S 1582 — GENIUS Act

(iv) money<<NOTE: 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 days or less;

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;

or (III)[[Page bilateral139 withSTAT. a counterparty that the issuer has determined to be adequately creditworthy even in the event of severe market stress;

426]] (III) bilateral with a counterparty that the issuer has determined to be adequately creditworthy even in the event of severe market stress;

or (viii) any<<NOTE: 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)Compliance.>> publiclyany disclosereserve thedescribed issuer'sin redemptionclause policy, which shall-- (i) establishthrough clear(iii) andor conspicuousclause procedures(vi) forthrough timely(vii) redemptionin oftokenized outstandingform, payment stablecoins, provided that anysuch discretionaryreserves limitationscomply onwith timelyall redemptionsapplicable canlaws onlyand beregulations; imposed by a State qualified payment stablecoin regulator, the Corporation, the Comptroller, or the Board, consistent with section 7;

and(B) (ii)<<NOTE: 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;

andPublic (C)information.>> publishpublicly thedisclose monthly composition of the issuer's reservesredemption onpolicy, thewhich websiteshall-- of the issuer, containing-- (i) the<<NOTE: total number of outstanding payment stablecoins issued by the issuer;

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;

or (C) creating<<NOTE: 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;

orTime (ii)period.>> thecreating permittedliquidity to meet reasonable expectations of requests to redeem payment stablecoinstablecoins, issuersuch receivesthat thereserves priorin approvalthe form of itsTreasury primarybills Federalmay paymentbe stablecoinsold regulatoras purchased securities for repurchase agreements with a maturity of 93 days or Stateless, paymentprovided stablecointhat regulator,either-- as(i) applicable.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.

and (III) in<<NOTE: 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;

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;

and (iv)[[Page appropriate139 operational,STAT. 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;

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;

(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.

(iii) Rules relating to leverage capital requirements or risk-based capital requirements.--Anyrequirements.-- Any rule issued by an appropriate Federal banking agency that imposes, on a consolidated basis, a leverage capital requirement or risk-based capital requirement with respect to an insured depository institution or depository institution holding company shall provide that, for purposes of such leverage capital requirement or risk-based capital requirement, any insured depository institution or depository institution holding company that includes, on a consolidated basis, a permitted payment stablecoin issuer, shall not be required to hold, with respect to such permitted payment stablecoin issuer and its assets and operations, any amount of regulatory capital in excess of the capital that such permitted payment stablecoin issuer must maintain under the capital requirements issued pursuant to subparagraph (A)(i).

(iv)[[Page Modifications.--Not139 laterSTAT. 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)429]] Treatment(iv) under<<NOTE: the bank secrecy act and sanctions laws.-- (A) In general.--A permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the Bank Secrecy Act, and as such, shall be subject to all Federal laws applicable to a financial institution located in the United States relating to economic sanctions, prevention of money laundering, customer identification, and due diligence, including-- (i) maintenance of an effective anti-money laundering program, which shall include appropriate risk assessments and designation of an officer to supervise the program;

(ii)Deadline. retention of appropriate records;

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;

(iv) technical<<NOTE: capabilities, policies, and procedures to block, freeze, and reject specific or impermissible transactions that violate Federal or State laws, rules, or regulations;

(v)Policies. 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;

andProcedures.>> (vi)technical maintenancecapabilities, ofpolicies, anand effectiveprocedures economicto sanctionsblock, compliancefreeze, program,and includingreject verificationspecific ofor sanctionsimpermissible lists,transactions consistentthat withviolate Federal law.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.

(6) Coordination with permitted payment stablecoin issuers with respect to blocking of property and technological capabilities to comply with lawful orders.-- (A) In general.--The Secretary of the Treasury-- (i) shall, to the best of the Secretary's ability, coordinate with a permitted payment stablecoin issuer before taking any action to block and prohibit transactions in property and interests in property of a foreign person to ensure that the permitted payment stablecoin issuer is able to effectively block a payment stablecoin[[Page of139 theSTAT. foreign person upon issuance of the payment stablecoin;

430]] stablecoin of the foreign person upon issuance of the payment stablecoin;

(B)[[Page Regulations.--The139 BoardSTAT. 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.

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.

(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.

(B) Public disclosure and submission to federal regulators.--Each permitted payment stablecoin issuer required to prepare an audited annual financial statement under subparagraph (A) shall-- (i)[[Page make139 suchSTAT. audited financial statements publicly available on the website of the permitted payment stablecoin issuer;

432]] (i) make such audited financial statements publicly available on the website of the permitted payment stablecoin issuer;

(12) Non-financial<<NOTE: services public companies.-- (A) Definitions.--In this paragraph:

Compliance.>> Non-financial services public companies.-- (A) Definitions.--In this paragraph:

(II) the<<NOTE: 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;

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;

(ii)[[Page Exception.--The139 prohibitionSTAT. 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;

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) the<<NOTE: 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;

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;

(D) Rulemaking.--Not<<NOTE: 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.

Deadline.>> Rulemaking.--Not later than 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.

(14)[[Page Rule139 ofSTAT. 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.

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.

(2) Principles.--The<<NOTE: 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)Notice. 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)Determination.>> Certification.--Principles.--The (A)Secretary Initialof certification.--Subjectthe toTreasury subparagraphshall, (B),through notnotice laterand thancomment 1rulemaking, yearestablish afterbroad-based theprinciples effectivefor datedetermining ofwhether this Act, a StateState-level paymentregulatory stablecoinregime regulatoris shallsubstantially submitsimilar to the StablecoinFederal Certification Review Committee an initial certification that the State-level regulatory regimeframework meetsunder thethis criteriaAct. for substantial similarity established pursuant to paragraph (2).

(B)(3) Form<<NOTE: of certification.--The initial certification required under subparagraph (A) shall contain, in a form prescribed by the Stablecoin Certification Review Committee, an attestation that the State-level regulatory regime meets the criteria for substantial similarity established pursuant to paragraph (2).

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).

(5) Certification review.-- (A) In<<NOTE: general.--Not later than 30 days after the date on which a State payment stablecoin regulator submits an initial certification or a recertification under paragraph (4), the Stablecoin Certification Review Committee shall-- (i) approve such certification if the Committee unanimously determines that the State-level regulatory regime meets or exceeds the standards and requirements described in subsection (a);

orDeadline.>> (ii)In denygeneral.--Not suchlater certificationthan anddays provideafter the Statedate paymenton stablecoinwhich 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 andsubmits State-levelan regulatoryinitial regimecertification toor makea anyrecertification changesunder necessaryparagraph to(4), meet or exceed the standardsStablecoin andCertification requirementsReview describedCommittee inshall-- subsection(i) (a).<<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).

(C) Opportunity to cure.-- (i) In<<NOTE: 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);

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);

(ii) Denial.--If,<<NOTE: after a State payment stablecoin regulator resubmits an initial certification or recertification under clause (i), the Stablecoin Certification Review Committee again determines that the initial certification or recertification shall result in a denial, the Stablecoin Certification Review Committee shall, not later than 30 days after such determination, provide the State payment stablecoin regulator with a written explanation for the determination.

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.

(6) List.--The<<NOTE: 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)Federal ExpeditedRegister, certificationspublication. of existing regulatory regimes.--The 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)Web Transitionposting.>> toList.--The FederalSecretary 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 paymentTreasury stablecoinshall reachespublish suchand threshold,maintain transitionin to the Federal regulatoryRegister frameworkand ofon the primarywebsite Federal payment stablecoin regulator of the StateDepartment charteredof depository institution, which shall be administered by the StateTreasury paymenta stablecoinlist regulator of theStates Statethat charteredhave depositorysubmitted institutioninitial certifications and therecertifications primaryunder Federalparagraph payment(4). stablecoin regulator acting jointly;

(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;

(3) Waiver.-- (A)[[Page In139 general.--NotwithstandingSTAT. 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)437]] Criteria(A) forIn waiver.--Thegeneral.--Notwithstanding paragraphs (1) and (2), the applicable primary Federal payment stablecoin regulator shallmay considerpermit thea followingState exclusivequalified criteriapayment instablecoin determiningissuer whetherwith a payment stablecoin with a consolidated total outstanding issuance of more than $10,000,000,000 to issueremain solely supervised by a waiverState underpayment thisstablecoin paragraph: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:

(ii) State<<NOTE: 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.

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.

(2) Misrepresentation of insured status.-- (A)[[Page In139 general.--ItSTAT. 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.

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.

(h) Rulemaking.-- (1)[[Page In139 general.--ConsistentSTAT. 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.

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.

APPROVAL<<NOTE: OF SUBSIDIARIES OF INSURED DEPOSITORY INSTITUTIONS AND FEDERAL QUALIFIED PAYMENT STABLECOIN ISSUERS.

(a)12 Application.--USC (1)5904.>> InAPPROVAL general.--EachOF primarySUBSIDIARIES FederalOF paymentINSURED stablecoinDEPOSITORY regulatorINSTITUTIONS shall--AND (A)FEDERAL receive,QUALIFIED review,PAYMENT andSTABLECOIN considerISSUERS. 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(a) (B)Application.-- establish(1) aIn processgeneral.--Each andprimary frameworkFederal forpayment thestablecoin licensing,regulator regulation,shall-- examination,(A) and<<NOTE: supervision of such entities that prioritizes the safety and soundness of such entities.

(2)Review.>> Authorityreceive, review, and consider for approval applications from any insured depository institution that seeks to issue regulationspayment stablecoins through a subsidiary and processany applications.--Thenonbank primaryentity, Federal paymentbranch, stablecoinor regulatorsuninsured shall,national beforebank that is chartered by the dateComptroller describedpursuant into sectiontitle 13--LXII (A)of issuethe regulationsRevised consistentStatutes, withand that sectionseeks to carryissue outpayment thisstablecoins section;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;

(3)[[Page Mandatory139 approvalSTAT. 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.

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.

(d) Timing<<NOTE: for Decision;

Deadlines.>> Timing for Decision;

(ii) Notification.--Not later than 30 days after receiving an application under subsection (a), a primary Federal payment stablecoin regulator shall notify the applicant as to whether the primary Federal payment stablecoin regulator considers the application to be substantially complete and, if the application is not substantially complete, the additional information the[[Page applicant139 shallSTAT. provide in order for the application to be considered substantially complete.

441]] the applicant shall provide in order for the application to be considered substantially complete.

(2) Denial of application.-- (A) Grounds for denial.-- (i) In<<NOTE: 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)Determination.>> IssuanceIn ongeneral.--A open,primary public,Federal orpayment decentralizedstablecoin networkregulator notshall groundonly fordeny denial.--a Thesubstantially issuancecomplete ofapplication areceived paymentunder stablecoinsubsection on(a) anif open,the public,regulator ordetermines decentralizedthat networkthe shallactivities notof bethe aapplicant validwould groundbe forunsafe denialor ofunsound anbased applicationon receivedthe underfactors described in subsection (a).(c).

(B)(ii) ExplanationIssuance required.--Ifon aopen, primarypublic, Federalor paymentdecentralized stablecoinnetwork regulatornot deniesground afor completedenial.--The applicationissuance receivedof undera subsectionpayment (a),stablecoin noton lateran thanopen, 30public, daysor afterdecentralized thenetwork date of such denial, the regulator shall providenot thebe applicanta withvalid writtenground noticefor explaining the denial withof specificity,an includingapplication allreceived findingsunder madesubsection by(a). 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.

(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.

(iii) Final<<NOTE: determination.--Not later than 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)Notification. Notice if no hearing.--If an applicant does not make a timely request for a hearing under this subparagraph, the primary Federal payment stablecoin regulator shall notify the applicant, not later than 10 days after the date by which the applicant may request a hearing under this subparagraph, in writing, that the denial of the application is a final determination of the primary Federal payment stablecoin regulator.

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.

(f) Safe<<NOTE: 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;

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;

(i) Certification Required.-- (1) In<<NOTE: general.--Not later than 180 days after the approval of an application, and on an annual basis thereafter, each permitted payment stablecoin issuer shall submit to its primary Federal payment stablecoin regulator, or in the case of a State qualified payment stablecoin issuer its State payment stablecoin regulator, a certification that the issuer has implemented anti-money laundering and economic sanctions compliance programs that are reasonably designed to prevent the permitted payment stablecoin issuer from facilitating money laundering, 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.

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.

SUPERVISION<<NOTE: AND ENFORCEMENT WITH RESPECT TO FEDERAL QUALIFIED PAYMENT STABLECOIN ISSUERS AND SUBSIDIARIES OF INSURED DEPOSITORY INSTITUTIONS.

12 USC 5905.>> SUPERVISION AND ENFORCEMENT WITH RESPECT TO FEDERAL QUALIFIED PAYMENT STABLECOIN ISSUERS AND SUBSIDIARIES OF INSURED DEPOSITORY INSTITUTIONS.

and (D) the compliance of the Federal qualified nonbank payment stablecoin issuer with the requirements of the Bank[[Page Secrecy139 ActSTAT. and with laws authorizing the imposition of sanctions and implemented by the Secretary of the Treasury.

(3)444]] Examinations.--TheBank appropriateSecrecy primaryAct Federaland paymentwith stablecoinlaws regulatorauthorizing shall examine a permitted payment stablecoin issuer described in paragraph (1) in order to assess-- (A) the natureimposition of thesanctions operations and financialimplemented conditionby of the permittedSecretary paymentof stablecointhe issuer;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) Enforcement.--<<NOTE: (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;

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;

(2)[[Page Cease-and-desist139 proceedings.--IfSTAT. 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;

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;

(4) Procedures.-- (A) In<<NOTE: 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.

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(i)(1)) or section[[Page 206(k)(1)139 ofSTAT. the Federal Credit Union Act (12 U.S.C.

446]] section 206(k)(1) of the Federal Credit Union Act (12 U.S.C.

(A) Failure to be approved.--Any person that issues a United States dollar-denominated payment stablecoin in violation of section 3, and any institution-institution-affiliated 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.

1818(i)(2)) or section[[Page 206(k)(2)139 ofSTAT. the Federal Credit Union Act (12 U.S.C.

447]] section 206(k)(2) of the Federal Credit Union Act (12 U.S.C.

(E) Notice and orders after separation from service.--Theservice. 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.

<<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.

STATE<<NOTE: QUALIFIED PAYMENT STABLECOIN ISSUERS.

12 USC 5906.>> STATE QUALIFIED PAYMENT STABLECOIN ISSUERS.

(b) Authority To Enter Into Agreements With the Board.--ABoard. 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: 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.

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.

(e) Enforcement Authority in Unusual and Exigent Circumstances.-- (1) Board.-- (A) In<<NOTE: general.--Subject to subparagraph (C), under unusual and exigent circumstances that the Board determines to exist, the Board may, after not less than 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)Time Rulemaking.--Consistentperiod. with section 13, the Board shall issue rules to set forth the unusual and exigent circumstances in which the Board may act under this paragraph.

(C)Notice.>> Limitations.--If,In aftergeneral.-- unusualSubject andto exigentsubparagraph circumstances(C), areunder determinedunusual toand existexigent pursuantcircumstances tothat subparagraph (A), the Board determines that there is reasonable cause to believeexist, that the continuationBoard bymay, aafter Statenot qualifiedless paymentthan stablecoin48 issuerhours' ofprior anywritten activitynotice constitutes a serious risk to the financialapplicable safety, soundness, or stability of the State qualified payment stablecoin issuer,regulator, thetake Boardan mayenforcement imposeaction suchagainst 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 andor anyan ofinstitution- itsaffiliated affiliates,party limiting--of (i)such transactionsissuer betweenfor theviolations Stateof qualifiedthis paymentAct stablecoinduring issuer,such aunusual holding company, and theexigent subsidiariescircumstances. or affiliates of either the State qualified payment stablecoin issuer or the holding company;

(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;

(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-affiliatedinstitution- affiliated party of the State qualified payment stablecoin issuer subject to the directive, may object and present to the Board, in writing, the reasons why the directive should be modified or rescinded.

(II) Automatic<<NOTE: 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.

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.

(2) Comptroller.-- (A)[[Page In139 general.--SubjectSTAT. 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.

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.

(C) Limitations.--If,<<NOTE: 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;

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;

(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-affiliatedinstitution- affiliated party of the Federal qualified payment stablecoin issuer subject to the directive, may object and present to the Comptroller, in writing, the reasons that the directive should be modified or rescinded.

(II) Automatic<<NOTE: 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)Deadline.>> JudicialAutomatic review.--lapse (I)of Indirective.--If, general.--Ifafter the10 Comptrollerdays affirmsafter or modifies a directive pursuant to clause (i), any affected party may immediately thereafter petition the Unitedreceipt Statesof districta courtresponse fordescribed the district in whichsubclause the(I), main office of the affectedComptroller partydoes isnot located,affirm, modify, or inrescind the Uniteddirective, States District Court for the Districtdirective ofshall Columbia,automatically tolapse. stay, modify, terminate, or set aside the directive.

(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.

(f) Effect on State Law.-- (1) Host<<NOTE: 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.

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.

ANTI-MONEY<<NOTE: LAUNDERING PROTECTIONS.

(a)12 PaymentUSC Stablecoins5907.>> IssuedANTI-MONEY byLAUNDERING aPROTECTIONS. Foreign Payment Stablecoin Issuer.-- (1) 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.

(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.

(B) Designation<<NOTE: as noncompliant.--Not later than 30 days after the Department of the Treasury has identified a foreign payment stablecoin issuer of any payment 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.

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.

(b) Publication<<NOTE: of Designation;

Prohibition on Secondary Trading.-- (1) In general.--If a foreign payment stablecoin issuer does not come into compliance with the lawful order within 30 days from the date of issuance of the written notice described in subsection (a), except as provided in subsection (c), the Secretary of the Treasury shall-- (A) publish the determination of noncompliance in the Federal Register, includingpublication. a statement on the failure of the foreign payment stablecoin issuer to comply with the lawful order after the written notice;

andDeterminations. (B) issue a notification in the Federal Register prohibiting digital asset service providers from facilitating secondary trading of payment stablecoins issued by the foreign payment stablecoin issuer in the United States.

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.

(B) Rulemaking.--Consistent<<NOTE: 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.

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.

(B) Foreign payment stablecoin issuers.--Any foreign payment stablecoin issuer that knowingly continues to publicly offer a payment stablecoin in the United States after publication of the determination of noncompliance under paragraph (1)(A) shall be subject to a civil monetary penalty[[Page of139 notSTAT. 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.

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) Waiver<<NOTE: 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;

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)[[Page activities139 necessarySTAT. to carry out or assist law enforcement activity of the United States.

453]] (B) activities necessary to carry out or assist law enforcement activity of the United States.

ANTI-MONEY<<NOTE: LAUNDERING INNOVATION.

(a)12 PublicUSC Comment.--Beginning5908.>> onANTI-MONEY theLAUNDERING dateINNOVATION. 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;

(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) Research<<NOTE: 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:

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:

(c) Treasury Risk Assessment.--As part of the national strategy for combating terrorist and other illicit financing required under[[Page sections139 andSTAT. 262 of the Countering America's Adversaries Through Sanctions Act (Public Law 115-44;

454]] under sections 261 and 262 of the Countering America's Adversaries Through Sanctions Act (Public Law 115-44;

(d) FinCEN<<NOTE: 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:

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:

(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 way[[Page as139 toSTAT. make such transaction or the identity of the transaction parties less identifiable may facilitate illicit activity;

455]] way as to make such transaction or the identity of the transaction parties less identifiable may facilitate illicit activity;

CUSTODY<<NOTE: OF PAYMENT STABLECOIN RESERVE AND COLLATERAL.

12 USC 5909.>> CUSTODY OF PAYMENT STABLECOIN RESERVE AND COLLATERAL.

and (2) complies<<NOTE: 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.

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.

and (2)[[Page take139 suchSTAT. 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.

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.

(3) Customer<<NOTE: 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 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.

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.

(a) In<<NOTE: 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;

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;

(B)[[Page in139 paragraphSTAT. (4)(B), by striking the period at the end and inserting ``;

458]] (B) in paragraph (4)(B), by striking the period at the end and inserting ``;

``(5) with<<NOTE: 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.''.

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.''.

``(e) Notwithstanding<<NOTE: 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.''.

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.''.

``(11) required<<NOTE: 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.''.

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.''.

(g) Application<<NOTE: 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:

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:

1813)) shall be resolved by the Federal Deposit Insurance Corporation, National[[Page Credit139 UnionSTAT. Administration, or State payment stablecoin regulator, as applicable.

459]] National Credit Union Administration, or State payment stablecoin regulator, as applicable.

INTEROPERABILITY<<NOTE: STANDARDS.

The12 primaryUSC Federal5912.>> paymentINTEROPERABILITY stablecoinSTANDARDS. 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 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;

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 (Public Law 104-113), prescribe standards for permitted payment stablecoin issuers to promote compatibility and interoperability with-- (1) other permitted payment stablecoin issuers;

RULEMAKING.<<NOTE:

(a)12 InUSC General.--Not5913.>> laterRULEMAKING. 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.

(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.

(c) Report Required.--Not later than 180 days after the effective date of this Act, each Federal banking agency shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of[[Page Representatives139 aSTAT. report that confirms and describes the regulations promulgated to carry out this Act.

460]] of Representatives a report that confirms and describes the regulations promulgated to carry out this Act.

REPORTS.<<NOTE:

12 USC 5914.>> REPORTS.

(2)[[Page a139 summarySTAT. of the number of applications for approval as a permitted payment stablecoin issuer under section 5, including aggregate approvals and rejections of applications;

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;

AUTHORITY<<NOTE: OF BANKING INSTITUTIONS.

12 USC 5915.>> AUTHORITY OF BANKING INSTITUTIONS.

The<<NOTE: 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.

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.

(d)[[Page State-chartered139 DepositorySTAT. 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;

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;

(2) Rule<<NOTE: 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).

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).

80a-80a-2(a)(36)), 2(a)(36)), by adding at the end the following:

80a-3(c)(3)), by inserting ``any permitted payment stablecoin issuer, as such term[[Page is139 definedSTAT. in section 2 of the GENIUS Act;'' after ``therefor;''.

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

EXCEPTION<<NOTE: FOR FOREIGN PAYMENT STABLECOIN ISSUERS AND RECIPROCITY FOR PAYMENT STABLECOINS ISSUED IN OVERSEAS JURISDICTIONS.

Determinations.

12 USC 5916.>> EXCEPTION FOR FOREIGN PAYMENT STABLECOIN ISSUERS AND RECIPROCITY FOR PAYMENT STABLECOINS ISSUED IN OVERSEAS JURISDICTIONS.

(b) Treasury Determination.-- (1)[[Page In139 general.--TheSTAT. 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).

The464]] (1) In general.--The Secretary of the Treasury may make such a determination onlyas uponto whether a recommendationforeign fromcountry eachhas othera memberregulatory ofand supervisory regime that is comparable to the Stablecoinrequirements Certificationestablished Reviewunder Committee.this Act, including the requirements under section 4(a).

Prior<<NOTE: 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).

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).

(3) Timing<<NOTE: 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.

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.

Prior<<NOTE: to such rescission taking effect, the Secretary of the Treasury shall publish in the Federal Register a justification for the rescission.

(B)Federal LimitedRegister, safepublication.>> harbor.--IfPrior the Secretary of the Treasury rescinds a determination pursuant to subparagraphsuch (A),rescission ataking digitaleffect, asset service provider shall have 90 days before the offerSecretary or sale of athe paymentTreasury stablecoinshall issuedpublish byin the foreignFederal paymentRegister stablecoina issuerjustification thatfor is the subjectrescission. of the rescinded determination shall be in violation of section 3.

(5)(B) Public<<NOTE: 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)Deadline.>> Rulemaking.--NotLimited latersafe thanharbor.--If 1the yearSecretary afterof the dateTreasury ofrescinds enactmenta ofdetermination thispursuant Act,to subparagraph (A), a digital asset service provider shall have 90 days before the Secretaryoffer or sale of a payment stablecoin issued by the Treasuryforeign shallpayment issuestablecoin suchissuer rulesthat asis maythe besubject requiredof tothe carryrescinded outdetermination thisshall section.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.

(B) Registration<<NOTE: approval.--A registration of a foreign payment stablecoin issuer filed in accordance with this section shall be deemed approved on the date that is 30 days after the date the Comptroller receives the registration, unless the Comptroller notifies the foreign payment stablecoin issuer in writing that such registration has been rejected.

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.

(D) Procedure<<NOTE: 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.

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.

(F) Public<<NOTE: notice.--The Comptroller shall keep and make publicly available a current list of foreign payment stablecoin issuer registrations that have been approved.

List.>> Public notice.--The Comptroller shall keep and make publicly available a current list of foreign payment stablecoin issuer registrations that have been approved.

and (B) consent<<NOTE: to United States jurisdiction relating to the enforcement of this Act.

(3)Consent.>> Lackconsent ofto compliance.--United (A)States Comptrollerjurisdiction action.--Therelating Comptrollerto may, in consultation with the Secretaryenforcement of the Treasury, rescind approval of a registration of a foreign payment stablecoin issuer under this subsectionAct. 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.

Prior(3) toLack suchof rescissioncompliance.-- taking(A) effect,<<NOTE: the Comptroller shall publish in the Federal Register a justification for the rescission.

(B)Rescission.>> SecretaryComptroller action.--The SecretaryComptroller ofmay, the Treasury, in consultation with the Comptroller,Secretary mayof revokethe Treasury, rescind approval of a registration of a foreign payment stablecoin issuer under this subsection if the SecretaryComptroller determines that reasonablethe groundsforeign existpayment forstablecoin concludingissuer thatis thenot foreignin paymentcompliance stablecoinwith issuerthe presentsrequirements economicof sanctionsthis evasion,Act, moneyincluding laundering,for ormaintaining otherinsufficient illicitreserves financeor risks,posing or,an asillicit applicable,finance violations,risk or facilitationfinancial thereof.stability risk.

(d)<<NOTE: Reciprocity.-- (1) In general.--The Secretary of the Treasury may create and implement reciprocal arrangements or other bilateral agreements between the United States and jurisdictions with payment stablecoin regulatory regimes that are comparable to the requirements established under this Act.

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.

(2) Publication.--Not<<NOTE: 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.

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.

EFFECTIVE<<NOTE: DATE.

12 USC 5901 note.>> EFFECTIVE DATE.

PassedApproved theJuly Senate18, June 17, 2025.

Attest:LEGISLATIVE HISTORY--S.

Secretary.1582:

119th--------------------------------------------------------------------------- CONGRESSCONGRESSIONAL 1stRECORD, SessionVol. S.

1582171 _______________________________________________________________________(2025): AN ACT To provide for the regulation of payment stablecoins, and for other purposes.

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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