S. 1582

[119th Congress Public Law 27]
[From the U.S. Government Publishing Office]

[[Page 139 STAT. 419]]

Public Law 119-27
119th Congress

An Act

To provide for the regulation of payment stablecoins, and for other 
purposes. <<NOTE: July 18, 2025 - [S. 1582]>> 

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Guiding and 
Establishing National Innovation for U.S. Stablecoins Act.>> 
SECTION 1. <<NOTE: 12 USC 5901 note.>> SHORT TITLE.

This Act may be cited as the ``Guiding and Establishing National 
Innovation for U.S. Stablecoins Act'' or the ``GENIUS Act''.
SEC. 2. <<NOTE: 12 USC 5901.>> DEFINITIONS.

In this Act:
(1) Appropriate federal banking agency.--The term 
``appropriate Federal banking agency'' has the meaning given 
that term in section 3 of the Federal Deposit Insurance Act (12 
U.S.C. 1813).
(2) Bank secrecy act.--The term ``Bank Secrecy Act'' means--
(A) section 21 of the Federal Deposit Insurance Act 
(12 U.S.C. 1829b);
(B) chapter 2 of title I of Public Law 91-508 (12 
U.S.C. 1951 et seq.); and
(C) subchapter II of chapter 53 of title 31, United 
States Code.
(3) Board.--The term ``Board'' means the Board of Governors 
of the Federal Reserve System.
(4) Comptroller.--The term ``Comptroller'' means the Office 
of the Comptroller of the Currency.
(5) Corporation.--The term ``Corporation'' means the Federal 
Deposit Insurance Corporation.
(6) Digital asset.--The term ``digital asset'' means any 
digital representation of value that is recorded on a 
cryptographically secured distributed ledger.
(7) Digital asset service provider.--The term ``digital 
asset service provider''--
(A) means a person that, for compensation or profit, 
engages in the business in the United States (including 
on behalf of customers or users in the United States) 
of--
(i) exchanging digital assets for monetary 
value;
(ii) exchanging digital assets for other 
digital assets;
(iii) transferring digital assets to a third 
party;
(iv) acting as a digital asset custodian; or
(v) participating in financial services 
relating to digital asset issuance; and

[[Page 139 STAT. 420]]

(B) does not include--
(i) a distributed ledger protocol;
(ii) developing, operating, or engaging in the 
business of developing distributed ledger 
protocols or self-custodial software interfaces;
(iii) an immutable and self-custodial software 
interface;
(iv) developing, operating, or engaging in the 
business of validating transactions or operating a 
distributed ledger; or
(v) participating in a liquidity pool or other 
similar mechanism for the provisioning of 
liquidity for peer-to-peer transactions.
(8) Distributed ledger.--The term ``distributed ledger'' 
means technology in which data is shared across a network that 
creates a public digital ledger of verified transactions or 
information among network participants and cryptography is used 
to link the data to maintain the integrity of the public ledger 
and execute other functions.
(9) Distributed ledger protocol.--The term ``distributed 
ledger protocol'' means publicly available and accessible 
executable software deployed to a distributed ledger, including 
smart contracts or networks of smart contracts.
(10) Federal branch.--The term ``Federal branch'' has the 
meaning given that term in section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813).
(11) Federal qualified payment stablecoin issuer.--The term 
``Federal qualified payment stablecoin issuer'' means--
(A) a nonbank entity, other than a State qualified 
payment stablecoin issuer, approved by the Comptroller, 
pursuant to section 5, to issue payment stablecoins;
(B) an uninsured national bank--
(i) that is chartered by the Comptroller, 
pursuant to title LXII of the Revised Statutes; 
and
(ii) that is approved by the Comptroller, 
pursuant to section 5, to issue payment 
stablecoins; and
(C) a Federal branch that is approved by the 
Comptroller, pursuant to section 5, to issue payment 
stablecoins.
(12) Foreign payment stablecoin issuer.--The term ``foreign 
payment stablecoin issuer'' means an issuer of a payment 
stablecoin that is--
(A) organized under the laws of or domiciled in a 
foreign country, a territory of the United States, 
Puerto Rico, Guam, American Samoa, or the Virgin 
Islands; and
(B) not a permitted payment stablecoin issuer.
(13) Institution-affiliated party.--With respect to a 
permitted payment stablecoin issuer, the term ``institution-
affiliated party'' means any director, officer, employee, or 
controlling stockholder of the permitted payment stablecoin 
issuer.
(14) Insured credit union.--The term ``insured credit 
union'' has the meaning given that term in section 101 of the 
Federal Credit Union Act (12 U.S.C. 1752).
(15) Insured depository institution.--The term ``insured 
depository institution'' means--

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(A) an insured depository institution, as defined in 
section 3 of the Federal Deposit Insurance Act (12 
U.S.C. 1813); and
(B) an insured credit union.
(16) Lawful order.--The term ``lawful order'' means any 
final and valid writ, process, order, rule, decree, command, or 
other requirement issued or promulgated under Federal law, 
issued by a court of competent jurisdiction or by an authorized 
Federal agency pursuant to its statutory authority, that--
(A) requires a person to seize, freeze, burn, or 
prevent the transfer of payment stablecoins issued by 
the person;
(B) specifies the payment stablecoins or accounts 
subject to blocking with reasonable particularity; and
(C) is subject to judicial or administrative review 
or appeal as provided by law.
(17) Monetary value.--The term ``monetary value'' means a 
national currency or deposit (as defined in section 3 of the 
Federal Deposit Insurance Act (12 U.S.C. 1813)) denominated in a 
national currency.
(18) Money.--The term ``money''--
(A) means a medium of exchange currently authorized 
or adopted by a domestic or foreign government; and
(B) includes a monetary unit of account established 
by an intergovernmental organization or by agreement 
between 2 or more countries.
(19) National currency.--The term ``national currency'' 
means each of the following:
(A) A Federal Reserve note (as the term is used in 
the first undesignated paragraph of section 16 of the 
Federal Reserve Act (12 U.S.C. 411)).
(B) Money standing to the credit of an account with 
a Federal Reserve Bank.
(C) Money issued by a foreign central bank.
(D) Money issued by an intergovernmental 
organization pursuant to an agreement by 2 or more 
governments.
(20) Nonbank entity.--The term ``nonbank entity'' means a 
person that is not a depository institution or subsidiary of a 
depository institution.
(21) Offer.--The term ``offer'' means to make available for 
purchase, sale, or exchange.
(22) Payment stablecoin.--The term ``payment stablecoin''--
(A) means a digital asset--
(i) that is, or is designed to be, used as a 
means of payment or settlement; and
(ii) the issuer of which--
(I) is obligated to convert, redeem, 
or repurchase for a fixed amount of 
monetary value, not including a digital 
asset denominated in a fixed amount of 
monetary value; and
(II) represents that such issuer 
will maintain, or create the reasonable 
expectation that it will maintain, a 
stable value relative to the value of a 
fixed amount of monetary value; and
(B) does not include a digital asset that--
(i) is a national currency;

[[Page 139 STAT. 422]]

(ii) is a deposit (as defined in section 3 of 
the Federal Deposit Insurance Act (12 U.S.C. 
1813)), including a deposit recorded using 
distributed ledger technology; or
(iii) is a security, as defined in section 2 
of the Securities Act of 1933 (15 U.S.C. 77b), 
section 3 of the Securities Exchange Act of 1934 
(15 U.S.C. 78c), or section 2 of the Investment 
Company Act of 1940 (15 U.S.C. 80a-2), except 
that, for the avoidance of doubt, no bond, note, 
evidence of indebtedness, or investment contract 
that was issued by a permitted payment stablecoin 
issuer shall qualify as a security solely by 
virtue of its satisfying the conditions described 
in subparagraph (A), consistent with section 17 of 
this Act.
(23) Permitted payment stablecoin issuer.--The term 
``permitted payment stablecoin issuer'' means a person formed in 
the United States that is--
(A) a subsidiary of an insured depository 
institution that has been approved to issue payment 
stablecoins under section 5;
(B) a Federal qualified payment stablecoin issuer; 
or
(C) a State qualified payment stablecoin issuer.
(24) Person.--The term ``person'' means an individual, 
partnership, company, corporation, association, trust, estate, 
cooperative organization, or other business entity, incorporated 
or unincorporated.
(25) Primary federal payment stablecoin regulator.--The term 
``primary Federal payment stablecoin regulator'' means--
(A) with respect to a subsidiary of an insured 
depository institution (other than an insured credit 
union), the appropriate Federal banking agency of such 
insured depository institution;
(B) with respect to an insured credit union or a 
subsidiary of an insured credit union, the National 
Credit Union Administration;
(C) with respect to a State chartered depository 
institution not specified under subparagraph (A), the 
Corporation, the Comptroller, or the Board; and
(D) with respect to a Federal qualified payment 
stablecoin issuer, the Comptroller.
(26) Registered public accounting firm.--The term 
``registered public accounting firm'' has the meaning given that 
term under section 2 of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7201).
(27) Stablecoin certification review committee.--The term 
``Stablecoin Certification Review Committee'' means the 
committee of that name and having the functions as provided in 
this Act--
(A) of which--
(i) the Secretary of the Treasury shall serve 
as Chair; and
(ii) the Chair of the Board (or the Vice Chair 
for Supervision, as delegated by the Chair of the 
Board), and the Chair of the Corporation shall 
serve as members; and

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(B) which, unless otherwise specified in this Act, 
shall act by \2/3\ vote of its members at any meeting 
called by the Chair or by unanimous written consent.
(28) 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.
(29) 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)).
(30) 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.
(31) State qualified payment stablecoin issuer.--The term 
``State qualified payment stablecoin issuer'' means an entity 
that--
(A) is legally established under the laws of a State 
and approved to issue payment stablecoins by a State 
payment stablecoin regulator; and
(B) is not an uninsured national bank chartered by 
the Comptroller pursuant to title LXII of the Revised 
Statutes, a Federal branch, an insured depository 
institution, or a subsidiary of such national bank, 
Federal branch, or insured depository institution.
(32) Subsidiary.--The term ``subsidiary'' has the meaning 
given that term in section 3 of the Federal Deposit Insurance 
Act (12 U.S.C. 1813).
(33) Subsidiary of an insured credit union.--With respect to 
an insured credit union, the term ``subsidiary of an insured 
credit union'' means--
(A) an organization providing services to the 
insured credit union that are associated with the 
routine operations of credit unions, as described in 
section 107(7)(I) of the Federal Credit Union Act (12 
U.S.C. 1757(7)(I));
(B) a credit union service organization, as such 
term is used under part 712 of title 12, Code of Federal 
Regulations, with respect to which the insured credit 
union has an ownership interest or to which the insured 
credit union has extended a loan; and
(C) a subsidiary of a State chartered insured credit 
union authorized under State law.
SEC. 3. <<NOTE: 12 USC 5902.>> ISSUANCE AND TREATMENT OF PAYMENT 
STABLECOINS.

(a) Limitation on Issuers.--It shall be unlawful for any person 
other than a permitted payment stablecoin issuer to issue a payment 
stablecoin in the United States.
(b) Prohibition on Offers or Sales.--
(1) <<NOTE: Effective date.>> In general.--Except as 
provided in subsection (c) and section 18, beginning on the date 
that is 3 years after the date of enactment of this Act, it 
shall be unlawful for a digital asset service provider to offer 
or sell a payment stablecoin to a person in the United States, 
unless the payment stablecoin is issued by a permitted payment 
stablecoin issuer.
(2) <<NOTE: Compliance.>> Foreign payment stablecoin 
issuers.--It shall be unlawful for any digital asset service 
provider to offer, sell, or otherwise make available in the 
United States a payment

[[Page 139 STAT. 424]]

stablecoin issued by a foreign payment stablecoin issuer unless 
the foreign payment stablecoin issuer has the technological 
capability to comply, and will comply, with the terms of any 
lawful order and any reciprocal arrangement pursuant to section 
18.

(c) <<NOTE: Determinations.>> Limited Safe Harbors.--
(1) In general.--The Secretary of the Treasury may issue 
regulations providing safe harbors from subsection (a) that 
are--
(A) consistent with the purposes of the Act;
(B) limited in scope; and
(C) <<NOTE: Applicability.>> apply to a de minimis 
volume of transactions, as determined by the Secretary 
of the Treasury.
(2) Unusual and exigent circumstances.--
(A) In general.--If the Secretary of the Treasury 
determines that unusual and exigent circumstances exist, 
the Secretary may provide limited safe harbors from 
subsection (a).
(B) Justification.--Prior to issuing a limited safe 
harbor under this paragraph, the Secretary of the 
Treasury shall submit to the chairs and ranking members 
of the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of 
the House of Representatives a justification for the 
determination of the unusual and exigent circumstances, 
which may be contained in a classified annex, as 
applicable.

(d) Rulemaking.--Consistent with section 13, the Secretary of the 
Treasury shall issue regulations to implement this section, including 
regulations to define terms.
(e) Extraterritorial Effect.--This section is intended to have 
extraterritorial effect if conduct involves the offer or sale of a 
payment stablecoin to a person located in the United States.
(f) Penalty for Violation.--
(1) In general.--Whoever knowingly participates in a 
violation of subsection (a) shall be fined not more than 
$1,000,000 for each such violation, imprisoned for not more than 
5 years, or both.
(2) Referral to attorney general.--If a primary Federal 
payment stablecoin regulator has reason to believe that any 
person has knowingly violated subsection (a), the primary 
Federal payment stablecoin regulator may refer the matter to the 
Attorney General.

(g) Treatment.--A payment stablecoin that is not issued by a 
permitted payment stablecoin issuer shall not be--
(1) treated as cash or as a cash equivalent for accounting 
purposes;
(2) eligible as cash or as a cash equivalent margin and 
collateral for futures commission merchants, derivative clearing 
organizations, broker-dealers, registered clearing agencies, and 
swap dealers; or
(3) acceptable as a settlement asset to facilitate wholesale 
payments between banking organizations or by a payment 
infrastructure to facilitate exchange and settlement among 
banking organizations.

(h) Rules of Construction.--
(1) Exempt transactions.--This section shall not apply to--

[[Page 139 STAT. 425]]

(A) the direct transfer of digital assets between 2 
individuals acting on their own behalf and for their own 
lawful purposes, without the involvement of an 
intermediary;
(B) to any transaction involving the receipt of 
digital assets by an individual between an account owned 
by the individual in the United States and an account 
owned by the individual abroad that are offered by the 
same parent company; or
(C) to any transaction by means of a software or 
hardware wallet that facilitates an individual's own 
custody of digital assets.
(2) Treasury authority.--Nothing in this Act shall alter the 
existing authority of the Secretary of the Treasury to block, 
restrict, or limit transactions involving payment stablecoins 
that reference or are denominated in United States dollars that 
are subject to the jurisdiction of the United States.
SEC. 4. <<NOTE: 12 USC 5903.>> REQUIREMENTS FOR ISSUING PAYMENT 
STABLECOINS.

(a) Standards for the Issuance of Payment Stablecoins.--
(1) In general.--A permitted payment stablecoin issuer 
shall--
(A) maintain identifiable reserves backing the 
outstanding payment stablecoins of the permitted payment 
stablecoin issuer on an at least 1 to 1 basis, with 
reserves comprising--
(i) United States coins and currency 
(including Federal Reserve notes) or money 
standing to the credit of an account with a 
Federal Reserve Bank;
(ii) funds held as demand deposits (or other 
deposits that may be withdrawn upon request at any 
time) or insured shares at an insured depository 
institution (including any foreign branches or 
agents, including correspondent banks, of an 
insured depository institution), subject to 
limitations established by the Corporation and the 
National Credit Union Administration, as 
applicable, to address safety and soundness risks 
of such insured depository institution;
(iii) <<NOTE: Time period.>> Treasury bills, 
notes, or bonds--
(I) with a remaining maturity of 93 
days or less; or
(II) issued with a maturity of 93 
days or less;
(iv) <<NOTE: Time period.>> money received 
under repurchase agreements, with the permitted 
payment stablecoin issuer acting as a seller of 
securities and with an overnight maturity, that 
are backed by Treasury bills with a maturity of 93 
days or less;
(v) reverse repurchase agreements, with the 
permitted payment stablecoin issuer acting as a 
purchaser of securities and with an overnight 
maturity, that are collateralized by Treasury 
notes, bills, or bonds on an overnight basis, 
subject to overcollateralization in line with 
standard market terms, that are--
(I) tri-party;
(II) centrally cleared through a 
clearing agency registered with the 
Securities and Exchange Commission; or

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(III) bilateral with a counterparty 
that the issuer has determined to be 
adequately creditworthy even in the 
event of severe market stress;
(vi) securities issued by an investment 
company registered under section 8(a) of the 
Investment Company Act of 1940 (15 U.S.C. 80a-
8(a)), or other registered Government money market 
fund, and that are invested solely in underlying 
assets described in clauses (i) through (v);
(vii) any other similarly liquid Federal 
Government-issued asset approved by the primary 
Federal payment stablecoin regulator, in 
consultation with the State payment stablecoin 
regulator, if applicable, of the permitted payment 
stablecoin issuer; or
(viii) <<NOTE: Compliance.>> any reserve 
described in clause (i) through (iii) or clause 
(vi) through (vii) in tokenized form, provided 
that such reserves comply with all applicable laws 
and regulations;
(B) <<NOTE: Public information.>> publicly disclose 
the issuer's redemption policy, which shall--
(i) <<NOTE: Procedures.>> establish clear and 
conspicuous procedures for timely redemption of 
outstanding payment stablecoins, provided that any 
discretionary limitations on timely redemptions 
can only be imposed by a State qualified payment 
stablecoin regulator, the Corporation, the 
Comptroller, or the Board, consistent with section 
7; and
(ii) <<NOTE: Time period. Notice.>> publicly, 
clearly, and conspicuously disclose in plain 
language all fees associated with purchasing or 
redeeming the payment stablecoins, provided that 
such fees can only be changed upon not less than 7 
days' prior notice to consumers; and
(C) <<NOTE: Web posting.>> publish the monthly 
composition of the issuer's reserves on the website of 
the issuer, containing--
(i) the total number of outstanding payment 
stablecoins issued by the issuer; and
(ii) the amount and composition of the 
reserves described in subparagraph (A), including 
the average tenor and geographic location of 
custody of each category of reserve instruments.
(2) Prohibition on rehypothecation.--Reserves required under 
paragraph (1)(A) may not be pledged, rehypothecated, or reused 
by the permitted payment stablecoin issuer, either directly or 
indirectly, except for the purpose of--
(A) satisfying margin obligations in connection with 
investments in permitted reserves under clauses (iv) and 
(v) of paragraph (1)(A);
(B) satisfying obligations associated with the use, 
receipt, or provision of standard custodial services; or
(C) <<NOTE: Time period.>> creating liquidity to 
meet reasonable expectations of requests to redeem 
payment stablecoins, such that reserves in the form of 
Treasury bills may be sold as purchased securities for 
repurchase agreements with a maturity of 93 days or 
less, provided that either--
(i) the repurchase agreements are cleared by a 
clearing agency registered with the Securities and 
Exchange Commission; or

[[Page 139 STAT. 427]]

(ii) <<NOTE: Advance approval.>> the 
permitted payment stablecoin issuer receives the 
prior approval of its primary Federal payment 
stablecoin regulator or State payment stablecoin 
regulator, as applicable.
(3) Monthly certification; examination of reports by 
registered public accounting firm.--
(A) In general.--A permitted payment stablecoin 
issuer shall, each month, have the information disclosed 
in the previous month-end report required under 
paragraph (1)(D) examined by a registered public 
accounting firm.
(B) Certification.--Each month, the Chief Executive 
Officer and Chief Financial Officer of a permitted 
payment stablecoin issuer shall submit a certification 
as to the accuracy of the monthly report to, as 
applicable--
(i) the primary Federal payment stablecoin 
regulator of the permitted payment stablecoin 
issuer; or
(ii) the State payment stablecoin regulator of 
the permitted payment stablecoin issuer.
(C) Criminal penalty.--Any person who submits a 
certification required under subparagraph (B) knowing 
that such certification is false shall be subject to the 
same criminal penalties as those set forth under section 
1350(c) of title 18, United States Code.
(4) Capital, liquidity, and risk management requirements.--
(A) In general.--The primary Federal payment 
stablecoin regulators shall, or in the case of a State 
qualified payment stablecoin issuer, the State payment 
stablecoin regulator shall, consistent with section 13, 
issue regulations implementing--
(i) capital requirements applicable to 
permitted payment stablecoin issuers that--
(I) are tailored to the business 
model and risk profile of permitted 
payment stablecoin issuers;
(II) do not exceed requirements that 
are sufficient to ensure the ongoing 
operations of permitted payment 
stablecoin issuers; and
(III) <<NOTE: Determination.>> in 
the case of the primary Federal payment 
stablecoin regulators, if the primary 
Federal payment stablecoin regulators 
determine that a capital buffer is 
necessary to ensure the ongoing 
operations of permitted payment 
stablecoin issuers, may include capital 
buffers that are tailored to the 
business model and risk profile of 
permitted payment stablecoin issuers;
(ii) the liquidity standard under paragraph 
(1)(A);
(iii) reserve asset diversification, including 
deposit concentration at banking institutions, and 
interest rate risk management standards applicable 
to permitted payment stablecoin issuers that--
(I) are tailored to the business 
model and risk profile of permitted 
payment stablecoin issuers; and
(II) do not exceed standards that 
are sufficient to ensure the ongoing 
operations of permitted payment 
stablecoin issuers; and

[[Page 139 STAT. 428]]

(iv) appropriate operational, compliance, and 
information technology risk management principles-
based requirements and standards, including Bank 
Secrecy Act and sanctions compliance standards, 
that--
(I) are tailored to the business 
model and risk profile of permitted 
payment stablecoin issuers; and
(II) are consistent with applicable 
law.
(B) Rule of construction.--Nothing in this paragraph 
shall be construed to limit--
(i) the authority of the primary Federal 
payment stablecoin regulators, in prescribing 
standards under this paragraph, to tailor or 
differentiate among issuers on an individual basis 
or by category, taking into consideration the 
capital structure, business model risk profile, 
complexity, financial activities (including 
financial activities of subsidiaries), size, and 
any other risk-related factors of permitted 
payment stablecoin issuers that a primary Federal 
payment stablecoin regulator determines 
appropriate, provided that such tailoring or 
differentiation occurs without respect to whether 
a permitted payment stablecoin issuer is regulated 
by a State payment stablecoin regulator; or
(ii) any supervisory, regulatory, or 
enforcement authority of a primary Federal payment 
stablecoin regulator to further the safe and sound 
operation of an institution for which the primary 
Federal payment stablecoin regulator is the 
appropriate regulator.
(C) Applicability of existing capital standards.--
(i) Definition.--In this subparagraph, the 
term ``depository institution holding company'' 
has the meaning given that term under section 
171(a)(3) of the Financial Stability Act of 2010 
(12 U.S.C. 5371(a)(3)).
(ii) Applicability of financial stability 
act.--With respect to the promulgation of rules 
under subparagraph (A) and clauses (iii) and (iv) 
of this subparagraph, section 171 of the Financial 
Stability Act of 2010 (12 U.S.C. 5371) shall not 
apply.
(iii) Rules relating to leverage capital 
requirements or risk-based capital requirements.--
Any rule issued by an appropriate Federal banking 
agency that imposes, on a consolidated basis, a 
leverage capital requirement or risk-based capital 
requirement with respect to an insured depository 
institution or depository institution holding 
company shall provide that, for purposes of such 
leverage capital requirement or risk-based capital 
requirement, any insured depository institution or 
depository institution holding company that 
includes, on a consolidated basis, a permitted 
payment stablecoin issuer, shall not be required 
to hold, with respect to such permitted payment 
stablecoin issuer and its assets and operations, 
any amount of regulatory capital in excess of the 
capital that such permitted payment stablecoin 
issuer must maintain under the capital 
requirements issued pursuant to subparagraph 
(A)(i).

[[Page 139 STAT. 429]]

(iv) <<NOTE: Deadline. Compliance.>> 
Modifications.--Not later than the earlier of the 
rulemaking deadline under section 13 or the date 
on which the Federal payment stablecoin regulators 
issue regulations to carry out this section, each 
appropriate Federal banking agency shall amend or 
otherwise modify any regulation of the appropriate 
Federal banking agency described in clause (iii) 
so that such regulation, as amended or otherwise 
modified, complies with clause (iii) of this 
subparagraph.
(5) Treatment under the bank secrecy act and sanctions 
laws.--
(A) <<NOTE: Applicability.>> 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--
(i) <<NOTE: Risk assessments. Designation.>> 
maintenance of an effective anti-money laundering 
program, which shall include appropriate risk 
assessments and designation of an officer to 
supervise the program;
(ii) <<NOTE: Records.>> retention of 
appropriate records;
(iii) monitoring and reporting of any 
suspicious transaction relevant to a possible 
violation of law or regulation;
(iv) <<NOTE: Policies. Procedures.>> 
technical capabilities, policies, and procedures 
to block, freeze, and reject specific or 
impermissible transactions that violate Federal or 
State laws, rules, or regulations;
(v) <<NOTE: Verification.>> 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; and
(vi) <<NOTE: Verification. Lists.>> 
maintenance of an effective economic sanctions 
compliance program, including verification of 
sanctions lists, consistent with Federal law.
(B) Rulemaking.--The Secretary of the Treasury shall 
adopt rules, tailored to the size and complexity of 
permitted payment stablecoin issuers, to implement 
subparagraph (A).
(C) Reservation of authority.--Nothing in this Act 
shall restrict the authority of the Secretary of the 
Treasury to implement, administer, and enforce the 
provisions of subchapter II of chapter 53 of title 31, 
United States Code.
(6) Coordination with permitted payment stablecoin issuers 
with respect to blocking of property and technological 
capabilities to comply with lawful orders.--
(A) In general.--The Secretary of the Treasury--
(i) shall, to the best of the Secretary's 
ability, coordinate with a permitted payment 
stablecoin issuer before taking any action to 
block and prohibit transactions in property and 
interests in property of a foreign person to 
ensure that the permitted payment stablecoin 
issuer is able to effectively block a payment

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stablecoin of the foreign person upon issuance of 
the payment stablecoin; and
(ii) is not required to notify any permitted 
payment stablecoin issuer of any intended action 
described in clause (i) prior to taking such 
action.
(B) Compliance with lawful orders.--A permitted 
payment stablecoin issuer may issue payment stablecoins 
only if the issuer has the technological capability to 
comply, and will comply, with the terms of any lawful 
order.
(C) Report required.--Not later than 1 year after 
the date of enactment of this Act, the Attorney General 
and the Secretary of the Treasury shall submit to the 
Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Services of the 
House of Representatives a report, which may include a 
classified annex if applicable, on the coordination with 
permitted payment stablecoin issuers required under 
subparagraph (A).
(D) Rule of construction.--Nothing in this paragraph 
shall be construed to alter or affect the authority of 
State payment stablecoin regulators with respect to the 
offer of foreign-issued digital assets that are issued 
within a foreign jurisdiction.
(7) Limitation on payment stablecoin activities.--
(A) In general.--A permitted payment stablecoin 
issuer may only--
(i) issue payment stablecoins;
(ii) redeem payment stablecoins;
(iii) manage related reserves, including 
purchasing, selling, and holding reserve assets or 
providing custodial services for reserve assets, 
consistent with State and Federal law;
(iv) provide custodial or safekeeping services 
for payment stablecoins, required reserves, or 
private keys of payment stablecoins, consistent 
with this Act; and
(v) undertake other activities that directly 
support any of the activities described in clauses 
(i) through (iv).
(B) Rule of construction.--Nothing in subparagraph 
(A) shall limit a permitted payment stablecoin issuer 
from engaging in payment stablecoin activities or 
digital asset service provider activities specified by 
this Act, and activities incidental thereto, that are 
authorized by the primary Federal payment stablecoin 
regulator or the State payment stablecoin regulator, as 
applicable, consistent with all other Federal and State 
laws, provided that the claims of payment stablecoin 
holders rank senior to any potential claims of non-
stablecoin creditors with respect to the reserve assets, 
consistent with section 11.
(8) Prohibition on tying.--
(A) In general.--A permitted payment stablecoin 
issuer may not provide services to a customer on the 
condition that the customer obtain an additional paid 
product or service from the permitted payment stablecoin 
issuer, or any of its subsidiaries, or agree to not 
obtain an additional product or service from a 
competitor.

[[Page 139 STAT. 431]]

(B) Regulations.--The Board may issue such 
regulations as are necessary to carry out this 
paragraph, and, in consultation with other relevant 
primary Federal payment stablecoin regulators, may by 
regulation or order, permit such exceptions to 
subparagraph (A) as the Board considers will not be 
contrary to the purpose of this Act.
(9) Prohibition on the use of deceptive names.--
(A) In general.--A permitted payment stablecoin 
issuer may not--
(i) use any combination of terms relating to 
the United States Government, including ``United 
States'', ``United States Government'', and 
``USG'' in the name of a payment stablecoin; or
(ii) market a payment stablecoin in such a way 
that a reasonable person would perceive the 
payment stablecoin to be--
(I) legal tender, as described in 
section 5103 of title 31, United States 
Code;
(II) issued by the United States; or
(III) guaranteed or approved by the 
Government of the United States.
(B) Pegged stablecoins.--Abbreviations directly 
relating to the currency to which a payment stablecoin 
is pegged, such as ``USD'', are not subject to the 
prohibitions in subparagraph (A).
(10) Audits and reports.--
(A) Annual financial statement.--
(i) In general.--A permitted payment 
stablecoin issuer with more than $50,000,000,000 
in consolidated total outstanding issuance, that 
is not subject to the reporting requirements under 
section 13(a) or 15(d) of the Securities and 
Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)), 
shall prepare, in accordance with generally 
accepted accounting principles, an annual 
financial statement, which shall include the 
disclosure of any related party transactions, as 
defined by such generally accepted accounting 
principles.
(ii) Auditor.--A registered public accounting 
firm shall perform an audit of the annual 
financial statements described in clause (i).
(iii) Standards.--An audit described in clause 
(ii) shall be conducted in accordance with all 
applicable auditing standards established by the 
Public Company Accounting Oversight Board, 
including those relating to auditor independence, 
internal controls, and related party transactions.
(iv) Rule of construction.--Nothing in this 
subparagraph shall be construed to limit, alter, 
or expand the jurisdiction of the Public Company 
Accounting Oversight Board over permitted payment 
stablecoin issuers or registered public accounting 
firms.
(B) Public disclosure and submission to federal 
regulators.--Each permitted payment stablecoin issuer 
required to prepare an audited annual financial 
statement under subparagraph (A) shall--

[[Page 139 STAT. 432]]

(i) make such audited financial statements 
publicly available on the website of the permitted 
payment stablecoin issuer; and
(ii) submit such audited financial statements 
annually to their primary Federal payment 
stablecoin regulator.
(C) Consultation.--The primary Federal payment 
stablecoin regulators may consult with the Public 
Company Accounting Oversight Board to determine best 
practices for determining audit oversight and to detect 
fraud, material misstatements, and other financial 
misrepresentations that could mislead permitted payment 
stablecoin holders.
(11) Prohibition on interest.--No permitted payment 
stablecoin issuer or foreign payment stablecoin issuer shall pay 
the holder of any payment stablecoin any form of interest or 
yield (whether in cash, tokens, or other consideration) solely 
in connection with the holding, use, or retention of such 
payment stablecoin.
(12) <<NOTE: Compliance.>> Non-financial services public 
companies.--
(A) Definitions.--In this paragraph:
(i) Financial activities.--The term 
``financial activities''--
(I) has the meaning given that term 
in section 4(k) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1843(k)); 
and
(II) for the avoidance of doubt, 
includes those activities described in 
subparagraphs (A) and (B) of section 
2(7) and section 4(a)(7)(A) of this Act.
(ii) Public company.--The term ``public 
company'' means an issuer that is required to file 
reports under section 13(a) or 15(d) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78m(a), 
78o(d)).
(B) Prohibition.--
(i) In general.--A public company that is not 
predominantly engaged in 1 or more financial 
activities, and its wholly or majority owned 
subsidiaries or affiliates, may not issue a 
payment stablecoin unless the public company 
obtains a unanimous vote of the Stablecoin 
Certification Review Committee finding that--
(I) it will not pose a material risk 
to the safety and soundness of the 
United States banking system, the 
financial stability of the United 
States, or the Deposit Insurance Fund;
(II) <<NOTE: Consent.>> the public 
company will comply with data use 
limitations providing that, unless the 
public company receives consent from the 
consumer, nonpublic personal information 
obtained from stablecoin transaction 
data may not be--
(aa) used to target, 
personalize, or rank advertising 
or other content;
(bb) sold to any third 
party; or
(cc) shared with non-
affiliates; and
(III) the public company and the 
affiliates of the public company will 
comply with the tying prohibitions under 
paragraph (8).

[[Page 139 STAT. 433]]

(ii) Exception.--The prohibition under clause 
(i) against the sharing of consumer information 
shall not apply to sharing of such information--
(I) to comply with Federal, State, 
or local laws, rules, and other 
applicable legal requirements;
(II) to comply with a properly 
authorized civil, criminal, or 
regulatory investigation, subpoena, or 
summons by a Federal, State, or local 
authority; or
(III) to respond to judicial process 
or a government regulatory authority 
having jurisdiction over the public 
company.
(C) Extension of prohibition.--
(i) In general.--Any company not domiciled in 
the United States or its Territories that is not 
predominantly engaged in 1 or more financial 
activities, may not issue a payment stablecoin 
unless the public company obtains a unanimous vote 
of the Stablecoin Certification Review Committee 
finding that--
(I) it will not pose a material risk 
to the safety and soundness of the 
United States banking system, the 
financial stability of the United 
States, or the Deposit Insurance Fund;
(II) <<NOTE: Consent.>> the public 
company will comply with data use 
limitations providing that, unless the 
public company receives consent from the 
consumer, nonpublic personal information 
obtained from stablecoin transaction 
data may not be--
(aa) used to target, 
personalize, or rank advertising 
or other content;
(bb) sold to any third 
party; or
(cc) shared with non-
affiliates; except
(III) the public company and the 
affiliates of the public company will 
comply with the tying prohibitions under 
paragraph (8).
(ii) Exception.--The prohibition under clause 
(i) against the sharing of consumer information 
shall not apply to sharing of such information--
(I) to comply with Federal, State, 
or local laws, rules, and other 
applicable legal requirements;
(II) to comply with a properly 
authorized civil, criminal, or 
regulatory investigation, subpoena, or 
summons by a Federal, State, or local 
authority; or
(III) to respond to judicial process 
or a government regulatory authority 
having jurisdiction over the public 
company.
(D) <<NOTE: Deadline.>> Rulemaking.--Not later than 
1 year after the date of enactment of this Act, the 
Stablecoin Certification Review Committee shall issue an 
interpretive rule clarifying the application of this 
paragraph.
(13) Eligibility.--Nothing in this Act shall be construed as 
expanding or contracting legal eligibility to receive services 
available from a Federal Reserve bank or to make deposits with a 
Federal Reserve bank, in each case pursuant to the Federal 
Reserve Act.

[[Page 139 STAT. 434]]

(14) Rule of construction.--Compliance with this section 
does not alter or affect any additional requirement of a State 
payment stablecoin regulator that may apply relating to the 
offering of payment stablecoins.

(b) Regulation by the Comptroller.--
(1) In general.--Notwithstanding section 5136C of the 
Revised Statutes (12 U.S.C. 25b), section 6 of the Home Owners' 
Loan Act (12 U.S.C. 1465), or any applicable State law relating 
to licensing and supervision, a Federal qualified payment 
stablecoin issuer approved by the Comptroller pursuant to 
section 5 of this Act shall be licensed, regulated, examined, 
and supervised exclusively by the Comptroller, which shall have 
authority, in coordination with other relevant primary Federal 
payment stablecoin regulators and State payment stablecoin 
regulators, to issue such regulations and orders as necessary to 
ensure financial stability and implement subsection (a).
(2) Conforming amendment.--Section 324(b) of the Revised 
Statutes (12 U.S.C. 1(b)) is amended by adding at the end the 
following:
``(3) Regulation of federal qualified payment stablecoin 
issuers.--The Comptroller of the Currency shall, in coordination 
with other relevant regulators and consistent with section 13 of 
the GENIUS Act, issue such regulations and orders as necessary 
to ensure financial stability and implement section 4(a) of that 
Act.''.

(c) State-level Regulatory Regimes.--
(1) Option for state-level regulatory regime.--
Notwithstanding the Federal regulatory framework established 
under this Act, a State qualified payment stablecoin issuer with 
a consolidated total outstanding issuance of not more than 
$10,000,000,000 may opt for regulation under a State-level 
regulatory regime, provided that the State-level regulatory 
regime is substantially similar to the Federal regulatory 
framework under this Act.
(2) <<NOTE: Notice. Determination.>> Principles.--The 
Secretary of the Treasury shall, through notice and comment 
rulemaking, establish broad-based principles for determining 
whether a State-level regulatory regime is substantially similar 
to the Federal regulatory framework under this Act.
(3) <<NOTE: Contracts.>> Review.--State payment stablecoin 
regulators shall review State-level regulatory regimes according 
to the principles established by the Secretary of the Treasury 
under paragraph (2) and for the purposes of establishing any 
necessary cooperative agreements to implement section 7(f).
(4) <<NOTE: Deadlines.>> Certification.--
(A) Initial certification.--Subject to subparagraph 
(B), not later than 1 year after the effective date of 
this Act, a State payment stablecoin regulator shall 
submit to the Stablecoin Certification Review Committee 
an initial certification that the State-level regulatory 
regime meets the criteria for substantial similarity 
established pursuant to paragraph (2).
(B) <<NOTE: Attestation.>> Form of certification.--
The initial certification required under subparagraph 
(A) shall contain, in a form prescribed by the 
Stablecoin Certification Review Committee, an 
attestation that the State-level regulatory

[[Page 139 STAT. 435]]

regime meets the criteria for substantial similarity 
established pursuant to paragraph (2).
(C) Annual recertification.--Not later than a date 
to be determined by the Secretary of the Treasury each 
year, a State payment stablecoin regulator shall submit 
to the Stablecoin Certification Review Committee an 
additional certification that confirms the accuracy of 
the initial certification submitted under subparagraph 
(A).
(5) Certification review.--
(A) <<NOTE: Deadline.>> In general.--Not later than 
30 days after the date on which a State payment 
stablecoin regulator submits an initial certification or 
a recertification under paragraph (4), the Stablecoin 
Certification Review Committee shall--
(i) <<NOTE: Approval. Determination.>> 
approve such certification if the Committee 
unanimously determines that the State-level 
regulatory regime meets or exceeds the standards 
and requirements described in subsection (a); or
(ii) <<NOTE: Denial.>> deny such 
certification and provide the State payment 
stablecoin regulator with a written explanation of 
the denial, describing the reasoned basis for the 
denial with sufficient detail to enable the State 
payment stablecoin regulator and State-level 
regulatory regime to make any changes necessary to 
meet or exceed the standards and requirements 
described in subsection (a).
(B) Recertifications.--With respect to any 
recertification certification submitted by a State 
payment stablecoin regulator under paragraph (4), the 
Stablecoin Certification Review Committee shall only 
deny the recertification if--
(i) the State-level regulatory regime has 
materially changed from the prior certification or 
there has been a significant change in 
circumstances; and
(ii) the material change in the regime or 
significant change in circumstances described in 
clause (i) is such that the State-level regulatory 
regime will not promote the safe and sound 
operation of State qualified payment stablecoin 
issuers under its supervision.
(C) Opportunity to cure.--
(i) <<NOTE: Deadline.>> In general.--With 
respect to a denial described under subparagraph 
(A) or (B), the Stablecoin Certification Review 
Committee shall provide the State payment 
stablecoin regulator with not less than 180 days 
from the date on which the State payment 
stablecoin regulator is notified of such denial 
to--
(I) make such changes as may be 
necessary to ensure the State-level 
regulatory regime meets or exceeds the 
standards described in subsection (a); 
and
(II) resubmit the initial 
certification or recertification.
(ii) <<NOTE: Determination. Deadline.>> 
Denial.--If, after a State payment stablecoin 
regulator resubmits an initial certification or 
recertification under clause (i), the Stablecoin 
Certification Review Committee again determines 
that the initial certification or recertification 
shall result in a denial, the Stablecoin 
Certification Review Committee shall,

[[Page 139 STAT. 436]]

not later than 30 days after such determination, 
provide the State payment stablecoin regulator 
with a written explanation for the determination.
(D) Appeal of denial.--A State payment stablecoin 
regulator in receipt of a denial under subparagraph 
(C)(ii) may appeal the denial to the United States Court 
of Appeals for the District of Columbia Circuit.
(E) Right to resubmit.--A State payment stablecoin 
regulator in receipt of a denial under this paragraph 
shall not be prohibited from resubmitting a new 
certification under paragraph (4).
(6) <<NOTE: Federal Register, publication. Web posting.>> 
List.--The Secretary of the Treasury shall publish and maintain 
in the Federal Register and on the website of the Department of 
the Treasury a list of States that have submitted initial 
certifications and recertifications under paragraph (4).
(7) Expedited certifications of existing regulatory 
regimes.--The <<NOTE: Deadline. Guidance. Timeline.>> 
Stablecoin Certification Review Committee shall take all 
necessary steps to endeavor that, with respect to a State that, 
within 180 days of the date of enactment of this Act, has in 
effect a prudential regulatory regime (including regulations and 
guidance) for the supervision of digital assets or payment 
stablecoins, the certification process under this paragraph with 
respect to that regime occurs on an expedited timeline after the 
effective date of this Act.

(d) <<NOTE: Deadlines. Effective dates.>> Transition to Federal 
Oversight.--
(1) Depository institution.--A State chartered depository 
institution that is a State qualified payment stablecoin issuer 
with a payment stablecoin with a consolidated total outstanding 
issuance of more than $10,000,000,000 shall--
(A) not later than 360 days after the payment 
stablecoin reaches such threshold, transition to the 
Federal regulatory framework of the primary Federal 
payment stablecoin regulator of the State chartered 
depository institution, which shall be administered by 
the State payment stablecoin regulator of the State 
chartered depository institution and the primary Federal 
payment stablecoin regulator acting jointly; or
(B) beginning on the date the payment stablecoin 
reaches such threshold, cease issuing new payment 
stablecoins until the payment stablecoin is under the 
$10,000,000,000 consolidated total outstanding issuance 
threshold.
(2) Other institutions.--A State qualified payment 
stablecoin issuer not described in paragraph (1) with a payment 
stablecoin with a consolidated total outstanding issuance of 
more than $10,000,000,000 shall--
(A) not later than 360 days after the payment 
stablecoin reaches such threshold, transition to the 
Federal regulatory framework under subsection (a) 
administered by the relevant State payment stablecoin 
regulator and the Comptroller, acting in coordination; 
or
(B) beginning on the date the payment stablecoin 
reaches such threshold, cease issuing new payment 
stablecoins until the payment stablecoin is under the 
$10,000,000,000 consolidated total outstanding issuance 
threshold.
(3) Waiver.--

[[Page 139 STAT. 437]]

(A) In general.--Notwithstanding paragraphs (1) and 
(2), the applicable primary Federal payment stablecoin 
regulator may permit a State qualified payment 
stablecoin issuer with a payment stablecoin with a 
consolidated total outstanding issuance of more than 
$10,000,000,000 to remain solely supervised by a State 
payment stablecoin regulator.
(B) <<NOTE: Determination.>> Criteria for waiver.--
The primary Federal payment stablecoin regulator shall 
consider the following exclusive criteria in determining 
whether to issue a waiver under this paragraph:
(i) The capital maintained by the State 
qualified payment stablecoin issuer.
(ii) The past operations and examination 
history of the State qualified payment stablecoin 
issuer.
(iii) The experience of the State payment 
stablecoin regulator in supervising payment 
stablecoin and digital asset activities.
(iv) The supervisory framework, including 
regulations and guidance, of the State qualified 
payment stablecoin issuer with respect to payment 
stablecoins and digital assets.
(C) Rule of construction.--
(i) Federal oversight.--A State qualified 
payment stablecoin issuer subject to Federal 
oversight under paragraph (1) or (2) of this 
subsection that does not receive a waiver under 
this paragraph shall continue to be supervised by 
the State payment stablecoin regulator of the 
State qualified payment stablecoin issuer jointly 
with the primary Federal payment stablecoin 
regulator. Nothing in this subsection shall 
require the State qualified payment stablecoin 
issuer to convert to a Federal charter.
(ii) <<NOTE: Guidance. Time 
period. Approval.>> State oversight.--A State 
qualified payment stablecoin issuer supervised by 
a State payment stablecoin regulator that has 
established a prudential regulatory regime 
(including regulations and guidance) for the 
supervision of digital assets or payment 
stablecoins before the 90-day period ending on the 
date of enactment of this Act that has been 
certified pursuant to subsection (c) and has 
approved 1 or more issuers to issue payment 
stablecoins under the supervision of such State 
payment stablecoin regulator, shall be 
presumptively approved for a waiver under this 
paragraph, unless the Federal payment stablecoin 
regulator finds, by clear and convincing evidence, 
that the requirements of subparagraph (B) are not 
substantially met with respect to that issuer or 
that the issuer poses significant safety and 
soundness risks to the financial system of the 
United States.

(e) Misrepresentation of Insured Status.--
(1) In general.--Payment stablecoins shall not be backed by 
the full faith and credit of the United States, guaranteed by 
the United States Government, subject to deposit insurance by 
the Federal Deposit Insurance Corporation, or subject to share 
insurance by the National Credit Union Administration.
(2) Misrepresentation of insured status.--

[[Page 139 STAT. 438]]

(A) In general.--It shall be unlawful to represent 
that payment stablecoins are backed by the full faith 
and credit of the United States, guaranteed by the 
United States Government, or subject to Federal deposit 
insurance or Federal share insurance.
(B) Penalty.--A violation of subparagraph (A) shall 
be considered a violation of section 18(a)(4) of the 
Federal Deposit Insurance Act (12 U.S.C. 1828(a)(4)) or 
section 709 of title 18, United States Code, as 
applicable.
(3) Marketing.--
(A) In general.--It shall be unlawful to market a 
product in the United States as a payment stablecoin 
unless the product is issued pursuant to this Act.
(B) Penalty.--Whoever knowingly and willfully 
participates in a violation of subparagraph (A) shall be 
fined by the Department of the Treasury not more than 
$500,000 for each such violation.
(C) Determination of the number of violations.--For 
purposes of determining the number of violations for 
which to impose penalties under subparagraph (B), 
separate acts of noncompliance are a single violation 
when the acts are the result of--
(i) a common or substantially overlapping 
originating cause; or
(ii) the same statement or publication.
(D) Referral to secretary of the treasury.--If a 
Federal payment stablecoin regulator has reason to 
believe that any person has knowingly and willfully 
violated subparagraph (A), the Federal payment 
stablecoin regulator shall refer the matter to the 
Secretary of the Treasury.

(f) Officers or Directors Convicted of Certain Felonies.--
(1) In general.--No individual who has been convicted of a 
felony offense involving insider trading, embezzlement, 
cybercrime, money laundering, financing of terrorism, or 
financial fraud may serve as--
(A) an officer of a payment stablecoin issuer; or
(B) a director of a payment stablecoin issuer.
(2) Penalty.--
(A) In general.--Whoever knowingly participates in a 
violation of paragraph (1) shall be fined not more than 
$1,000,000 for each such violation, imprisoned for not 
more than 5 years, or both.
(B) Referral to attorney general.--If a Federal 
payment stablecoin regulator has reason to believe that 
any person has knowingly violated paragraph (1), the 
Federal payment stablecoin regulator shall refer the 
matter to the Attorney General.

(g) Clarification Relating to Federal Savings Association 
Reserves.--A Federal savings association established under the Home 
Owners' Loan Act (12 U.S.C. 1461 et seq.) that holds a reserve that 
satisfies the requirements of section 4(a)(1) shall not be required to 
satisfy the qualified thrift lender test under section 10(m) of the Home 
Owners' Loan Act (12 U.S.C. 1467a(m)) with respect to such reserve 
assets.
(h) Rulemaking.--

[[Page 139 STAT. 439]]

(1) In general.--Consistent with section 13, the primary 
Federal payment stablecoin regulators shall, and State payment 
stablecoin regulators may, issue such regulations relating to 
permitted payment stablecoin issuers as may be necessary to 
establish a payment stablecoin regulatory framework necessary to 
administer and carry out the requirements of this section, 
including to establish conditions, and to prevent evasion 
thereof.
(2) Coordinated issuance of regulations.--All regulations 
issued to carry out this section shall be issued in coordination 
by the primary Federal payment stablecoin regulators, if not 
issued by a State payment stablecoin regulator.

(i) Rules of Construction.--Nothing in this Act shall be construed--
(1) as expanding the authority of the Board with respect to 
the services the Board can make directly available to the 
public; or
(2) to limit or prevent the continued application of 
applicable ethics statutes and regulations administered by the 
Office of Government Ethics, or the ethics rules of the Senate 
and the House of Representatives, including section 208 of title 
18, United States Code, and sections 2635.702 and 2635.802 of 
title 5, Code of Federal Regulations. For the avoidance of 
doubt, existing Office of Government Ethics laws and the ethics 
rules of the Senate and the House of Representatives prohibit 
any member of Congress or senior executive branch official from 
issuing a payment stablecoin during their time in public 
service. For the purposes of this paragraph, an employee 
described in section 202 of title 18, United States Code, shall 
be deemed an executive branch employee for purposes of complying 
with section 208 of that title.
SEC. 5. <<NOTE: 12 USC 5904.>> APPROVAL OF SUBSIDIARIES OF 
INSURED DEPOSITORY INSTITUTIONS AND FEDERAL 
QUALIFIED PAYMENT STABLECOIN ISSUERS.

(a) Application.--
(1) In general.--Each primary Federal payment stablecoin 
regulator shall--
(A) <<NOTE: Review.>> receive, review, and consider 
for approval applications from any insured depository 
institution that seeks to issue payment stablecoins 
through a subsidiary and any nonbank entity, Federal 
branch, or uninsured national bank that is chartered by 
the Comptroller pursuant to title LXII of the Revised 
Statutes, and that seeks to issue payment stablecoins as 
a Federal qualified payment stablecoin issuer; and
(B) <<NOTE: Process.>> establish a process and 
framework for the licensing, regulation, examination, 
and supervision of such entities that prioritizes the 
safety and soundness of such entities.
(2) Authority to issue regulations and process 
applications. <<NOTE: Deadline.>> --The primary Federal payment 
stablecoin regulators shall, before the date described in 
section 13--
(A) issue regulations consistent with that section 
to carry out this section; and
(B) pursuant to the regulations described in 
subparagraph (A), accept and process applications 
described in paragraph (1).

[[Page 139 STAT. 440]]

(3) <<NOTE: Determination.>> Mandatory approval process.--A 
primary Federal payment stablecoin regulator shall, upon receipt 
of a substantially complete application received under paragraph 
(1), evaluate and make a determination on each application based 
on the criteria established under this Act.

(b) Evaluation of Applications.--A substantially complete 
application received under subsection (a) shall be evaluated by the 
primary Federal payment stablecoin regulator using the factors described 
in subsection (c).
(c) Factors to Be Considered.--The factors described in this 
subsection are the following:
(1) The ability of the applicant (or, in the case of an 
applicant that is an insured depository institution, the 
subsidiary of the applicant), based on financial condition and 
resources, to meet the requirements set forth under section 4.
(2) Whether an individual who has been convicted of a felony 
offense involving insider trading, embezzlement, cybercrime, 
money laundering, financing of terrorism, or financial fraud is 
serving as an officer or director of the applicant.
(3) The competence, experience, and integrity of the 
officers, directors, and principal shareholders of the 
applicant, its subsidiaries, and parent company, including--
(A) the record of those officers, directors, and 
principal shareholders of compliance with laws and 
regulations; and
(B) the ability of those officers, directors, and 
principal shareholders to fulfill any commitments to, 
and any conditions imposed by, their primary Federal 
payment stablecoin regulator in connection with the 
application at issue and any prior applications.
(4) Whether the redemption policy of the applicant meets the 
standards under section 4(a)(1)(B).
(5) Any other factors established by the primary Federal 
payment stablecoin regulator that are necessary to ensure the 
safety and soundness of the permitted payment stablecoin issuer.

(d) <<NOTE: Deadlines.>> Timing for Decision; Grounds for Denial.--
(1) Timing for decisions on applications.--
(A) In general.--Not later than 120 days after 
receiving a substantially complete application under 
subsection (a), a primary Federal payment stablecoin 
regulator shall render a decision on the application.
(B) Substantially complete.--
(i) In general.--For purposes of subparagraph 
(A), an application shall be considered 
substantially complete if the application contains 
sufficient information for the primary Federal 
payment stablecoin regulator to render a decision 
on whether the applicant satisfies the factors 
described in subsection (c).
(ii) Notification.--Not later than 30 days 
after receiving an application under subsection 
(a), a primary Federal payment stablecoin 
regulator shall notify the applicant as to whether 
the primary Federal payment stablecoin regulator 
considers the application to be substantially 
complete and, if the application is not 
substantially complete, the additional information

[[Page 139 STAT. 441]]

the applicant shall provide in order for the 
application to be considered substantially 
complete.
(iii) Material change in circumstances.--An 
application considered substantially complete 
under this subparagraph remains substantially 
complete unless there is a material change in 
circumstances that requires the primary Federal 
payment stablecoin regulator to treat the 
application as a new application.
(2) Denial of application.--
(A) Grounds for denial.--
(i) <<NOTE: Determination.>> In general.--A 
primary Federal payment stablecoin regulator shall 
only deny a substantially complete application 
received under subsection (a) if the regulator 
determines that the activities of the applicant 
would be unsafe or unsound based on the factors 
described in subsection (c).
(ii) Issuance on open, public, or 
decentralized network not ground for denial.--The 
issuance of a payment stablecoin on an open, 
public, or decentralized network shall not be a 
valid ground for denial of an application received 
under subsection (a).
(B) <<NOTE: Notice. Recommenda- tions.>> 
Explanation required.--If a primary Federal payment 
stablecoin regulator denies a complete application 
received under subsection (a), not later than 30 days 
after the date of such denial, the regulator shall 
provide the applicant with written notice explaining the 
denial with specificity, including all findings made by 
the regulator with respect to all identified material 
shortcomings in the application, including actionable 
recommendations on how the applicant could address the 
identified material shortcomings.
(C) Opportunity for hearing; final determination.--
(i) In general.--Not later than 30 days after 
the date of receipt of any notice of the denial of 
an application under this section, the applicant 
may request, in writing, an opportunity for a 
written or oral hearing before the primary Federal 
payment stablecoin regulator to appeal the denial.
(ii) Timing.--Upon receipt of a timely request 
under clause (i), the primary Federal payment 
stablecoin regulator shall notice a time (not 
later than 30 days after the date of receipt of 
the request) and place at which the applicant may 
appear, personally or through counsel, to submit 
written materials or provide oral testimony and 
oral argument.
(iii) <<NOTE: Notification. Statement.>> 
Final determination.--Not later than 60 days after 
the date of a hearing under this subparagraph, the 
applicable primary Federal payment stablecoin 
regulator shall notify the applicant of a final 
determination, which shall contain a statement of 
the basis for that determination, with specific 
findings.
(iv) Notice if no hearing.--If an applicant 
does not make a timely request for a hearing under 
this subparagraph, the primary Federal payment 
stablecoin regulator shall notify the applicant, 
not later than 10 days after the date by which the 
applicant may

[[Page 139 STAT. 442]]

request a hearing under this subparagraph, in 
writing, that the denial of the application is a 
final determination of the primary Federal payment 
stablecoin regulator.
(3) Failure to render a decision.--If a primary Federal 
payment stablecoin regulator fails to render a decision on a 
complete application within the time period specified in 
paragraph (1), the application shall be deemed approved.
(4) Right to reapply.--The denial of an application under 
this section shall not prohibit the applicant from filing a 
subsequent application.

(e) Reports on Pending Applications.--Each primary Federal payment 
stablecoin regulator shall--
(1) notify Congress upon beginning to process applications 
under this Act; and
(2) annually report to Congress on the applications that 
have been pending for 180 days or more since the date the 
initial application was filed and for which the applicant has 
been informed that the application remains incomplete, including 
documentation on the status of such applications and why such 
applications have not yet been approved.

(f) <<NOTE: Waiver authority. Time period. Effective date.>> Safe 
Harbor for Pending Applications.--The primary Federal payment stablecoin 
regulators may waive the application of the requirements of this Act for 
a period not to exceed 12 months beginning on the effective date of this 
Act, with respect to--
(1) a subsidiary of an insured depository institution, if 
the insured depository institution has an application pending 
for the subsidiary to become a permitted payment stablecoin 
issuer on that effective date; or
(2) a Federal qualified payment stablecoin issuer with a 
pending application on that effective date.

(g) Rulemaking.--Consistent with section 13, the primary Federal 
payment stablecoin regulators shall issue rules necessary for the 
regulation of the issuance of payment stablecoins, but may not impose 
requirements in addition to the requirements specified under section 4.
(h) Relation to Other Licensing Requirements.--The provisions of 
this section supersede and preempt any State requirement for a charter, 
license, or other authorization to do business with respect to a Federal 
qualified payment stablecoin issuer or subsidiary of an insured 
depository institution or credit union that is approved under this 
section to be a permitted payment stablecoin issuer. Nothing in this 
subsection shall preempt or supersede the authority of a State to 
charter, license, supervise, or regulate an insured depository 
institution or credit union chartered in such State or to supervise a 
subsidiary of such insured depository institution or credit union that 
is approved under this section to be a permitted payment stablecoin 
issuer.
(i) Certification Required.--
(1) <<NOTE: Deadline. Time period.>> In general.--Not later 
than 180 days after the approval of an application, and on an 
annual basis thereafter, each permitted payment stablecoin 
issuer shall submit to its primary Federal payment stablecoin 
regulator, or in the case of a State qualified payment 
stablecoin issuer its State payment

[[Page 139 STAT. 443]]

stablecoin regulator, a certification that the issuer has 
implemented anti-money laundering and economic sanctions 
compliance programs that are reasonably designed to prevent the 
permitted payment stablecoin issuer from facilitating money 
laundering, in particular, facilitating money laundering for 
cartels and organizations designated as foreign terrorist 
organizations under section 219 of the Immigration and 
Nationality Act (8 U.S.C. 1189) and the financing of terrorist 
activities, consistent with the requirements of this Act.
(2) Availability of certifications.--Federal payment 
stablecoin regulators and State payment stablecoin regulators 
shall make certifications described in paragraph (1) available 
to the Secretary of Treasury upon request.
(3) Penalties.--
(A) Approval revocation.--The primary Federal 
payment stablecoin regulator or State payment stablecoin 
regulator of a permitted payment stablecoin issuer that 
does not submit a certification pursuant to paragraph 
(1) may revoke the approval of the payment stablecoin 
issuer under this section.
(B) Criminal penalty.--
(i) In general.--Any person that knowingly 
submits a certification pursuant to paragraph (1) 
that is false shall be subject to the criminal 
penalties set forth under section 1001 of title 
18, United States Code.
(ii) Referral to attorney general.--If a 
Federal payment stablecoin regulator or State 
payment stablecoin regulator has reason to believe 
that any person has knowingly violated paragraph 
(1), the applicable regulator may refer the matter 
to the Attorney General or to the attorney general 
of the payment stablecoin issuer's host State.
SEC. 6. <<NOTE: 12 USC 5905.>> SUPERVISION AND ENFORCEMENT WITH 
RESPECT TO FEDERAL QUALIFIED PAYMENT 
STABLECOIN ISSUERS AND SUBSIDIARIES OF INSURED 
DEPOSITORY INSTITUTIONS.

(a) Supervision.--
(1) In general.--Each permitted payment stablecoin issuer 
that is not a State qualified payment stablecoin issuer with a 
payment stablecoin with a consolidated total outstanding 
issuance of less than $10,000,000,000 shall be subject to 
supervision by the appropriate primary Federal payment 
stablecoin regulator.
(2) Submission of reports.--Each permitted payment 
stablecoin issuer described in paragraph (1) shall, upon 
request, submit to the appropriate primary Federal payment 
stablecoin regulator a report on--
(A) the financial condition of the permitted payment 
stablecoin issuer;
(B) the systems of the permitted payment stablecoin 
issuer for monitoring and controlling financial and 
operating risks;
(C) compliance by the permitted payment stablecoin 
issuer (and any subsidiary thereof) with this Act; and
(D) the compliance of the Federal qualified nonbank 
payment stablecoin issuer with the requirements of the

[[Page 139 STAT. 444]]

Bank Secrecy Act and with laws authorizing the 
imposition of sanctions and implemented by the Secretary 
of the Treasury.
(3) <<NOTE: Assessments.>> Examinations.--The appropriate 
primary Federal payment stablecoin regulator shall examine a 
permitted payment stablecoin issuer described in paragraph (1) 
in order to assess--
(A) the nature of the operations and financial 
condition of the permitted payment stablecoin issuer;
(B) the financial, operational, technological, and 
other risks associated within the permitted payment 
stablecoin issuer that may pose a threat to--
(i) the safety and soundness of the permitted 
payment stablecoin issuer; or
(ii) the stability of the financial system of 
the United States; and
(C) the systems of the permitted payment stablecoin 
issuer for monitoring and controlling the risks 
described in subparagraph (B).
(4) Requirements for efficiency.--
(A) Use of existing reports.--In supervising and 
examining a permitted payment stablecoin issuer under 
this subsection, a primary Federal payment stablecoin 
regulator shall, to the fullest extent possible, use 
existing reports and other supervisory information.
(B) Avoidance of duplication.--A primary Federal 
payment stablecoin regulator shall, to the fullest 
extent possible, avoid duplication of examination 
activities, reporting requirements, and requests for 
information in carrying out this subsection with respect 
to a permitted payment stablecoin issuer.
(C) Consideration of burden.--A primary Federal 
payment stablecoin regulator shall, with respect to any 
examination or request for the submission of a report 
under this subsection, only request examinations and 
reports at a cadence and in a format that is similar to 
that required for similarly situated entities regulated 
by the primary Federal payment stablecoin regulator.

(b) <<NOTE: Determinations.>> Enforcement.--
(1) Suspension or revocation of registration.--The primary 
Federal payment stablecoin regulator of a permitted payment 
stablecoin issuer that is not a State qualified payment 
stablecoin issuer with a payment stablecoin with a consolidated 
total outstanding issuance of less than $10,000,000,000 may 
prohibit the permitted payment stablecoin issuer from issuing 
payment stablecoins, if the primary Federal payment stablecoin 
regulator determines that such permitted payment stablecoin 
issuer, or an institution-affiliated party of the permitted 
payment stablecoin issuer is willfully or recklessly violating 
or has willfully or recklessly violated--
(A) this Act or any regulation or order issued under 
this Act; or
(B) any condition imposed in writing by the primary 
Federal payment stablecoin regulator in connection with 
a written agreement entered into between the permitted 
payment stablecoin issuer and the primary Federal 
payment stablecoin regulator.

[[Page 139 STAT. 445]]

(2) Cease-and-desist proceedings.--If the primary Federal 
payment stablecoin regulator of a permitted payment stablecoin 
issuer that is not a State qualified payment stablecoin issuer 
with a payment stablecoin with a consolidated total outstanding 
issuance of less than $10,000,000,000 has reasonable cause to 
believe that the permitted payment stablecoin issuer or any 
institution-affiliated party of the permitted payment stablecoin 
issuer is violating, has violated, or is attempting to violate 
this Act, any regulation or order issued under this Act, or any 
written agreement entered into with the primary Federal payment 
stablecoin regulator or condition imposed in writing by the 
primary Federal payment stablecoin regulator in connection with 
any application or other request, the primary Federal payment 
stablecoin regulator may, by provisions that are mandatory or 
otherwise, order the permitted payment stablecoin issuer or 
institution-affiliated party of the permitted payment stablecoin 
issuer to--
(A) cease and desist from such violation or 
practice; or
(B) take affirmative action to correct the 
conditions resulting from any such violation or 
practice.
(3) Removal and prohibition authority.--The primary Federal 
payment stablecoin regulator of a permitted payment stablecoin 
issuer that is not a State qualified payment stablecoin issuer 
may remove an institution-affiliated party of the permitted 
payment stablecoin issuer from the position or office of that 
institution-affiliated party or prohibit further participation 
in the affairs of the permitted payment stablecoin issuer or of 
all such permitted payment stablecoin issuers by that 
institution-affiliated party, if the primary Federal payment 
stablecoin regulator determines that--
(A) the institution-affiliated party has knowingly 
committed a violation or attempted violation of this Act 
or any regulation or order issued under this Act; or
(B) the institution-affiliated party has knowingly 
committed a violation of any provision of subchapter II 
of chapter 53 of title 31, United States Code.
(4) Procedures.--
(A) <<NOTE: Compliance.>> In general.--If a primary 
Federal payment stablecoin regulator identifies a 
violation or attempted violation of this Act or makes a 
determination under paragraph (1), (2), or (3), the 
primary Federal payment stablecoin regulator shall 
comply with the procedures set forth in subsections (b) 
and (e) of section 8 of the Federal Deposit Insurance 
Act (12 U.S.C. 1818) or subsections (e) and (g) of 
section 206 the Federal Credit Union Act (12 U.S.C. 
1786(e) and (g)), as applicable.
(B) Judicial review.--A person aggrieved by a final 
action under this subsection may obtain judicial review 
of such action exclusively as provided in section 8(h) 
of the Federal Deposit Insurance Act (12 U.S.C. 1818(h)) 
or section 206(j) of the Federal Credit Union Act (12 
U.S.C. 1786(j)), as applicable.
(C) Injunction.--A primary Federal payment 
stablecoin regulator may, at the discretion of the 
regulator, follow the procedures provided in section 
8(i)(1) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(i)(1)) or

[[Page 139 STAT. 446]]

section 206(k)(1) of the Federal Credit Union Act (12 
U.S.C. 1786(k)(1)), as applicable, for judicial 
enforcement of any effective and outstanding notice or 
order issued under this subsection.
(D) Temporary cease-and-desist proceedings.--If a 
primary Federal payment stablecoin regulator determines 
that a violation or attempted violation of this Act or 
an action with respect to which a determination was made 
under paragraph (1), (2), or (3), or the continuation 
thereof, is likely to cause insolvency or significant 
dissipation of assets or earnings of a permitted payment 
stablecoin issuer, or is likely to weaken the condition 
of the permitted payment stablecoin issuer or otherwise 
prejudice the interests of the customers of the 
permitted payment stablecoin issuer prior to the 
completion of the proceedings conducted under this 
paragraph, the primary Federal payment stablecoin 
regulator may follow the procedures provided in section 
8(c) of the Federal Deposit Insurance Act (12 U.S.C. 
1818(c)) or section 206(f) of the Federal Credit Union 
Act (12 U.S.C. 1786(f)), as applicable, to issue a 
temporary cease and desist order.
(5) Civil money penalties.--Unless otherwise specified in 
this Act, the civil money penalties for violations of this Act 
consist of the following:
(A) Failure to be approved.--Any person that issues 
a United States dollar-denominated payment stablecoin in 
violation of section 3, and any institution-affiliated 
party of such a person who knowingly participates in 
issuing such a payment stablecoin, shall be liable for a 
civil penalty of not more than $100,000 for each day 
during which such payment stablecoins are issued.
(B) First tier.--Except as provided in subparagraph 
(A), a permitted payment stablecoin issuer or 
institution-affiliated party of such permitted payment 
stablecoin issuer that materially violates this Act or 
any regulation or order issued under this Act, or that 
materially violates any condition imposed in writing by 
the appropriate primary Federal payment stablecoin 
regulator in connection with a written agreement entered 
into between the permitted payment stablecoin issuer and 
that primary Federal payment stablecoin regulator, shall 
be liable for a civil penalty of not more than $100,000 
for each day during which the violation continues.
(C) Second tier.--Except as provided in subparagraph 
(A), and in addition to the penalties described in 
subparagraph (B), a permitted payment stablecoin issuer 
or institution-affiliated party of such permitted 
payment stablecoin issuer who knowingly participates in 
a violation of any provision of this Act, or any 
regulation or order issued under this Act, shall be 
liable for a civil penalty of not more than an 
additional $100,000 for each day during which the 
violation continues.
(D) Procedure.--Any penalty imposed under this 
paragraph may be assessed and collected by the 
appropriate primary Federal payment stablecoin regulator 
pursuant to the procedures set forth in section 8(i)(2) 
of the Federal Deposit Insurance Act (12 U.S.C. 
1818(i)(2)) or

[[Page 139 STAT. 447]]

section 206(k)(2) of the Federal Credit Union Act (12 
U.S.C. 1786(k)(2)), as applicable.
(E) Notice and orders after separation from 
service. <<NOTE: Time period.>> --The resignation, 
termination of employment or participation, or 
separation of an institution-affiliated party (including 
a separation caused by the closing of a permitted 
payment stablecoin issuer) shall not affect the 
jurisdiction and authority of a primary Federal payment 
stablecoin regulator to issue any notice or order and 
proceed under this subsection against any such party, if 
such notice or order is served before the end of the 6-
year period beginning on the date on which such party 
ceased to be an institution-affiliated party with 
respect to such permitted payment stablecoin issuer.
(6) Non-applicability to a state qualified payment 
stablecoin issuer.--Notwithstanding anything in this subsection 
to the contrary, this subsection shall not apply to a State 
qualified payment stablecoin issuer.

(c) Rule of Construction.--Nothing in this Act may be construed to 
modify or otherwise affect any right or remedy under any Federal 
consumer financial law, including 12 U.S.C. 5515 and 15 U.S.C. 41 et 
seq.
SEC. 7. <<NOTE: 12 USC 5906.>> STATE QUALIFIED PAYMENT STABLECOIN 
ISSUERS.

(a) In General.--A State payment stablecoin regulator shall have 
supervisory, examination, and enforcement authority over all State 
qualified payment stablecoin issuers of such State.
(b) Authority To Enter Into Agreements With the 
Board. <<NOTE: Memorandum.>> --A State payment stablecoin regulator may 
enter into a memorandum of understanding with the Board, by mutual 
agreement, under which the Board may participate in the supervision, 
examination, and enforcement of this Act with respect to the State 
qualified payment stablecoin issuers of such State.

(c) <<NOTE: Records.>> Sharing of Information.--A State payment 
stablecoin regulator and the Board shall share information on an ongoing 
basis with respect to a State qualified payment stablecoin issuer of 
such State, including a copy of the initial application and any 
accompanying documents.

(d) Rulemaking.--A State payment stablecoin regulator may issue 
orders and rules under section 4 applicable to State qualified payment 
stablecoin issuers to the same extent as the primary Federal payment 
stablecoin regulators issue orders and rules under section 4 applicable 
to permitted payment stablecoin issuers that are not State qualified 
payment stablecoin issuers.
(e) Enforcement Authority in Unusual and Exigent Circumstances.--
(1) Board.--
(A) <<NOTE: Time period. Notice.>> In general.--
Subject to subparagraph (C), under unusual and exigent 
circumstances that the Board determines to exist, the 
Board may, after not less than 48 hours' prior written 
notice to the applicable State payment stablecoin 
regulator, take an enforcement action against a State 
qualified payment stablecoin issuer or an institution-
affiliated party of such issuer for violations of this 
Act during such unusual and exigent circumstances.
(B) Rulemaking.--Consistent with section 13, the 
Board shall issue rules to set forth the unusual and 
exigent

[[Page 139 STAT. 448]]

circumstances in which the Board may act under this 
paragraph.
(C) <<NOTE: Determination.>> Limitations.--If, 
after unusual and exigent circumstances are determined 
to exist pursuant to subparagraph (A), the Board 
determines that there is reasonable cause to believe 
that the continuation by a State qualified payment 
stablecoin issuer of any activity constitutes a serious 
risk to the financial safety, soundness, or stability of 
the State qualified payment stablecoin issuer, the Board 
may impose such restrictions as the Board determines to 
be necessary to address such risk during such unusual 
and exigent circumstances, which may include limitations 
on redemptions of payment stablecoins, and which shall 
be issued in the form of a directive, with the effect of 
a cease and desist order that has become final, to the 
State qualified payment stablecoin issuer and any of its 
affiliates, limiting--
(i) transactions between the State qualified 
payment stablecoin issuer, a holding company, and 
the subsidiaries or affiliates of either the State 
qualified payment stablecoin issuer or the holding 
company; and
(ii) any activities of the State qualified 
payment stablecoin issuer that might create a 
serious risk that the liabilities of a holding 
company and the affiliates of the holding company 
may be imposed on the State qualified payment 
stablecoin issuer.
(D) Review of directive.--
(i) Administrative review.--
(I) In general.--After a directive 
described in subparagraph (C) is issued, 
the applicable State qualified payment 
stablecoin issuer, or any institution-
affiliated party of the State qualified 
payment stablecoin issuer subject to the 
directive, may object and present to the 
Board, in writing, the reasons why the 
directive should be modified or 
rescinded.
(II) <<NOTE: Deadline.>> Automatic 
lapse of directive.--If, after 10 days 
after the receipt of a response 
described in subclause (I), the Board 
does not affirm, modify, or rescind the 
directive, the directive shall 
automatically lapse.
(ii) Judicial review.--
(I) In general.--If the Board 
affirms or modifies a directive pursuant 
to clause (i), any affected party may 
immediately thereafter petition the 
United States district court for the 
district in which the main office of the 
affected party is located, or in the 
United States District Court for the 
District of Columbia, to stay, modify, 
terminate, or set aside the directive.
(II) Relief for extraordinary 
cause.--Upon a showing of extraordinary 
cause, an affected party may petition 
for relief under subclause (I) without 
first pursuing or exhausting the 
administrative remedies under clause 
(i).
(2) Comptroller.--

[[Page 139 STAT. 449]]

(A) <<NOTE: Deadline. Notice.>> In general.--
Subject to subparagraph (C), under unusual and exigent 
circumstances determined to exist by the Comptroller, 
the Comptroller shall, after not less than 48 hours' 
prior written notice to the applicable State payment 
stablecoin regulator, take an enforcement action against 
a State qualified payment stablecoin issuer that is a 
nonbank entity for violations of this Act.
(B) Rulemaking.--Consistent with section 13, the 
Comptroller shall issue rules to set forth the unusual 
and exigent circumstances in which the Comptroller may 
act under this paragraph.
(C) <<NOTE: Determination.>> Limitations.--If, 
after unusual and exigent circumstances are determined 
to exist under subparagraph (A), the Comptroller 
determines that there is reasonable cause to believe 
that the continuation of any activity by a State 
qualified payment stablecoin issuer that is a nonbank 
entity constitutes a serious risk to the financial 
safety, soundness, or stability of the State qualified 
payment stablecoin issuer that is a nonbank entity, the 
Comptroller shall impose such restrictions as the 
Comptroller determines to be necessary to address such 
risk during such unusual and exigent circumstances, 
which may include limitations on redemption of payment 
stablecoins, and which shall be issued in the form of a 
directive, with the effect of a cease and desist order 
that has become final, to the State qualified payment 
stablecoin issuer that is a nonbank entity and any of 
its affiliates, limiting--
(i) transactions between the State qualified 
payment stablecoin issuer, a holding company, and 
the subsidiaries or affiliates of either the State 
qualified payment stablecoin issuer or the holding 
company; and
(ii) any activities of the State qualified 
payment stablecoin issuer that might create a 
serious risk that the liabilities of a holding 
company and the affiliates of the holding company 
may be imposed on the State qualified payment 
stablecoin issuer.
(D) Review of directive.--
(i) Administrative review.--
(I) In general.--After a directive 
described in subparagraph (C) is issued, 
the applicable Federal qualified payment 
stablecoin issuer, or any institution-
affiliated party of the Federal 
qualified payment stablecoin issuer 
subject to the directive, may object and 
present to the Comptroller, in writing, 
the reasons that the directive should be 
modified or rescinded.
(II) <<NOTE: Deadline.>> Automatic 
lapse of directive.--If, after 10 days 
after the receipt of a response 
described in subclause (I), the 
Comptroller does not affirm, modify, or 
rescind the directive, the directive 
shall automatically lapse.
(ii) Judicial review.--
(I) In general.--If the Comptroller 
affirms or modifies a directive pursuant 
to clause (i), any affected party may 
immediately thereafter petition the 
United States district court for the 
district in which the main office of the 
affected party is

[[Page 139 STAT. 450]]

located, or in the United States 
District Court for the District of 
Columbia, to stay, modify, terminate, or 
set aside the directive.
(II) Relief for extraordinary 
cause.--Upon a showing of extraordinary 
cause, an affected party may petition 
for relief under subclause (I) without 
first pursuing or exhausting the 
administrative remedies under clause 
(i).

(f) Effect on State Law.--
(1) <<NOTE: Applicability.>> Host state law.--
Notwithstanding any other provision of law, the laws of a host 
State, including laws relating to consumer protection, shall 
only apply to the activities conducted in the host State by an 
out-of-State State qualified payment stablecoin issuer to the 
same extent as such laws apply to the activities conducted in 
the host State by an out-of-State Federal qualified payment 
stablecoin issuer.
(2) Home state law.--If any host State law is determined not 
to apply under paragraph (1), the laws of the home State of the 
State qualified payment stablecoin issuer shall govern the 
activities of the permitted payment stablecoin issuer conducted 
in the host State.
(3) Applicability.--
(A) In general.--This subsection shall only apply to 
an out-of-State State qualified payment stablecoin 
issuer chartered, licensed, or otherwise authorized to 
do business by a State that has a certification in place 
pursuant to section 4(c) of this Act.
(B) Exclusion.--The laws applicable to an out-of-
State qualified payment stablecoin issuer under 
paragraph (1) exclude host State laws governing the 
chartering, licensure, or other authorization to do 
business in the host State as a permitted payment 
stablecoin issuer pursuant to this Act.
(4) Rule of construction.--Except for State laws relating to 
the chartering, licensure, or other authorization to do business 
as a permitted payment stablecoin issuer, nothing in this Act 
shall preempt State consumer protection laws, including common 
law, and the remedies available thereunder.
SEC. 8. <<NOTE: 12 USC 5907.>> ANTI-MONEY LAUNDERING PROTECTIONS.

(a) Payment Stablecoins Issued by a Foreign Payment Stablecoin 
Issuer.--
(1) <<NOTE: Compliance.>> In general.--A payment stablecoin 
that is issued by a foreign payment stablecoin issuer may not be 
publicly offered, sold, or otherwise made available for trading 
in the United States by a digital asset service provider unless 
the foreign payment stablecoin issuer has the technological 
capability to comply and complies with the terms of any lawful 
order.
(2) Enforcement.--
(A) Authority.--The Secretary of the Treasury shall 
have the authority to designate any foreign issuer that 
publicly offers, sells, or otherwise makes available a 
payment stablecoin in violation of paragraph (1) as 
noncompliant.
(B) <<NOTE: Deadline. Notification.>> Designation 
as noncompliant.--Not later than 30 days after the 
Department of the Treasury has identified a foreign 
payment stablecoin issuer of any payment

[[Page 139 STAT. 451]]

stablecoin trading in the United States that is in 
violation of paragraph (1), the Secretary of the 
Treasury, in coordination with relevant Federal 
agencies, may, pursuant to the authority under 
subparagraph (A), designate the foreign payment 
stablecoin issuer as noncompliant and notify the foreign 
payment stablecoin issuer in writing of the designation.
(3) Appeal.--A determination of noncompliance under this 
subsection is subject to judicial review in the United States 
Court of Appeals for the District of Columbia Circuit.

(b) <<NOTE: Federal Register, 
publication. Determinations. Statements.>> Publication of Designation; 
Prohibition on Secondary Trading.--
(1) <<NOTE: Compliance. Deadline.>> In general.--If a 
foreign payment stablecoin issuer does not come into compliance 
with the lawful order within 30 days from the date of issuance 
of the written notice described in subsection (a), except as 
provided in subsection (c), the Secretary 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 to 
comply with the lawful order after the written notice; 
and
(B) <<NOTE: Notification.>> issue a notification in 
the Federal Register prohibiting digital asset service 
providers from facilitating secondary trading of payment 
stablecoins issued by the foreign payment stablecoin 
issuer in the United States.
(2) Effective date of prohibition.--The prohibition on 
facilitation of secondary trading described in paragraph (1) 
shall become effective on the date that is 30 days after the 
date of issue of notification of the prohibition in the Federal 
Register.
(3) Expiration of prohibition.--
(A) In general.--The prohibition on facilitation of 
secondary trading described in paragraph (1)(B) shall 
expire upon the Secretary of the Treasury's 
determination that the foreign payment stablecoin issuer 
is no longer noncompliant.
(B) <<NOTE: Criteria.>> Rulemaking.--Consistent 
with section 13, the Secretary of the Treasury shall 
specify the criteria that a noncompliant foreign issuer 
must meet for the Secretary of the Treasury to determine 
that the foreign payment stablecoin issuer is no longer 
noncompliant.
(C) Publication.--Upon a determination under 
subparagraph (A), the Secretary of the Treasury shall 
publish the determination in the Federal Register, 
including a statement detailing how the foreign payment 
stablecoin issuer has met the criteria described in 
subparagraph (B).
(4) Civil monetary penalties.--The Secretary of the Treasury 
may impose a civil monetary penalty as follows:
(A) Digital asset service providers.--Any digital 
asset service provider that knowingly violates a 
prohibition under paragraph (1)(B) shall be subject to a 
civil monetary penalty of not more than $100,000 per 
violation per day.
(B) Foreign payment stablecoin issuers.--Any foreign 
payment stablecoin issuer that knowingly continues to 
publicly offer a payment stablecoin in the United States 
after publication of the determination of noncompliance 
under paragraph (1)(A) shall be subject to a civil 
monetary

[[Page 139 STAT. 452]]

penalty of not more than $1,000,000 per violation per 
day, and the Secretary of the Treasury may seek an 
injunction in a district court of the United States to 
bar the foreign payment stablecoin issuer from engaging 
in financial transactions in the United States or with 
United States persons.
(C) Determination of the number of violations.--For 
purposes of determining the number of violations for 
which to impose a penalty under subparagraph (A) or (B), 
separate acts of noncompliance are a single violation 
when the acts are the result of a common or 
substantially overlapping originating cause. 
Notwithstanding the foregoing, the Secretary 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 laundering, 
financing of terrorism, or sanctions evasion 
requirements.
(D) Commencement of civil actions.--The Secretary of 
the Treasury may commence a civil action against a 
foreign payment stablecoin issuer in a district court of 
the United States to--
(i) recover a civil monetary penalty assessed 
under subparagraph (A) or (B);
(ii) seek an injunction to bar the foreign 
payment stablecoin issuer from engaging in 
financial transactions in the United States or 
with United States persons; or
(iii) seek an injunction to stop a digital 
asset service provider from offering on the 
platform of the digital asset service provider 
payment stablecoins issued by the foreign payment 
stablecoin issuer.

(c) <<NOTE: Determinations.>> Waiver and Licensing Authority 
Exemptions.--
(1) In general.--The Secretary of the Treasury may offer a 
waiver, general license, or specific license to any United 
States person engaging in secondary trading described in 
subsection (b)(1)(B) on a case-by-case basis if the Secretary 
determines that--
(A) prohibiting secondary trading would adversely 
affect the financial system of the United States; or
(B) the foreign payment stablecoin issuer is taking 
tangible steps to remedy the failure to comply with the 
lawful order that resulted in the noncompliance 
determination under subsection (a).
(2) National security waiver.--The Secretary of the 
Treasury, in consultation with the Director of National 
Intelligence and the Secretary of State, may waive the 
application of the secondary trading restrictions under 
subsection (b)(1)(B) if the Secretary of the Treasury determines 
that the waiver is in the national security interest of the 
United States.
(3) Waiver for intelligence and law enforcement 
activities.--The head of a department or agency may waive the 
application of this section with respect to--
(A) activities subject to the reporting requirements 
under title V of the National Security Act of 1947 (50 
U.S.C. 3091 et seq.), or any authorized intelligence 
activities of the United States; or

[[Page 139 STAT. 453]]

(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), (2), or (3), the 
Secretary of the Treasury shall submit to the chairs and ranking 
members of the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of the 
House of Representatives, a report, 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 Act shall be construed as 
altering the existing authority of the Secretary of the Treasury to 
block, restrict, or limit transactions involving payment stablecoins 
that reference or are denominated in United States dollars that are 
subject to the jurisdiction of the United States.
SEC. 9. <<NOTE: 12 USC 5908.>> ANTI-MONEY LAUNDERING INNOVATION.

(a) <<NOTE: Effective date. Time period.>> Public Comment.--
Beginning on the date that is 30 days after the date of enactment of 
this Act, and for a period of 60 days thereafter, the Secretary of the 
Treasury shall seek public comment to identify innovative or novel 
methods, techniques, or strategies that regulated financial institutions 
use, or have the potential to use, to detect illicit activity, such as 
money laundering, involving digital assets, including comments with 
respect to--
(1) application program interfaces;
(2) artificial intelligence;
(3) digital identify verification; and
(4) use of blockchain technology and monitoring.

(b) Treasury Research.--
(1) In general.--Upon completion of the public comment 
period described in subsection (a), the Secretary of the 
Treasury shall conduct research on the innovative or novel 
methods, techniques, or strategies that regulated financial 
institutions use, or have the potential to use, to detect 
illicit activity, such as money laundering, involving digital 
assets that were identified in such public comment period.
(2) <<NOTE: Evaluation.>> Research factors.--With respect 
to each innovative or novel method, technique, or strategy 
described in paragraph (1), the Financial Crimes Enforcement 
Network shall evaluate and consider the following factors 
against existing methods, techniques, or strategies:
(A) Improvements in the ability of financial 
institutions to detect illicit activity involving 
digital assets.
(B) Costs to regulated financial institutions.
(C) The amount and sensitivity of information that 
is collected or reviewed.
(D) Privacy risks associated with the information 
that is collected or reviewed.
(E) Operational challenges and efficiency 
considerations.
(F) Cybersecurity risks.
(G) Effectiveness of methods, techniques, or 
strategies at mitigating illicit finance.

(c) Treasury Risk Assessment.--As part of the national strategy for 
combating terrorist and other illicit financing required

[[Page 139 STAT. 454]]

under sections 261 and 262 of the Countering America's Adversaries 
Through Sanctions Act (Public Law 115-44; 131 Stat. 934), the Secretary 
of the Treasury shall consider--
(1) the source of illicit activity, such as money laundering 
and sanctions evasion involving digital assets;
(2) the effectiveness of and gaps in existing methods, 
techniques, and strategies used by regulated financial 
institutions in detecting illicit activity, such as money 
laundering, involving digital assets;
(3) the impact of existing regulatory frameworks on the use 
and development of innovative methods, techniques, or strategies 
by regulated financial institutions; and
(4) any foreign jurisdictions that pose a high risk of 
facilitating illicit activity through the use of digital assets 
to obtain fiat currency.

(d) <<NOTE: Deadline. Notice.>> FinCEN Guidance or Rulemaking.--Not 
later than 3 years after the date of enactment of this Act, the 
Financial Crimes Enforcement Network shall issue public guidance and 
notice and comment rulemaking, based on the results of the research and 
risk assessments required under this section, relating to the following:
(1) The implementation of innovative or novel methods, 
techniques, or strategies by regulated financial institutions to 
detect illicit activity involving digital assets.
(2) Standards for payment stablecoin issuers to identify and 
report illicit activity involving the payment stablecoin of a 
permitted payment stablecoin issuer, including, fraud, 
cybercrime, money laundering, financing of terrorism, sanctions 
evasion, or insider trading.
(3) Standards for payment stablecoin issuers' systems and 
practices to monitor transactions on blockchains, digital asset 
mixing services, tumblers, or other similar services that mix 
payment stablecoins in such a way as to make such transaction or 
the identity of the transaction parties less identifiable.
(4) Tailored risk management standards for financial 
institutions interacting with decentralized finance protocols.

(e) Recommendations and Report to Congress.--
(1) In general.--Not later than 180 days after the date of 
enactment of this Act, the Secretary of the Treasury shall 
submit to the chairs and ranking members of the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives 
a report on--
(A) legislative and regulatory proposals to allow 
regulated financial institutions to develop and 
implement novel and innovative methods, techniques, or 
strategies to detect illicit activity, such as money 
laundering and sanctions evasion, involving digital 
assets;
(B) the results of the research and risk assessments 
conducted pursuant to this section;
(C) efforts to support the ability of financial 
institutions to implement novel and innovative methods, 
techniques, or strategies to detect illicit activity, 
such as money laundering and sanctions evasion, 
involving digital assets;
(D) the extent to which transactions on distributed 
ledgers, digital asset mixing services, tumblers, or 
other similar services that mix payment stablecoins in 
such a

[[Page 139 STAT. 455]]

way as to make such transaction or the identity of the 
transaction parties less identifiable may facilitate 
illicit activity; and
(E) legislative recommendations relating to the 
scope of the term ``digital asset service provider'' and 
the application of that term to decentralized finance.
(2) Classified annex.--A report under this section may 
include a classified annex, if applicable.

(f) Rule of Construction.--Nothing in this section shall be 
construed to limit the existing authority of the Secretary of the 
Treasury or the primary Federal payment stablecoin regulators to, prior 
to the submission of a report required under this section, use existing 
exemptive authorities, the no-action letter process, or rulemaking 
authorities in a manner that encourages regulated financial institutions 
to adopt novel or innovative methods, techniques, or strategies to 
detect illicit activity, such as money laundering, involving digital 
assets.
SEC. 10. <<NOTE: 12 USC 5909.>> CUSTODY OF PAYMENT STABLECOIN 
RESERVE AND COLLATERAL.

(a) In General.--A person may only engage in the business of 
providing custodial or safekeeping services for the payment stablecoin 
reserve, the payment stablecoins used as collateral, or the private keys 
used to issue permitted payment stablecoins if the person--
(1) is subject to--
(A) supervision or regulation by a primary Federal 
payment stablecoin regulator or a primary financial 
regulatory agency described under subparagraph (B) or 
(C) of section 2(12) of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (12 U.S.C. 5301(12)); 
or
(B) supervision by a State bank supervisor, as 
defined under section 3 of the Federal Deposit Insurance 
Act (12 U.S.C. 1813), or a State credit union 
supervisor, as defined under section 6003 of the Anti-
Money Laundering Act of 2020 (31 U.S.C. 5311 note), and 
such State bank supervisor or State credit union 
supervisor makes available to the Board such information 
as the Board determines necessary and relevant to the 
categories of information under subsection (d); and
(2) <<NOTE: Compliance.>> complies with the requirements 
under subsection (b), unless such person holds such property in 
accordance with similar requirements as required by a primary 
Federal payment stablecoin regulator, the Securities and 
Exchange Commission, or the Commodity Futures Trading 
Commission.

(b) Customer Property Requirement.--A person described in subsection 
(a) shall, with respect to other property described in that subsection--
(1) treat and deal with the payment stablecoins, private 
keys, cash, and other property of a person for whom or on whose 
behalf the person described in that subsection receives, 
acquires, or holds payment stablecoins, private keys, cash, and 
other property (hereinafter referred to in this section as the 
``customer'') as belonging to such customer and not as the 
property of such person; and

[[Page 139 STAT. 456]]

(2) take such steps as are appropriate to protect the 
payment stablecoins, private keys, cash, and other property of a 
customer from the claims of creditors of the person.

(c) Commingling Prohibited.--
(1) In general.--Payment stablecoin reserves, payment 
stablecoins, cash, and other property of a permitted payment 
stablecoin issuer or customer shall be separately accounted for 
by a person described in subsection (a) and shall be segregated 
from and not be commingled with the assets of the person.
(2) Exceptions.--Notwithstanding paragraph (1) or subsection 
(b)--
(A) the payment stablecoin reserves, payment 
stablecoins, cash, and other property of a permitted 
payment stablecoin issuer or customer may, for 
convenience, be commingled and deposited in an omnibus 
account holding the payment stablecoin reserves, payment 
stablecoins, cash, and other property of more than 1 
permitted payment stablecoin issuer or customer at a 
State chartered depository institution, an insured 
depository institution, national bank, or trust company, 
and any payment stablecoin reserves in the form of cash 
held in the form of a deposit liability at a depository 
institution shall not be subject to any requirement 
relating to the separation of such cash from the 
property of the applicable depository institution;
(B) such share of the payment stablecoin reserves, 
payment stablecoins, cash, and other property of the 
permitted payment stablecoin issuer or customer that 
shall be necessary to transfer, adjust, or settle a 
transaction or transfer of assets may be withdrawn and 
applied to such purposes, including the payment of 
commissions, taxes, storage, and other charges lawfully 
accruing in connection with the provision of services by 
a person described in subsection (a);
(C) in accordance with such terms and conditions as 
a primary Federal payment stablecoin regulator may 
prescribe by rule, regulation, or order, any payment 
stablecoin reserves, payment stablecoins, cash, and 
other property described in this subsection may be 
commingled and deposited in permitted payment stablecoin 
issuer or customer accounts with payment stablecoin 
reserves, payment stablecoins, cash, and other property 
received by the person and required by the primary 
Federal payment stablecoin regulator to be separately 
accounted for, treated as, and dealt with as belonging 
to such permitted payment stablecoin issuers or 
customers; or
(D) an insured depository institution that provides 
custodial or safekeeping services for payment stablecoin 
reserves shall be permitted to hold payment stablecoin 
reserves in the form of cash on deposit provided such 
treatment is consistent with Federal law.
(3) <<NOTE: Claims.>> Customer priority.--With respect to 
payment stablecoins held by a person described in subsection (a) 
for a customer, with or without the segregation required under 
paragraph (1), the claims of the customer against such person 
with respect to such payment stablecoins shall have priority

[[Page 139 STAT. 457]]

over the claims of any person other than the claims of another 
customer with respect to payment stablecoins held by such person 
described in subsection (a), unless the customer expressly 
consents to the priority of such other claim.

(d) Regulatory Information.--A person described under subsection (a) 
shall submit to the applicable primary Federal payment stablecoin 
regulator information concerning the person's business operations and 
processes to protect customer assets, in such form and manner as the 
primary regulator shall determine.
(e) Exclusion.--The requirements of this section shall not apply to 
any person solely on the basis that such person engages in the business 
of providing hardware or software to facilitate a customer's own custody 
or safekeeping of the customer's payment stablecoins or private keys.
SEC. 11. TREATMENT OF PAYMENT STABLECOIN ISSUERS IN INSOLVENCY 
PROCEEDINGS.

(a) <<NOTE: Claims. 12 USC 5910.>> In General.--Subject to section 
507(e) of title 11, United States Code, as added by subsection (d), in 
any insolvency proceeding of a permitted payment stablecoin issuer under 
Federal or State law, including any proceeding under that title and any 
insolvency proceeding administered by a State payment stablecoin 
regulator with respect to a permitted payment stablecoin issuer--
(1) the claim of a person holding payment stablecoins issued 
by the permitted payment stablecoin issuer shall have priority, 
on a ratable basis with the claims of other persons holding such 
payment stablecoins, over the claims of the permitted payment 
stablecoin issuer and any other holder of claims against the 
permitted payment stablecoin issuer, with respect to required 
payment stablecoin reserves;
(2) notwithstanding any other provision of law, including 
the definition of ``claim'' under section 101(5) of title 11, 
United States Code, any person holding a payment stablecoin 
issued by the permitted payment stablecoin issuer shall be 
deemed to hold a claim; and
(3) the priority under paragraph (1) shall not apply to 
claims other than those arising directly from the holding of 
payment stablecoins.

(b) Definitions.--Section 101 of title 11, United States Code, is 
amended by adding after paragraph (40B) the following:
``(40C) The terms `payment stablecoin' and `permitted 
payment stablecoin issuer' have the meanings given those terms 
in section 2 of the GENIUS Act.''.

(c) Automatic Stay.--Section 362 of title 11, United States Code, is 
amended--
(1) in subsection (a)--
(A) in paragraph (7), by striking ``and'';
(B) in paragraph (8), by striking the period and 
inserting ``; and''; and
(C) by adding at the end the following:
``(9) the redemption of payment stablecoins issued by the 
permitted payment stablecoin issuer, from payment stablecoin 
reserves required to be maintained under section 4 of the GENIUS 
Act.''; and
(2) in subsection (d)--
(A) in paragraph (3)(B)(ii), by striking ``or'' at 
the end;

[[Page 139 STAT. 458]]

(B) in paragraph (4)(B), by striking the period at 
the end and inserting ``; or''; and
(C) by inserting after paragraph (4) the following:
``(5) <<NOTE: Courts. Distributions. Deadline.>> with 
respect to the redemption of payment stablecoins held by a 
person, if the court finds, subject to the motion and 
attestation of the permitted payment stablecoin issuer, which 
shall be filed on the petition date or as soon as practicable 
thereafter, there are payment stablecoin reserves available for 
distribution on a ratable basis to similarly situated payment 
stablecoin holders, provided that the court shall use best 
efforts to enter a final order to begin distributions under this 
paragraph not later than 14 days after the date of the required 
hearing.''.

(d) Priority in Bankruptcy Proceedings.--Section 507 of title 11, 
United States Code, is amended--
(1) in subsection (a), in the matter preceding paragraph 
(1), by striking ``The following'' and inserting ``Subject to 
subsection (e), the following''; and
(2) by adding at the end the following:

``(e) <<NOTE: Claims.>> Notwithstanding subsection (a), if a 
payment stablecoin holder is not able to redeem all outstanding payment 
stablecoin claims from required payment stablecoin reserves maintained 
by the permitted payment stablecoin issuer, any such remaining claim 
arising from a person's holding of a payment stablecoin issued by the 
permitted payment stablecoin issuer shall be a claim against the estate 
and shall have first priority over any other claim, including over any 
expenses and claims that have priority under that subsection, to the 
extent compliance with section 4 of the GENIUS Act would have required 
additional reserves to be maintained by the permitted payment stablecoin 
issuer for payment stablecoin holders.''.

(e) Payment Stablecoin Reserves.--Section 541(b) of title 11, United 
States Code, is amended--
(1) in paragraph (9), in the matter following subparagraph 
(B), by striking ``or'' at the end;
(2) in paragraph (10)(C), by striking the period and 
inserting ``; or''; and
(3) by inserting after paragraph (10) the following:
``(11) <<NOTE: Applicability.>> required payment stablecoin 
reserves under section 4 of the GENIUS Act, provided that 
notwithstanding the exclusion of such reserves from the property 
of the estate, section 362 of this title shall apply to such 
reserves.''.

(f) Intervention.--Section 1109 of title 11, United States Code, is 
amended by adding at the end the following:
``(c) The Comptroller of the Currency or State payment stablecoin 
regulator (as defined in section 2 of the GENIUS Act) shall raise, and 
shall appear and be heard on, any issue, including the protection of 
customers, in a case under this chapter in which the debtor is a 
permitted payment stablecoin issuer.''.
(g) <<NOTE: 12 USC 5911.>> Application of Existing Insolvency 
Law.--In accordance with otherwise applicable law, an insolvency 
proceeding with respect to a permitted payment stablecoin issuer shall 
occur as follows:
(1) A depository institution (as defined in section 3 of the 
Federal Deposit Insurance Act (12 U.S.C. 1813)) shall be 
resolved by the Federal Deposit Insurance Corporation,

[[Page 139 STAT. 459]]

National Credit Union Administration, or State payment 
stablecoin regulator, as applicable.
(2) A subsidiary of a depository institution (as defined in 
section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) 
or a nonbank entity may be considered a debtor under title 11, 
United States Code.

(h) Study by Primary Federal Payment Stablecoin Regulators.--
(1) Study required.--The primary Federal payment stablecoin 
regulators shall perform a study of the potential insolvency 
proceedings of permitted payment stablecoin issuers, including 
an examination of--
(A) existing gaps in the bankruptcy laws and rules 
for permitted payment stablecoin issuers;
(B) the ability of payment stablecoin holders to be 
paid out in full in the event a permitted payment 
stablecoin issuer is insolvent; and
(C) the utility of orderly insolvency administration 
regimes and whether any additional authorities are 
needed to implement such regimes.
(2) Report.--Not later than 3 years after the date of 
enactment of this Act, the primary Federal payment stablecoin 
regulators shall submit to the Committee on Banking, Housing, 
and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representatives a report that contains 
all findings of the study under paragraph (1), including any 
legislative recommendations.
SEC. 12. <<NOTE: 12 USC 5912.>> INTEROPERABILITY STANDARDS.

The <<NOTE: Assessment.>> primary Federal payment stablecoin 
regulators, in consultation with the National Institute of Standards and 
Technology, other relevant standard-setting organizations, and State 
bank and credit union regulators, shall assess and, if necessary, may, 
pursuant to section 553 of title 5, United States Code, and in a manner 
consistent with the National Technology Transfer and Advancement Act of 
1995 (Public Law 104-113), prescribe standards for permitted payment 
stablecoin issuers to promote compatibility and interoperability with--
(1) other permitted payment stablecoin issuers; and
(2) the broader digital finance ecosystem, including 
accepted communications protocols and blockchains, permissioned 
or public.
SEC. 13. <<NOTE: 12 USC 5913.>> RULEMAKING.

(a) <<NOTE: Deadline. Notice.>> In General.--Not later than 1 year 
after the date of enactment of this Act, each primary Federal payment 
stablecoin regulator, the Secretary of the Treasury, and each State 
payment stablecoin regulator shall promulgate regulations to carry out 
this Act through appropriate notice and comment rulemaking.

(b) Coordination.--Federal payment stablecoin regulators, the 
Secretary of the Treasury, and State payment stablecoin regulators 
should coordinate, as appropriate, on the issuance of any regulations to 
implement this Act.
(c) Report Required.--Not later than 180 days after the effective 
date of this Act, each Federal banking agency shall submit to the 
Committee on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House

[[Page 139 STAT. 460]]

of Representatives a report that confirms and describes the regulations 
promulgated to carry out this Act.
SEC. 14. STUDY ON NON-PAYMENT STABLECOINS.

(a) Study by Treasury.--
(1) Study.--The Secretary of the Treasury, in consultation 
with the Board, the Comptroller, the Corporation, the Securities 
and Exchange Commission, and the Commodity Futures Trading 
Commission shall carry out a study of non-payment stablecoins, 
including endogenously collateralized payment stablecoins.
(2) Report.--Not later than 365 days after the date of the 
enactment of this Act, the Secretary of the Treasury shall 
provide to the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services of the 
House of Representatives a report that contains all findings 
made in carrying out the study under paragraph (1), including an 
analysis of--
(A) the categories of non-payment stablecoins, 
including the benefits and risks of technological design 
features;
(B) the participants in non-payment stablecoin 
arrangements;
(C) utilization and potential utilization of non-
payment stablecoins;
(D) the nature of reserve compositions;
(E) types of algorithms being employed;
(F) governance structure, including aspects of 
decentralization;
(G) the nature of public promotion and advertising; 
and
(H) the clarity and availability of consumer notices 
disclosures.
(3) Classified annex.--A report under this section may 
include a classified annex, if applicable.

(b) Endogenously Collateralized Payment Stablecoin Defined.--In this 
section, the term ``endogenously collateralized payment stablecoin'' 
means any digital asset--
(1) the originator of which has represented will be 
converted, redeemed, or repurchased for a fixed amount of 
monetary value; and
(2) that relies solely on the value of another digital asset 
created or maintained by the same originator to maintain the 
fixed price.
SEC. 15. <<NOTE: 12 USC 5914.>> REPORTS.

(a) Annual Reporting Requirement.--Beginning on the date that is 1 
year after the date of enactment of this Act, and annually thereafter, 
the primary Federal payment stablecoin regulators, in consultation with 
State payment stablecoin regulators, as necessary, shall submit to the 
Committee on Banking, Housing, and Urban Affairs of the Senate, the 
Committee on Financial Services of the House of Representatives, and the 
Director of the Office of Financial Research a report, which may include 
a classified annex, if applicable, on the status of the payment 
stablecoin industry, including--
(1) a summary of trends in payment stablecoin activities;

[[Page 139 STAT. 461]]

(2) a summary of the number of applications for approval as 
a permitted payment stablecoin issuer under section 5, including 
aggregate approvals and rejections of applications; and
(3) a description of the potential financial stability risks 
posed to the safety and soundness of the broader financial 
system by payment stablecoin activities.

(b) FSOC Report.--The Financial Stability Oversight Council shall 
incorporate the findings in the report under subsection (a) into the 
annual report of the Council required under section 112(a)(2)(N) of the 
Financial Stability Act of 2010 (12 U.S.C. 5322(a)(2)(N)).
SEC. 16. <<NOTE: 12 USC 5915.>> AUTHORITY OF BANKING 
INSTITUTIONS.

(a) Rule of Construction.--Nothing in this Act may be construed to 
limit the authority of a depository institution, Federal credit union, 
State credit union, national bank, or trust company to engage in 
activities permissible pursuant to applicable State and Federal law, 
including--
(1) accepting or receiving deposits or shares (in the case 
of a credit union), and issuing digital assets that represent 
those deposits or shares;
(2) utilizing a distributed ledger for the books and records 
of the entity and to effect intrabank transfers; and
(3) providing custodial services for payment stablecoins, 
private keys of payment stablecoins, or reserves backing payment 
stablecoins.

(b) Regulatory Review.--Entities regulated by the primary Federal 
payment stablecoin regulators are authorized to engage in the payment 
stablecoin activities and investments contemplated by this Act, 
including acting as a principal or agent with respect to any payment 
stablecoin and payment of fees to facilitate customer 
transactions. <<NOTE: Guidance.>> The primary Federal payment 
stablecoin regulators shall review all existing guidance and 
regulations, and if necessary, amend or promulgate new regulations and 
guidance, to clarify that regulated entities are authorized to engage in 
such activities and investments.

(c) Treatment of Custody Activities.--The appropriate Federal 
banking agency, the National Credit Union Administration (in the case of 
a credit union), and the Securities and Exchange Commission may not 
require a depository institution, national bank, Federal credit union, 
State credit union, or trust company, or any affiliate thereof--
(1) to include digital assets held in custody that are not 
owned by the entity as a liability on the financial statement or 
balance sheet of the entity, including payment stablecoin 
custody or safekeeping activities; or
(2) to hold in custody or safekeeping regulatory capital 
against digital assets and reserves backing such assets 
described in section 4(a)(1)(A), except as necessary to mitigate 
against operational risks inherent in custody or safekeeping 
services, as determined by--
(A) the appropriate Federal banking agency;
(B) the National Credit Union Administration (in the 
case of a credit union);
(C) a State bank supervisor; or
(D) a State credit union supervisor.

[[Page 139 STAT. 462]]

(d) State-chartered Depository Institutions.--
(1) In general.--A depository institution chartered under 
the banking laws of a State, that has a subsidiary that is a 
permitted payment stablecoin issuer, may engage in the business 
of money transmission or provide custodial services through the 
permitted payment stablecoin issuer in any State if such State-
chartered depository institution is--
(A) required by the laws or regulations of the home 
State to establish and maintain adequate liquidity, and 
such liquidity is regularly reassessed by the home State 
banking supervisor to take into account any changes in 
the financial condition and risk profile of the 
institution, including any uninsured deposits maintained 
by such institution; and
(B) required by the laws or regulations of the home 
State to establish and maintain adequate capital, and 
such capital is regularly reassessed by the home State 
banking supervisor to take into account any changes in 
the financial condition and risk profile of the 
institution, including any uninsured deposits maintained 
by such institution.
(2) <<NOTE: Applicability.>> Rule of construction.--Nothing 
in this section shall limit, or be construed to limit, the 
authority of a host State bank regulator, to perform 
examinations of a depository institution's subsidiary permitted 
payment stablecoin issuer or activities conducted through the 
permitted payment stablecoin issuer to ensure compliance with 
host State consumer protection laws that the host State bank 
regulator has specific jurisdiction to enforce, which shall 
apply to such institution consistent with section 7(f).

(e) Definitions.--In this section:
(1) Home state.--The term ``home State'' means the State by 
which the depository institution is chartered.
(2) Host state.--The term ``host State'' means a State in 
which a depository institution establishes a branch, solicits 
customers, or otherwise engages in business activities, other 
than the home State.
SEC. 17. AMENDMENTS TO CLARIFY THAT PAYMENT STABLECOINS ARE NOT 
SECURITIES OR COMMODITIES AND PERMITTED 
PAYMENT STABLECOIN ISSUERS ARE NOT 
INVESTMENT COMPANIES.

(a) Investment Advisers Act of 1940.--Section 202(a)(18) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(18)) is amended by 
adding at the end the following: ``The term `security' does not include 
a payment stablecoin issued by a permitted payment stablecoin issuer, as 
such terms are defined in section 2 of the GENIUS Act.''.
(b) Investment Company Act of 1940.--The Investment Company Act of 
1940 (15 U.S.C. 80a-1 et seq.) is amended
(1) in section 2(a)(36) of the Act (15 U.S.C. 80a-2(a)(36)), 
by adding at the end the following: ``The term `security' does 
not include a payment stablecoin issued by a permitted payment 
stablecoin issuer, as such terms are defined in section 2 of the 
GENIUS Act.''; and
(2) in section 3(c)(3) of the Act (15 U.S.C. 80a-3(c)(3)), 
by inserting ``any permitted payment stablecoin issuer, as such

[[Page 139 STAT. 463]]

term is defined in section 2 of the GENIUS Act;'' after 
``therefor;''.

(c) Securities Act of 1933.--Section 2(a)(1) of the Securities Act 
of 1933 (15 U.S.C. 77b(a)(1)) is amended by adding at the end the 
following: ``The term `security' does not include a payment stablecoin 
issued by a permitted payment stablecoin issuer, as such terms are 
defined in section 2 of the GENIUS Act.''.
(d) Securities Exchange Act of 1934.--Section 3(a)(10) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)) is amended by 
adding at the end the following: ``The term `security' does not include 
a payment stablecoin issued by a permitted payment stablecoin issuer, as 
such terms are defined in section 2 of the GENIUS Act.''.
(e) Securities Investor Protection Act of 1970.--Section 16(14) of 
the Securities Investor Protection Act of 1970 (15 U.S.C. 78lll(14)) is 
amended by adding at the end the following: ``The term `security' does 
not include a payment stablecoin issued by a permitted payment 
stablecoin issuer, as such terms are defined in section 2 of the GENIUS 
Act.''.
(f) Commodity Exchange Act.--Section 1a(9) of the Commodity Exchange 
Act (7 U.S.C. 1a(9)) is amended by adding at the end the following: 
``The term `commodity' does not include a payment stablecoin issued by a 
permitted payment stablecoin issuer, as such terms are defined in 
section 2 of the GENIUS Act.''.
SEC. 18. <<NOTE: Determinations. 12 USC 5916.>> EXCEPTION FOR 
FOREIGN PAYMENT STABLECOIN ISSUERS AND 
RECIPROCITY FOR PAYMENT STABLECOINS ISSUED 
IN OVERSEAS JURISDICTIONS.

(a) In General.--The prohibitions under section 3 shall not apply to 
a foreign payment stablecoin issuer if all of the following apply:
(1) The foreign payment stablecoin issuer is subject to 
regulation and supervision by a foreign payment stablecoin 
regulator of a foreign country, a territory of the United 
States, Puerto Rico, Guam, American Samoa, or the Virgin Islands 
that has a regulatory and supervisory regime with respect to 
payment stablecoins that the Secretary of the Treasury 
determines, pursuant to subsection (b), is comparable to the 
regulatory and supervisory regime established under this Act, 
including, in particular, the requirements under section 4(a).
(2) The foreign payment stablecoin issuer is registered with 
the Comptroller pursuant to subsection (c).
(3) The foreign payment stablecoin issuer holds reserves in 
a United States financial institution sufficient to meet 
liquidity demands of United States customers, unless otherwise 
permitted under a reciprocal arrangement established pursuant to 
subsection (d).
(4) The foreign country in which the foreign payment 
stablecoin issuer is domiciled and regulated is not subject to 
comprehensive economic sanctions by the United States or in a 
jurisdiction that the Secretary of the Treasury has determined 
to be a jurisdiction of primary money laundering concern.

(b) Treasury Determination.--

[[Page 139 STAT. 464]]

(1) In general.--The Secretary of the Treasury may make a 
determination as to whether a foreign country has a regulatory 
and supervisory regime that is comparable to the requirements 
established under this Act, including the requirements under 
section 4(a). <<NOTE: Recommenda-tion.>> The Secretary of the 
Treasury may make such a determination only upon a 
recommendation from each other member of the Stablecoin 
Certification Review Committee. Prior <<NOTE: Federal Register, 
publication.>> to such determination taking effect, the 
Secretary of the Treasury shall publish in the Federal Register 
a justification for such determination, including how the 
foreign country's regulatory and supervisory regime is 
comparable to the requirements established under this Act, 
including the requirements under section 4(a).
(2) Request.--A foreign payment stablecoin issuer or a 
foreign payment stablecoin regulator may request from the 
Secretary of the Treasury a determination under paragraph (1).
(3) <<NOTE: Deadline.>> Timing for determination.--If a 
foreign payment stablecoin issuer or foreign payment stablecoin 
regulator requests a determination under paragraph (2), the 
Secretary of the Treasury shall render a decision on the 
determination not later than 210 days after the receipt of a 
substantially complete determination request.
(4) Rescission of determination.--
(A) In general.--The Secretary of the Treasury may, 
in consultation with the Federal payment stablecoin 
regulators, rescind a determination made under paragraph 
(1), if the Secretary determines that the regulatory 
regime of such foreign country is no longer comparable 
to the requirements established under this 
Act. <<NOTE: Federal Register, publication.>> Prior to 
such rescission taking effect, the Secretary of the 
Treasury shall publish in the Federal Register a 
justification for the rescission.
(B) <<NOTE: Deadline.>> Limited safe harbor.--If 
the Secretary of the Treasury rescinds a determination 
pursuant to subparagraph (A), a digital asset service 
provider shall have 90 days before the offer or sale of 
a payment stablecoin issued by the foreign payment 
stablecoin issuer that is the subject of the rescinded 
determination shall be in violation of section 3.
(5) <<NOTE: List.>> Public notice.--The Secretary of the 
Treasury shall keep and make publicly available a current list 
of foreign countries for which a determination under paragraph 
(1) has been made.
(6) <<NOTE: Deadline.>> Rulemaking.--Not later than 1 year 
after the date of enactment of this Act, the Secretary of the 
Treasury shall issue such rules as may be required to carry out 
this section.

(c) Registration and Ongoing Monitoring.--
(1) Registration.--
(A) In general.--A foreign payment stablecoin issuer 
may offer or sell payment stablecoins using a digital 
asset service provider if the foreign payment stablecoin 
issuer is registered with the Comptroller.
(B) <<NOTE: Effective date. Notification.>> 
Registration approval.--A registration of a foreign 
payment stablecoin issuer filed in accordance with this 
section shall be deemed approved on the date that is 30 
days after the date the Comptroller receives the

[[Page 139 STAT. 465]]

registration, unless the Comptroller notifies the 
foreign payment stablecoin issuer in writing that such 
registration has been rejected.
(C) Standards for rejection.--In determining whether 
to reject a foreign payment stablecoin issuer's 
registration, the Comptroller shall consider
(i) the final determination of the Secretary 
of the Treasury under this section;
(ii) the financial and managerial resources of 
the United States operations of the foreign 
payment stablecoin issuer;
(iii) whether the foreign payment stablecoin 
issuer will provide adequate information to the 
Comptroller as the Comptroller determines is 
necessary to determine compliance with this Act;
(iv) whether the foreign payment stablecoin 
presents a risk to the financial stability of the 
United States; and
(v) whether the foreign payment stablecoin 
issuer presents illicit finance risks to the 
United States.
(D) <<NOTE: Deadline. Notification.>> Procedure for 
appeal.--If the Comptroller rejects a registration, not 
later than 30 days after the date of receipt of such 
rejection, the foreign payment stablecoin issuer may 
appeal the rejection by notifying the Comptroller of the 
request to appeal.
(E) Rulemaking.--Pursuant to section 13 of this Act, 
the Comptroller shall issue rules relating to the 
standards for approval of registration requests and the 
process for appealing denials of such registration 
requests.
(F) <<NOTE: List.>> Public notice.--The Comptroller 
shall keep and make publicly available a current list of 
foreign payment stablecoin issuer registrations that 
have been approved.
(2) Ongoing monitoring.--A foreign payment stablecoin issuer 
shall
(A) be subject to reporting, supervision, and 
examination requirements as determined by the 
Comptroller; and
(B) <<NOTE: Consent.>> consent to United States 
jurisdiction relating to the enforcement of this Act.
(3) Lack of compliance.--
(A) <<NOTE: Rescission.>> Comptroller action.--The 
Comptroller may, in consultation with the Secretary of 
the Treasury, rescind approval of a registration of a 
foreign payment stablecoin issuer under this subsection 
if the Comptroller determines that the foreign payment 
stablecoin issuer is not in compliance with the 
requirements of this Act, including for maintaining 
insufficient reserves or posing an illicit finance risk 
or financial stability risk. <<NOTE: Federal Register, 
publication.>> Prior to such rescission taking effect, 
the Comptroller shall publish in the Federal Register a 
justification for the rescission.
(B) <<NOTE: Revocation.>> Secretary action.--The 
Secretary of the Treasury, in consultation with the 
Comptroller, may revoke a registration of a foreign 
payment stablecoin issuer under this subsection if the 
Secretary determines that reasonable grounds exist for 
concluding that the foreign payment stablecoin issuer 
presents economic sanctions evasion, money laundering, 
or other illicit finance risks, or, as applicable, 
violations, or facilitation thereof.

[[Page 139 STAT. 466]]

(d) <<NOTE: Deadlines.>> Reciprocity.--
(1) <<NOTE: Contracts.>> In general.--The Secretary of the 
Treasury may create and implement reciprocal arrangements or 
other bilateral agreements between the United States and 
jurisdictions with payment stablecoin regulatory regimes that 
are comparable to the requirements established under this Act. 
The Secretary of the Treasury shall consider whether the 
jurisdiction's requirements for payment stablecoin issuers 
include
(A) similar requirements to those under section 
4(a);
(B) adequate anti-money laundering and counter-
financing of terrorism program and sanction compliance 
standards; and
(C) adequate supervisory and enforcement capacity to 
facilitate international transactions and 
interoperability with United States dollar-denominated 
payment stablecoins issued overseas.
(2) <<NOTE: Federal Register, publication.>> Publication.--
Not later than 90 days prior to the entry into force of any 
arrangement or agreement under paragraph (1), the Secretary of 
the Treasury shall publish the arrangement or agreement in the 
Federal Register.
(3) Completion.--The Secretary of the Treasury should 
complete the arrangements under this subsection not later than 
the date that is 2 years after the date of enactment of this 
Act.
SEC. 19. DISCLOSURE RELATING TO PAYMENT STABLECOINS.

Section 13104(a)(3) of title 5, United States Code, is amended, in 
the first sentence, by striking ``, or any deposits'' and inserting ``, 
any payment stablecoins issued by a permitted payment stablecoin issuer 
aggregating $5,000 or less held, or any deposits''.
SEC. 20. <<NOTE: 12 USC 5901 note.>> EFFECTIVE DATE.

This Act, and the amendments made by this Act, shall take effect on 
the earlier of
(1) the date that is 18 months after the date of enactment 
of this Act; or
(2) the date that is 120 days after the date on which the 
primary Federal payment stablecoin regulators issue any final 
regulations implementing this Act.

Approved July 18, 2025.

LEGISLATIVE HISTORY--S. 1582:
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CONGRESSIONAL RECORD, Vol. 171 (2025):
May 21, June 2, 9, 11, 12, 17, considered and passed Senate.
July 17, considered and passed House.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2025):
July 18, Presidential remarks.

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