119-hr2392

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2392 Reported in House

    (RH) ]

<DOC>

 Union Calendar No. 68
119th CONGRESS
 1st Session
 H. R. 2392

 [Report No. 119-94]

 To provide for the regulation of payment stablecoins, and for other 
 purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 March 26, 2025

 Mr. Steil (for himself, Mr. Hill of Arkansas, Mr. Torres of New York, 
 Mr. Emmer, Mr. Huizenga, Mr. Meuser, Mrs. Kim, Mr. Moore of North 
 Carolina, Mr. Downing, Mr. Haridopolos, Mr. Gottheimer, and Mr. 
 Liccardo) introduced the following bill; which was referred to the 
 Committee on Financial Services

 May 6, 2025

 Additional sponsors: Mr. Timmons, Mr. Lawler, Mr. Nunn of Iowa, Mr. 
 Rose, Mr. Stutzman, and Mr. Thanedar

 May 6, 2025

 Reported with an amendment, committed to the Committee of the Whole 
 House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
 in italic]
 [For text of introduced bill, see copy of bill as introduced on March 
 26, 2025]

_______________________________________________________________________

 A BILL

 To provide for the regulation of payment stablecoins, and for other 
 purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Stablecoin Transparency and 
Accountability for a Better Ledger Economy Act of 2025'' or the 
``STABLE Act of 2025''.

SEC. 2. DEFINITIONS.

 In this Act:

    (1) Appropriate federal banking agency.--The term 
 ``appropriate Federal banking agency'' has the meaning given 
 that term under 

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 
 Comptroller of the Currency.

    (5) Corporation.--The term ``Corporation'' means the 
 Federal Deposit Insurance Corporation.

    (6) Credit union terms.--The terms ``Federal credit 
 union'', ``insured credit union'', and ``State credit union'' 
 have the meanings given those terms, respectively, in 

section 101 of the Federal Credit Union Act (12 U.S.C. 1752).

    (7) Digital asset.--The term ``digital asset'' means any 
 digital representation of value which is recorded on a 
 cryptographically-secured distributed ledger.

    (8) Distributed ledger.--The term ``distributed ledger'' 
 means technology where data is shared across a network that 
 creates a public digital ledger of verified transactions or 
 information among network participants and the data is linked 
 using cryptography to maintain the integrity of the public 
 digital ledger and execute other functions.

    (9) Federal qualified nonbank payment stablecoin issuer.--
 The term ``Federal qualified nonbank payment stablecoin 
 issuer'' means a subsidiary of a nonbank entity approved by the 
 primary Federal payment stablecoin regulator, pursuant to 
 

section 5, to issue payment stablecoins.

    (10) Institution-affiliated party.--With respect to a 
 permitted payment stablecoin issuer, the term ``institution-
 affiliated party'' means any director, officer, employee, or 
 person in control of, or agent for, the permitted payment 
 stablecoin issuer.

    (11) Insured depository institution.--The term ``insured 
 depository institution'' means--
        (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.

    (12) Monetary value.--The term ``monetary value''--
        (A) means--
            (i) a national currency;
            (ii) a deposit (as defined in 

section 3 of 
 the Federal Deposit Insurance Act (12 U.S.C. 
 1813)) that is denominated in a national 
 currency; or
            (iii) an account (as defined in 

section 101 
 of the Federal Credit Union Act (12 U.S.C. 
 1752)); and
        (B) does not include any agricultural or other 
 physical commodity (as defined in 

section 1a of the 
 Commodity Exchange Act (7 U.S.C. 1a)).

    (13) National currency.--The term ``national currency'' 
 means a Federal Reserve note (as the term is used in the first 
 undesignated paragraph of 

section 16 of the Federal Reserve Act 
 (12 U.S.C. 411)), money standing to the credit of an account 
 with a Federal reserve bank, money issued by a central bank, 
 and money issued by an intergovernmental organization pursuant 
 to an agreement by one or more governments.

    (14) Nonbank entity.--The term ``nonbank entity'' means a 
 person that is not an insured depository institution or 
 subsidiary of an insured depository institution.

    (15) Payment stablecoin.--The term ``payment stablecoin'' 
 means a digital asset--
        (A) that is or is designed to be used as a means of 
 payment or settlement;
        (B) that is denominated in a national currency;
            (C) the issuer of which--
            (i) is obligated to convert, redeem, or 
 repurchase for a fixed amount of monetary 
 value; or
            (ii) represents that the digital asset will 
 maintain or creates the reasonable expectation 
 that the digital asset will maintain a stable 
 value relative to the value of a fixed amount 
 of monetary value; and
            (D) that is not--
            (i) a national currency;
            (ii) a security issued by--
            (I) an investment company 
 registered under 

section 8

    (a) of the 
 Investment Company Act of 1940 (15 
 U.S.C. 80a-8

    (a) ); or
            (II) a person that would be an 
 investment company under the Investment 
 Company Act of 1940 but for paragraphs

    (1) and

    (7) of 

section 3
            (c) of that Act 
 (15 U.S.C. 80a-3
            (c) );
            (iii) a deposit (as defined under 

section 3 
 of the Federal Deposit Insurance Act (12 U.S.C. 
 1813)), regardless of the technology used to 
 record such deposit; or
            (iv) an account (as defined in 

section 101 
 of the Federal Credit Union Act (12 U.S.C. 
 1752)), regardless of the technology used to 
 record such account.

    (16) Permitted payment stablecoin issuer.--The term 
 ``permitted payment stablecoin issuer'' means--
        (A) a subsidiary of an insured depository 
 institution that has been approved to issue payment 
 stablecoins under 

section 5;
        (B) a Federal qualified nonbank payment stablecoin 
 issuer; or
            (C) a State qualified payment stablecoin issuer.

    (17) Person.--The term ``person'' means an individual, 
 partnership, company, corporation, association (incorporated or 
 unincorporated), trust, estate, cooperative organization, or 
 other entity.

    (18) Primary federal payment stablecoin regulator.--
        (A) In general.--The term ``primary Federal payment 
 stablecoin regulator'' means--
            (i) with respect to an insured depository 
 institution (other than an insured credit 
 union) or a subsidiary of an insured depository 
 institution (other than an insured credit 
 union), the appropriate Federal banking agency 
 of such insured depository institution;
            (ii) with respect to an insured credit 
 union or a subsidiary of an insured credit 
 union, the National Credit Union 
 Administration;
            (iii) with respect to a Federal qualified 
 nonbank payment stablecoin issuer and any 
 nonbank entity that seeks to have a subsidiary 
 approved as a Federal qualified nonbank payment 
 stablecoin issuer, the Comptroller; and
            (iv) with respect to any entity chartered 
 by the Comptroller, the Comptroller.
        (B) Primary federal payment stablecoin 
 regulators.--The term ``primary Federal payment 
 stablecoin regulators'' means the Comptroller, the 
 Board, the Corporation, and the National Credit Union 
 Administration.

    (19) 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).

    (20) State.--The term ``State'' means each of the several 
 States, the District of Columbia, and each territory of the 
 United States.

    (21) State qualified payment stablecoin issuer.--The term 
 ``State qualified payment stablecoin issuer'' means an entity 
 that--
        (A) is approved to issue payment stablecoins by a 
 State payment stablecoin regulator;
        (B) issues a payment stablecoin in compliance with 
 the laws and regulations of a State regulatory regime 
 certified under 

section 4

    (b) ; and
            (C) is not--
            (i) chartered by the Comptroller;
            (ii) a Federal credit union; or
            (iii) a subsidiary of a State credit union 
 that--
            (I) has at least a partial 
 ownership interest or loan from a 
 Federal credit union; or
            (II) has at least a partial 
 ownership interest or loan from a State 
 credit union that is organized in a 
 different State than such subsidiary.

    (22) State payment stablecoin regulator.--The term ``State 
 payment stablecoin regulator'' means--
        (A) a State agency that has primary regulatory and 
 supervisory authority in such State over entities that 
 issue payment stablecoins; and
        (B) with respect to a State qualified payment 
 stablecoin issuer that is a subsidiary of a State-
 chartered depository institution (as defined in 

section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
 1813)) or a State credit union, the State agency that 
 has primary regulatory and supervisory authority over 
 entities that issue payment stablecoins in the State in 
 which such State-chartered depository institution or 
 State credit union is chartered.

    (23) 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 under 
 

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) any subsidiary of the insured credit union that 
 is a State credit union.

SEC. 3. LIMITATION ON WHO MAY ISSUE A PAYMENT STABLECOIN.

    (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) Limitation on Offering or Selling.--

    (1) In general.--After the end of the 18-month period 
 beginning on the date of enactment of this Act, it shall be 
 unlawful for any custodial intermediary to offer or sell a 
 payment stablecoin in the United States unless the payment 
 stablecoin was issued by a permitted payment stablecoin issuer.

    (2) Exceptions for comparable payment stablecoin regimes.--
        (A) In general.--Paragraph

    (1) and subsection

    (a) shall not apply to the offer or sale of a payment 
 stablecoin if--
            (i) the payment stablecoin was issued by a 
 foreign payment stablecoin issuer;
            (ii) the foreign payment stablecoin issuer 
 is subject to regulation by a foreign payment 
 stablecoin regulator of a nation with a payment 
 stablecoin regulatory regime that the Secretary 
 of the Treasury determines under subparagraph
        (B) is comparable to the requirements under 
 this Act; and
            (iii) the foreign payment stablecoin issuer 
 consents to be subject to reporting and 
 examination requirements, as determined by--
            (I) the Comptroller, if the foreign 
 payment stablecoin issuer is a nonbank; 
 or
            (II) the Board, if the foreign 
 payment stablecoin issuer is a banking 
 institution or subsidiary thereof.
        (B) Determination.--With respect to a foreign 
 nation, the Secretary of the Treasury shall determine, 
 upon request of a foreign payment stablecoin issuer, a 
 foreign payment stablecoin regulator, or on the 
 Secretary's own initiative, and in consultation with 
 the Federal payment stablecoin regulators, whether the 
 payment stablecoin regulatory regime of such nation is 
 comparable to the requirements under this Act.
            (C) Public notice.--The Secretary shall make the 
 list of nations for which a determination has been made 
 under subparagraph
        (B) available to the public, and 
 keep such list current.
            (D) Rescinding determinations.--
            (i) Secretarial action.--The Secretary may, 
 in consultation with the primary Federal 
 payment stablecoin regulators, rescind a 
 determination made under subparagraph
        (B) with 
 respect to a foreign nation, if the Secretary 
 determines that the regulatory regime of such 
 nation is no longer comparable to the 
 requirements under this Act.
            (ii) Safeharbors.--If the Secretary 
 rescinds a determination pursuant to clause
            (i) , a custodial intermediary shall not be in 
 violation of this subsection by reason of the 
 offer or sale of a payment stablecoin issued by 
 such nation's foreign payment stablecoin issuer 
 until 90 days after the determination is 
 rescinded.

    (3) Penalty.--Any person who violates this subsection shall 
 be subject to a civil penalty of not more than $100,000 for 
 each day during which such violation continues.
            (c) Rulemaking.--Not later than 12 months after the date of 
enactment of this Act, the Secretary shall issue such rules as may be 
required to carry out this section.
            (d) Rule of Construction.--This section does not apply to 
transactions in digital assets for an individual's own lawful purposes 
by means of a software or hardware wallet that facilitates such 
individual's own custody of digital assets.

SEC. 4. REQUIREMENTS FOR ISSUING PAYMENT STABLECOINS.

    (a) Standards for the Issuance of Payment Stablecoins.--

    (1) In general.--Each permitted payment stablecoin issuer 
 shall--
        (A) maintain reserves backing the issuer's 
 outstanding payment stablecoins on an at least 1 to 1 
 basis, with reserves comprising--
            (i) United States 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) at insured depository 
 institutions (including foreign branches and 
 agencies of insured depository institutions) or 
 approved foreign depository institutions (as 
 determined in paragraph

    (5)
        (A)
            (v) ) or share 
 drafts (or other deposits that may be withdrawn 
 upon request at any time) at insured credit 
 unions, subject to limitations established by 
 the Corporation and the National Credit Union 
 Administration, respectively, to address safety 
 and soundness risks of such insured depository 
 institutions;
            (iii) 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) repurchase agreements, wherein the 
 permitted payment stablecoin issuer is acting 
 as a seller of securities, or reverse 
 repurchase agreements, wherein the permitted 
 payment stablecoin issuer is acting as a 
 purchaser of securities, with an overnight 
 maturity and that are backed by Treasury bills 
 with a maturity of 93 days or less that are--
            (I) centrally cleared through a 
 clearing agency registered with the 
 Securities and Exchange Commission; or
            (II) bilateral, settling either 
 through delivery versus payment or 
 through a tri-party control account, 
 with a counterparty that the issuer has 
 determined to be adequately credit 
 worthy even in the event of severe 
 market stress; or
            (v) securities issued by an investment 
 company under 

section 8

    (a) of the Investment 
 Company Act of 1940 (15 U.S.C. 80a-8) that 
 operates as a money market fund in compliance 
 with Rule 2a-7 under the Investment Company Act 
 of 1940 (or any successor rule) and that are 
 invested solely in the underlying assets 
 described in clauses
            (i) through
            (iv) ;
        (B) publicly disclose the issuer's redemption 
 policy;
            (C) establish procedures for timely redemption of 
 the issuer's outstanding payment stablecoins; and
            (D) publish a report on 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 under subparagraph
        (A) .

    (2) Eligibility.--Nothing in this Act shall be construed as 
 expanding or contracting legal eligibility to make deposits, or 
 hold an account, at a Federal reserve bank.

    (3) Prohibition on rehypothecation.--Reserves described 
 under paragraph

    (1)
        (A) may not be pledged, rehypothecated, or 
 reused, except for the purpose of satisfying obligations 
 associated with reserves described under paragraph

    (1)
        (A)
            (iv) .

    (4) 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 an independent 
 registered public accounting firm.
        (B) Certification.--Each month, the Chief Executive 
 Officer and Chief Financial Officer of a permitted 
 payment stablecoin issuer shall submit to, as 
 applicable, the primary Federal payment stablecoin 
 regulator or, in the case of a State qualified payment 
 stablecoin issuer, the State payment stablecoin 
 regulator, a certification that, based on such 
 officers' knowledge, the previous month-end report 
 required under paragraph

    (1)
            (D) --
            (i) does not contain any untrue statement 
 of material fact or omit to state a material 
 fact necessary in order to make the statements 
 made, in light of the circumstances under which 
 such statements were made, not misleading; and
            (ii) fairly presented in all material 
 respects the information required under 
 paragraph

    (1)
            (D) for the period presented in 
 such report.
            (C) Criminal penalties.--Whoever--
            (i) submits a certification set forth in 
 subparagraph
        (B) knowing that the report to 
 which the certification relates does not fairly 
 present, in all material respects, the 
 information required to be contained in such 
 report shall be fined not more than $1,000,000 
 or imprisoned not more than 10 years, or both; 
 or
            (ii) willfully submits a certification set 
 forth in subparagraph
        (B) knowing that the 
 report to which the certification relates does 
 not fairly present, in all material respects, 
 the information required to be contained in 
 such report shall be fined not more than 
 $5,000,000, or imprisoned not more than 20 
 years, or both.

    (5) Capital, liquidity, risk management, and other 
 requirements.--
        (A) In general.--The primary Federal payment 
 stablecoin regulators shall, jointly and in 
 consultation with the State payment stablecoin 
 regulators, issue rules to establish--
            (i) capital requirements applicable to a 
 permitted payment stablecoin issuer that--
            (I) are tailored to the business 
 model and risk profile of a permitted 
 payment stablecoin issuer;
            (II) do not exceed requirements 
 which are sufficient to ensure the 
 ongoing operations of a permitted 
 payment stablecoin issuer; and
            (III) if such regulators determine 
 that a capital buffer is necessary to 
 ensure the ongoing operations of a 
 permitted payment stablecoin issuer, 
 may include capital buffers that are 
 tailored to the business model and risk 
 profile of a permitted payment 
 stablecoin issuer;
            (ii) requirements implementing liquidity 
 standards applicable to reserves described in 
 paragraph

    (1) for a permitted payment 
 stablecoin issuer, which may not exceed an 
 amount that is sufficient to ensure the 
 financial integrity of a permitted payment 
 stablecoin issuer and the ability of the issuer 
 to meet the financial obligations of the 
 issuer, including redemptions;
            (iii) reserve asset diversification and 
 interest rate risk management standards 
 applicable to a permitted payment stablecoin 
 issuer that--
            (I) are tailored to the business 
 model and risk profile of a permitted 
 payment stablecoin issuer; and
            (II) do not exceed standards which 
 are sufficient to ensure the ongoing 
 operations of a permitted payment 
 stablecoin issuer; and
            (iv) appropriate operational, compliance, 
 information technology, and cybersecurity risk 
 management standards that are tailored to the 
 business model and risk profile of a permitted 
 payment stablecoin issuer; and
            (v) requirements regarding the approval of 
 foreign depository institutions that may hold 
 demand deposits of a permitted payment 
 stablecoin issuer.
        (B) Rule of construction.--Nothing in this 
 paragraph may 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 permitted payment 
 stablecoin issuers on an individualized basis 
 or by category, taking into consideration the 
 capital structure, business model risk profile, 
 complexity, financial activities, size, and any 
 other risk related factors of permitted payment 
 stablecoin issuers that the primary Federal 
 payment stablecoin regulators determine 
 appropriate; or
            (ii) the supervisory, regulatory, or 
 enforcement authority of a Federal banking 
 agency (as defined in 

section 3 of the Federal 
 Deposit Insurance Act (12 U.S.C. 1813)) or the 
 National Credit Union Administration to further 
 the ability of an institution under the 
 supervision of the Federal banking agency or 
 the National Credit Union Administration to 
 maintain safe and sound operations or comply 
 with this Act.
            (C) Applicability of existing capital standards.--
            (i) Applicability of the financial 
 stability act of 2010.--

Section 171 of the 
 Financial Stability Act of 2010 (12 U.S.C. 
 5371) shall not apply to requirements issued 
 under this paragraph.
            (ii) Rules relating to leverage capital 
 requirements or risk-based capital 
 requirements.--Where an insured depository 
 institution or depository institution holding 
 company, as defined under 

section 171

    (a)

    (3) of 
 the Financial Stability Act of 2010 (12 U.S.C. 
 5371

    (a)

    (3) ), includes, on a consolidated basis, 
 a permitted payment stablecoin issuer, any rule 
 issued by an appropriate Federal banking agency 
 that imposes, on a consolidated basis, a 
 leverage capital requirement or risk-based 
 capital requirement on such insured depository 
 institution or depository institution holding 
 company, shall not require such insured 
 depository institution or depository 
 institution holding company to hold, with 
 respect to the permitted payment stablecoin 
 issuer and its assets and operations, any 
 amount of regulatory capital in excess of the 
 capital that such permitted payment stablecoin 
 issuer must maintain under the capital 
 requirements promulgated pursuant to 
 subparagraph
        (A)
            (i) .
            (iii) Rulemaking.--Not later than the date 
 the primary Federal payment stablecoin 
 regulators issue regulations to carry out this 
 section, each Federal banking agency, as 
 defined in 

section 3 of the Federal Deposit 
 Insurance Act (12 U.S.C. 1813), shall amend or 
 otherwise modify any rule described in clause
            (ii) so that it complies with such clause
            (ii) .

    (6) Treatment under the bank secrecy act.--
        (A) In general.--A permitted payment stablecoin 
 issuer shall be treated as a financial institution for 
 purposes of the Bank Secrecy Act.
        (B) Regulations.--The Secretary of the Treasury, 
 acting through the Director of the Financial Crimes 
 Enforcement Network, and in consultation with the 
 primary Federal payment stablecoin regulators, shall 
 issue regulations to apply the Bank Secrecy Act to 
 permitted payment stablecoin issuers that are tailored 
 to the size and complexity of such issuers, including 
 by requiring each permitted payment stablecoin issuer 
 to--
            (i) establish and maintain an anti-money 
 laundering and countering the financing of 
 terrorism program, which shall include--
            (I) an appropriate risk assessment;
            (II) the development of internal 
 policies, procedures, and controls;
            (III) the designation of a 
 compliance officer;
            (IV) an ongoing employee training 
 program; and
            (V) an independent audit function 
 to test such program;
            (ii) retain appropriate records of payment 
 stablecoin transactions;
            (iii) monitor and report suspicious 
 activity, which may include use of appropriate 
 distributed ledger analytics; and
            (iv) maintain an effective customer 
 identification program to identify and verify 
 initial holders of a payment stablecoin for the 
 purposes of carrying out appropriate customer 
 due diligence.

    (7) Compliance with sanctions.--A permitted payment 
 stablecoin issuer shall comply with all laws and regulations 
 related to United States sanctions administered by the Office 
 of Foreign Assets Control.

    (8) Limitation on payment stablecoin activities.--A 
 permitted payment stablecoin issuer may only--
        (A) issue payment stablecoins;
        (B) redeem payment stablecoins;
            (C) manage related reserves (including purchasing, 
 selling, and holding reserve assets);
            (D) provide custodial or safekeeping services for 
 payment stablecoins and private keys of payment 
 stablecoins;
        (E) provide custodial or safekeeping services for 
 reserves, consistent with this Act;
        (F) undertake other functions that directly support 
 activities described in subparagraphs
        (A) through
        (E) ; 
 and
        (G) undertake such non-payment stablecoin 
 activities that are allowed by the primary Federal 
 payment stablecoin regulator.

    (9) Prohibition on yield.--A permitted payment stablecoin 
 issuer may not pay interest or yield to holders of its payment 
 stablecoins.

    (10) Regulation of federal qualified nonbank payment 
 stablecoin issuers by the comptroller.--A Federal qualified 
 nonbank payment stablecoin issuer shall be regulated and 
 supervised exclusively by the Comptroller.

    (b) State-level Regulatory Regimes.--

    (1) In general.--A State qualified payment stablecoin 
 issuer may only issue payment stablecoins pursuant to the 
 regulation of a State payment stablecoin regulator of a State 
 with a regulatory regime for issuing payment stablecoins that 
 is certified under this subsection as meeting or exceeding the 
 standards and requirements described in subsection

    (a) .

    (2) Certification.--
        (A) In general.--Beginning on the date that is 1 
 year after the date of enactment of this Act or 60 days 
 after the rulemaking described in subsection
            (d) is 
 completed, whichever is earlier, a State payment 
 stablecoin regulator may submit to the Secretary of the 
 Treasury a certification that the regulatory regime of 
 the State for issuing payment stablecoins meets or 
 exceeds the standards and requirements described in 
 subsection

    (a) .
        (B) Validity of certification.--A certification 
 under subparagraph
        (A) shall be valid upon submission 
 and remain valid unless the Secretary of the Treasury 
 rejects the certification under paragraph

    (6) .

    (3) Form of certification.--A certification described under 
 paragraph

    (2) --
        (A) shall contain an attestation that the 
 regulatory regime of the State for issuing payment 
 stablecoins meets or exceeds the standards and 
 requirements described in subsection

    (a) ; and
        (B) may include supporting information, such as a 
 copy of any State law or regulation implementing such 
 standards and requirements.

    (4) Report and attestation.--
        (A) In general.--A State payment stablecoin 
 regulator with a valid certification under this 
 subsection that has made subsequent material changes to 
 its State regulatory regime and wishes to maintain a 
 valid certification shall submit to the Secretary of 
 the Treasury an explanation of all such material 
 changes.
        (B) Form of material changes explanation.--With 
 respect to a State payment stablecoin regulator that 
 submits an explanation of material changes to the State 
 regulatory regime under subparagraph
        (A) , the payment 
 stablecoin regulator shall make such explanation in the 
 same manner, and containing the same attestation, as 
 described under paragraph

    (3) for a certification.

    (5) Advisory opinions on proposed laws or regulations.--
 Upon request of any State payment stablecoin regulator, the 
 Secretary of the Treasury shall--
        (A) review any proposed law or regulation of the 
 State provided by the State payment stablecoin 
 regulator; and
        (B) not later than 30 days after being provided the 
 proposed law or regulation, either--
            (i) inform the State payment stablecoin 
 regulator that the proposed law or regulation 
 is consistent with a State regulatory regime 
 for issuing payment stablecoins that meets or 
 exceeds the standards and requirements 
 described in subsection

    (a) ; or
            (ii) provide the State payment stablecoin 
 regulator with a detailed explanation of why 
 the proposed law or regulation is not 
 consistent with a State regulatory regime for 
 issuing payment stablecoins that meets or 
 exceeds the standards and requirements 
 described in subsection

    (a) .

    (6) Regimes that are not substantially similar.--
        (A) In general.--The Secretary of the Treasury may 
 reject a certification under paragraph

    (2) or a 
 certification with respect to which a State payment 
 stablecoin regulator has submitted an explanation of 
 material changes under paragraph

    (4) , if the Secretary, 
 not later than 30 days after the date on which the 
 initial certification or explanation of material 
 changes is submitted--
            (i) determines that the State regulatory 
 regime does not meet or exceed the standards 
 and requirements described in subsection

    (a) ; 
 and
            (ii) provides the State payment stablecoin 
 regulator with a written explanation for the 
 rejection, describing the reasoned basis for 
 the rejection with sufficient detail such that 
 the State can bring the State regulatory regime 
 into compliance based on the explanation.
        (B) Opportunity to cure.--
            (i) In general.--With respect to a 
 rejection described under subparagraph
        (A) , the 
 Secretary of the Treasury shall provide the 
 State payment stablecoin regulator with not 
 less than a 180-day period from the date on 
 which the State payment stablecoin regulator is 
 notified of such rejection to--
            (I) make such changes as may be 
 necessary to ensure the regulatory 
 regime of the State for issuing payment 
 stablecoins meets or exceeds the 
 standards and requirements described in 
 subsection

    (a) ; and
            (II) resubmit the certification or 
 explanation of material changes.
            (ii) Rejection.--If, after a State payment 
 stablecoin regulator makes changes described 
 under clause
            (i) during the period described in 
 clause
            (i) , the Secretary of the Treasury 
 determines that the certification should be 
 rejected, the Secretary of the Treasury shall, 
 not later than 30 days after such 
 determination, provide the State payment 
 stablecoin regulator with a written explanation 
 for the determination, describing the reasoned 
 basis for the determination with sufficient 
 detail such that the State can bring its regime 
 into compliance based on the explanation.
            (C) Appeal of rejection.--
            (i) In general.--A State payment stablecoin 
 regulator that has had a certification rejected 
 under this paragraph may, after the cure period 
 described under subparagraph
        (B)
            (i) , appeal 
 such rejection to the United States Court of 
 Appeals for the District of Columbia Circuit, 
 which shall, upon a determination that the 
 regulatory regime of the State for issuing 
 payment stablecoins meets or exceeds the 
 standards and requirements described in 
 subsection

    (a) , reverse such rejection.
            (ii) Review by the supreme court.--The 
 judgment and decree of the Court of Appeals 
 shall be final, except that the same shall be 
 subject to review by the Supreme Court upon 
 certiorari, as provided in 

section 1254 of 
 title 28, United States Code.
            (D) Right to resubmit.--A State payment stablecoin 
 regulator that has had a certification rejected under 
 this paragraph may resubmit a new certification under 
 paragraph

    (2) .

    (7) Appropriate exemptive relief.--The Secretary of the 
 Treasury shall issue such rules and orders as are necessary to 
 provide appropriate exemptive relief and safe harbors for State 
 qualified payment stablecoin issuers to continue operations 
 during such periods in which any rules promulgated pursuant to 
 subsection

    (a) materially affect a previously certified State 
 regulatory regime's ability to meet or exceed the standards and 
 requirements described in subsection

    (a) .
            (c) Not Insured by the Federal Government; Misrepresentation of 
Insured Status.--

    (1) In general.--Payment stablecoins are not backed by the 
 full faith and credit of the United States, guaranteed by the 
 United States Government, subject to deposit insurance by the 
 Corporation, or subject to share insurance by the National 
 Credit Union Administration.

    (2) Misrepresentation of insured status.--It shall be 
 unlawful to represent that a payment stablecoin is 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.

    (3) Disclosure.--Permitted payment stablecoin issuers shall 
 clearly and prominently disclose on their website that payment 
 stablecoins issued by such permitted payment stablecoin issuer 
 are not guaranteed by the United States Government, covered by 
 deposit insurance by the Federal Deposit Insurance Corporation, 
 or covered by share insurance of the National Credit Union 
 Administration.

    (4) Penalties.--Any person who violates this subsection may 
 be prosecuted to the fullest extent of the law, including, as 
 applicable, under--
        (A) section 18

    (a)

    (4) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1828

    (a)

    (4) ; relating to the 
 prohibition on false advertising in connection with 
 deposit insurance, the misuse of FDIC names, and 
 misrepresentations of insured status);
        (B) section 709 of title 18, United States Code 
 (relating to false advertising or misuse of names to 
 indicate a Federal agency);
            (C) criminal penalties under title 18, United 
 States Code, related to fraud; and
            (D) other remedies available under the law.
            (d) Officers and Directors Convicted of Certain Felonies.--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--

    (1) an officer of a payment stablecoin issuer; or

    (2) a director of a payment stablecoin issuer.

    (e) Rulemaking.--

    (1) In general.--The primary Federal payment stablecoin 
 regulators may issue such orders and regulations as may be 
 necessary to administer and carry out the requirements of this 
 section, including to establish conditions, and to prevent 
 evasions thereof.

    (2) Joint issuance of regulation.--All regulations issued 
 to carry out this section by the primary Federal payment 
 stablecoin regulators shall be issued jointly, after 
 consultation with State payment stablecoin regulators.

    (3) Rulemaking deadline.--Not later than the end of the 
 180-day period beginning on the date of enactment of this Act, 
 the Federal payment stablecoin regulators shall issue 
 regulations to carry out this section.

SEC. 5. APPROVAL OF SUBSIDIARIES OF INSURED DEPOSITORY INSTITUTIONS AND 
 SUBSIDIARIES OF NONBANK ENTITIES.

    (a) In General.--

    (1) Application.--
        (A) In general.--The primary Federal payment 
 stablecoin regulator shall receive, review, and 
 consider for approval applications from any insured 
 depository institution that seeks to issue payment 
 stablecoins through a subsidiary and any nonbank entity 
 that seeks to issue payment stablecoins through a 
 subsidiary.
        (B) Sharing of information.--With respect to 
 applications submitted by State-chartered insured 
 depository institutions, the primary Federal payment 
 stablecoin regulator shall share such applications with 
 the relevant State bank or State credit union 
 supervisor.
            (C) Completion of application.--
            (i) In general.--The primary Federal 
 payment stablecoin regulator shall consider an 
 application complete if such application 
 contains sufficient information for the primary 
 Federal payment stablecoin regulator to render 
 a decision on whether the application meets the 
 requirements set forth in 

section 4.
            (ii) Material change in circumstances.--An 
 application described under clause
            (i) that is 
 considered complete shall remain complete 
 unless the primary Federal payment stablecoin 
 regulator determines that a material change in 
 circumstances requires otherwise.

    (2) Evaluation of applications.--A complete application 
 received under paragraph

    (1) shall be evaluated by the primary 
 Federal payment stablecoin regulator based on the ability of 
 the subsidiary of the applicant to meet the requirements set 
 forth in 

section 4.

    (3) Timing for decision; grounds for denial.--
        (A) Timing.--The primary Federal payment stablecoin 
 regulator shall--
            (i) not later than 30 days after receiving 
 the application--
            (I) inform the applicant whether 
 the applicant has submitted a complete 
 application; and
            (II) if the application is not 
 complete, inform the applicant of the 
 additional information the applicant 
 must provide in order for the 
 application to be considered complete; 
 and
            (ii) not later than 120 days after 
 informing the applicant that the application is 
 complete, render a decision on an application.
        (B) Denial of application.--
            (i) Grounds for denial.--
            (I) In general.--The primary 
 Federal payment stablecoin regulator 
 may only deny a complete application 
 received under paragraph

    (1) if the 
 regulator determines that the 
 activities of the applicant would be 
 unsafe or unsound based on the ability 
 of the subsidiary of the applicant to 
 meet the requirements set forth in 
 

section 4.
            (II) Treatment of certain 
 issuances.--The issuance of a payment 
 stablecoin on an open, public, and 
 decentralized network shall not be a 
 valid ground for denial of an 
 application received under paragraph

    (1) .
            (ii) Explanation required.--If the primary 
 Federal payment stablecoin regulator denies a 
 complete application received under paragraph

    (1) , the regulator shall, not later than 30 
 days after the date of such denial, provide the 
 applicant with--
            (I) written notice explaining the 
 denial with specificity, including all 
 findings made by the regulator with 
 respect to all identified material 
 shortcomings in the application; and
            (II) actionable recommendations on 
 how the applicant could address the 
 identified material shortcomings.
            (iii) 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 subsection, 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, 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 appeal the denial, 
 to submit written materials, or to 
 provide oral testimony and oral 
 argument.
            (III) Final determination.--Not 
 later than 60 days after the date of a 
 hearing under this clause, the primary 
 Federal payment stablecoin regulator 
 shall notify the applicant of the final 
 determination of the primary Federal 
 payment stablecoin regulator with 
 respect to the appeal, which shall 
 contain a statement of the basis for 
 such determination, with specific 
 findings.
            (IV) Notice if no hearing.--If an 
 applicant does not make a timely 
 request for a hearing under this 
 clause, 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 clause, in 
 writing, that the denial of the 
 application is a final determination of 
 the primary Federal payment stablecoin 
 regulator.
            (C) Failure to render a decision.--If the primary 
 Federal payment stablecoin regulator fails to render a 
 decision on a complete application within the time 
 period specified in subparagraph
        (A) , the application 
 shall be deemed approved.
            (D) Right to reapply.--The denial of an application 
 under this subsection shall not prohibit the applicant 
 from filing a subsequent application.

    (4) Report on pending applications.--Each of the primary 
 Federal payment stablecoin regulators shall annually report to 
 Congress on--
        (A) the number of calendar days each applicant 
 waited for either an approval or denial of an 
 application under this subsection;
        (B) the number of calendar days each applicant with 
 an outstanding application has waited for a decision; 
 and
            (C) the number of applications that have been 
 pending for 6 months or longer since the date of the 
 initial application filed under paragraph

    (1) where the 
 applicant has been informed that the application 
 remains incomplete, including providing documentation 
 on the status of the application and why the 
 application has not yet been approved.

    (5) Rulemaking.--
        (A) In general.--Not later than 180 days after the 
 date of enactment of this Act, the primary Federal 
 payment stablecoin regulators shall, jointly, issue 
 rules to carry out this section, which may only relate 
 to the application process under this subsection and 
 may not implement the requirements set forth in 

section 4.
        (B) Tailoring of rules.--The joint rulemaking 
 required under subparagraph
        (A) shall be tailored so as 
 to minimize any incremental burden placed on well 
 capitalized and highly-rated insured depository 
 institutions.

    (b) Effective Date.--

    (1) In general.--This section shall take effect on the 
 earlier of--
        (A) 12 months after the date of enactment of this 
 Act; or
        (B) the date that is 120 days after the date on 
 which the primary Federal payment stablecoin regulators 
 issue final regulations implementing this section.

    (2) Notice to congress.--Each of the primary Federal 
 payment stablecoin regulators shall notify Congress upon 
 receiving their first application.
            (c) Effect on State Law for Payment Stablecoin Issuers Approved by 
Federal Payment Stablecoin Regulators Under This Section.--The 
provisions of this section preempt any conflicting State law and 
supersede any State licensing requirement for any nonbank entity or 
subsidiary of an insured depository institution or credit union that is 
approved under this section to be a permitted payment stablecoin 
issuer.

SEC. 6. SUPERVISION AND ENFORCEMENT WITH RESPECT TO SUBSIDIARIES OF 
 INSURED DEPOSITORY INSTITUTIONS AND FEDERAL QUALIFIED 
 NONBANK PAYMENT STABLECOIN ISSUERS.

    (a) Supervision.--

    (1) Subsidiary of an insured depository institution.--
        (A) In general.--Each permitted payment stablecoin 
 issuer that is a subsidiary of an insured depository 
 institution shall be subject to supervision by the 
 primary Federal payment stablecoin regulator in the 
 same manner as such insured depository institution.
        (B) Gramm-Leach-Bliley act.--For purposes of title 
 V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et 
 seq.) each permitted payment stablecoin issuer that is 
 a subsidiary of an insured depository institution shall 
 be deemed a financial institution.

    (2) Federal qualified nonbank payment stablecoin issuer.--
        (A) Submission of reports.--Each Federal qualified 
 nonbank payment stablecoin issuer shall, upon request, 
 submit reports to the Comptroller as to--
            (i) the financial condition of the Federal 
 qualified nonbank payment stablecoin issuer;
            (ii) the systems of the Federal qualified 
 nonbank payment stablecoin issuer for 
 monitoring and controlling financial and 
 operating risks; and
            (iii) compliance with this Act and 
 regulations issued pursuant to this Act by the 
 Federal qualified nonbank payment stablecoin 
 issuer.
        (B) Examinations.--The Comptroller may examine a 
 Federal qualified nonbank payment stablecoin issuer in 
 order to inform the Comptroller of--
            (i) the nature of the operations and 
 financial condition of the Federal qualified 
 nonbank payment stablecoin issuer;
            (ii) the financial, operational, and other 
 risks within the Federal qualified nonbank 
 payment stablecoin issuer that may pose a 
 threat to--
            (I) the safety and soundness of the 
 Federal qualified nonbank payment 
 stablecoin issuer; or
            (II) the stability of the financial 
 system of the United States;
            (iii) the systems of the Federal qualified 
 nonbank payment stablecoin issuer for 
 monitoring and controlling the risks described 
 in clause
            (ii) ;
            (iv) the compliance of the Federal 
 qualified nonbank payment stablecoin issuer 
 with this Act and regulations issued pursuant 
 to this Act; and
            (v) the compliance of the Federal qualified 
 nonbank payment stablecoin issuer with the 
 requirements of the Bank Secrecy Act and laws 
 authorizing the imposition of sanctions and 
 implemented by the Secretary of the Treasury.
            (C) Requirements for efficiency.--In supervising 
 and examining a Federal qualified nonbank payment 
 stablecoin issuer, the Comptroller shall, to the 
 fullest extent possible, use existing reports and other 
 supervisory information.
            (D) Avoidance of duplication.--The Comptroller 
 shall, to the fullest extent possible, avoid 
 duplication of examination activities, reporting 
 requirements, and requests for information in carrying 
 out this Act with respect to a Federal qualified 
 nonbank payment stablecoin issuer.
        (E) Gramm-Leach-Bliley act.--For purposes of title 
 V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et 
 seq.) each Federal qualified nonbank payment stablecoin 
 issuer shall be deemed a financial institution.

    (b) Enforcement.--

    (1) Suspension or revocation of registration.--The primary 
 Federal payment stablecoin regulator may prohibit a permitted 
 payment stablecoin issuer from issuing payment stablecoins, if 
 the primary Federal payment stablecoin regulator determines 
 that such permitted payment stablecoin issuer, or an 
 institution-affiliated party of the permitted payment 
 stablecoin issuer, is--
        (A) materially violating or has materially violated 
 this Act or any regulation or order issued under this 
 Act, including the issuer's obligations under the 
 

section 4

    (a)

    (6) ; or
        (B) materially violating or has materially violated 
 any condition imposed in writing by the primary Federal 
 payment stablecoin regulator in connection with a 
 written agreement entered into between the permitted 
 payment stablecoin issuer and the primary Federal 
 payment stablecoin regulator.

    (2) Cease-and-desist proceedings.--If the primary Federal 
 payment stablecoin regulator has reasonable cause to believe 
 that a permitted payment stablecoin issuer or any institution-
 affiliated party of a permitted payment stablecoin issuer is 
 violating, has violated, or is attempting to violate this Act, 
 any regulation or order issued under this Act, or any written 
 agreement entered into with the primary Federal payment 
 stablecoin regulator or condition imposed in writing by the 
 primary Federal payment stablecoin regulator in connection with 
 any application or other request, the primary Federal payment 
 stablecoin regulator may 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 may remove an institution-
 affiliated party of a permitted payment stablecoin issuer from 
 their position or office or prohibit further participation in 
 the affairs of the permitted payment stablecoin issuer or all 
 permitted payment stablecoin issuers by such institution-
 affiliated party, if the primary Federal payment stablecoin 
 regulator determines that--
        (A) the institution-affiliated party has, directly 
 or indirectly, committed a violation or attempted 
 violation of this Act or any regulation or order issued 
 under this Act; or
        (B) the institution-affiliated party has committed 
 a violation of any provision of subchapter II of 
 chapter 53 of title 31, United States Code.

    (4) Procedures.--
        (A) In general.--If the primary Federal payment 
 stablecoin regulator identifies a violation or 
 attempted violation of this Act or makes a 
 determination under paragraph

    (1) ,

    (2) , or

    (3) , the 
 primary Federal payment stablecoin regulator shall 
 comply with the procedures set forth, as applicable, 
 in--
            (i) subsections

    (b) and

    (e) of sections 8 
 of the Federal Deposit Insurance Act (12 U.S.C. 
 1818); or
            (ii) subsections

    (e) and

    (g) of 

section 206 
 of the Federal Credit Union Act (12 U.S.C. 
 1786).
        (B) Judicial review.--A person aggrieved by a final 
 action under this subsection may obtain judicial review 
 of such action exclusively as provided, as applicable, 
 in--
            (i) section 8

    (h) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1818

    (h) ); or
            (ii) section 206

    (j) of the Federal Credit 
 Union Act (12 U.S.C. 1786

    (j) ).
            (C) Injunction.--The primary Federal payment 
 stablecoin regulator may, in the discretion of the 
 regulator, follow the procedures for judicial 
 enforcement of any effective and outstanding notice or 
 order issued under this subsection provided, as 
 applicable, in--
            (i) section 8
            (i) (1) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1818
            (i) (1) ); or
            (ii) section 206

    (k)

    (1) of the Federal 
 Credit Union Act (12 U.S.C. 1786

    (k)

    (1) ).
            (D) Temporary cease-and-desist proceedings.--If the 
 primary Federal payment stablecoin regulator determines 
 that a violation or attempted violation of this Act or 
 an action with respect to which a determination was 
 made under paragraph

    (1) ,

    (2) , or

    (3) , or the 
 continuation thereof, is likely to cause insolvency or 
 significant dissipation of assets or earnings of a 
 permitted payment stablecoin issuer, or is likely to 
 weaken the condition of the permitted payment 
 stablecoin issuer or otherwise prejudice the interests 
 of the customers of the permitted payment stablecoin 
 issuer prior to the completion of the proceedings 
 conducted under this paragraph, the primary Federal 
 payment stablecoin regulator may follow the procedures 
 provided, as applicable, in--
            (i) section 8
            (c) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1818
            (c) ) to issue a 
 temporary cease-and-desist order; or
            (ii) section 206

    (f) of the Federal Credit 
 Union Act (12 U.S.C. 1786

    (f) ) to issue a 
 temporary cease-and-desist order.

    (5) Civil money penalties.--
        (A) Failure to be approved.--Any person who issues 
 a payment stablecoin and who is not a permitted payment 
 stablecoin issuer, 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 outstanding.
        (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 primary Federal payment stablecoin regulator in 
 connection with a written agreement entered into 
 between the permitted payment stablecoin issuer and the 
 primary Federal payment stablecoin regulator, shall be 
 liable for a civil penalty of up to $100,000 for each 
 day during which the violation continues.
            (C) Second tier.--Except as provided in 
 subparagraph
        (A) , and in addition to the penalties 
 described under subparagraph
        (B) , a permitted payment 
 stablecoin issuer or institution-affiliated party of 
 such permitted payment stablecoin issuer who knowingly 
 participates in a violation of any provision of this 
 Act, or any regulation or order issued thereunder, is 
 liable for a civil penalty of up to an additional 
 $100,000 for each day during which the violation 
 continues.
            (D) Procedure.--Any penalty imposed under this 
 paragraph may be assessed and collected by the primary 
 Federal payment stablecoin regulator pursuant to the 
 procedures set forth, as applicable, in--
            (i) section 8
            (i) (2) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1818
            (i) (2) ); or
            (ii) section 206

    (k)

    (2) of the Federal 
 Credit Union Act (12 U.S.C. 1786

    (k)

    (2) ).
        (E) Notice and orders after separation from 
 service.--The resignation, termination of employment or 
 participation, or separation of an institution-
 affiliated party (including a separation caused by the 
 closing of a permitted payment stablecoin issuer) shall 
 not affect the jurisdiction and authority of the 
 primary Federal payment stablecoin regulator to issue 
 any notice or order and proceed under this subsection 
 against any such party, if such notice or order is 
 served before the end of the 6-year period beginning on 
 the date such party ceased to be an institution-
 affiliated party with respect to such permitted payment 
 stablecoin issuer.

    (6) Non-applicability to a state qualified payment 
 stablecoin issuer.--This subsection shall not apply to a State 
 qualified payment stablecoin issuer, except as described in 
 

section 7

    (e) .
            (c) Sharing of Information.--A State payment stablecoin regulator 
and the primary Federal payment stablecoin regulator shall share 
information on an ongoing basis with respect to a permitted payment 
stablecoin issuer that is a subsidiary of a State-chartered insured 
depository institution.

SEC. 7. STATE QUALIFIED PAYMENT STABLECOIN ISSUERS.

    (a) In General.--With respect to a State, a State payment 
stablecoin regulator shall have supervisory, examination, and 
enforcement authority over a State qualified payment stablecoin issuer 
of such State.

    (b) Authority to Enter Into Agreements.--

    (1) In general.--A State payment stablecoin regulator may 
 enter into a memorandum of understanding with the primary 
 Federal banking agency and Comptroller setting out the manner 
 in which the primary Federal banking agency and Comptroller may 
 participate in the supervision, examination, and enforcement 
 authority with respect to the State qualified payment 
 stablecoin issuers of such State.

    (2) Rule of construction.--Nothing in this subsection or a 
 memorandum entered into under this subsection may be construed 
 to limit the authority of the primary Federal banking agency or 
 Comptroller under subsection

    (e) or any other provision of law.
            (c) Sharing of Information.--

    (1) In general.--A State payment stablecoin regulator and, 
 as applicable, the Comptroller, the Board, the Corporation, or 
 the National Credit Union Administration shall share 
 information on an ongoing basis with respect to each State 
 qualified payment stablecoin issuer of such State, including a 
 copy of all initial applications and any accompanying 
 documents.

    (2) Privileges not affected by sharing of information.--The 
 sharing of information under paragraph

    (1) shall not be 
 construed as waiving, destroying, or otherwise affecting any 
 privilege applicable to such information under Federal or State 
 law as to any person or entity other than the State payment 
 stablecoin regulator, the Comptroller, the Board, the 
 Corporation, and the National Credit Union Administration.
            (d) Rulemaking.--A State payment stablecoin regulator may, to the 
same extent as the primary Federal payment stablecoin regulators issue 
orders and rules under 

section 4 applicable to a permitted payment 
stablecoin issuer that is not a State qualified payment stablecoin 
issuer, issue orders and rules related to the requirements under 

section 4 applicable to State qualified payment stablecoin issuers.

    (e) Back-up Enforcement Authority.--

    (1) By the primary federal banking agency.--
        (A) In general.--Subject to subparagraph
            (C) , the 
 primary Federal banking agency may, after not less than 
 48 hours prior written notice to any applicable State 
 payment stablecoin regulator, take an enforcement 
 action against a State qualified payment stablecoin 
 issuer that is a subsidiary of an insured depository 
 institution or an institution-affiliated party thereof 
 for violations of this Act if--
            (i) the applicable State payment stablecoin 
 regulator has not commenced an enforcement 
 action to correct such violation; and
            (ii) failure to take such action would 
 create a material risk of loss to holders of 
 such issuer's stablecoins or create a material 
 threat to U.S. financial stability.
        (B) Rulemaking.--Not later than the end of the 180-
 day period beginning on the date of enactment of this 
 Act, the primary Federal banking agencies shall issue 
 rules to set forth the standards that would be used by 
 the primary Federal banking agencies to exercise the 
 back-up authority under this paragraph.
            (C) Back-up authority under 

section 6

    (b) .--Solely 
 for purposes of carrying out this paragraph, 

section 6

    (b) shall apply to a State qualified payment 
 stablecoin issuer that is a subsidiary of an insured 
 depository institution as if the primary Federal 
 banking agency were the primary Federal payment 
 stablecoin regulator with respect to the State 
 qualified payment stablecoin issuer.
            (D) Primary federal banking agency defined.--In 
 this section--
            (i) the term ``primary Federal banking 
 agency'' means--
            (I) the appropriate Federal banking 
 agency; and
            (II) the National Credit Union 
 Administration, in the case of an 
 insured credit union; and
            (ii) the term ``primary Federal banking 
 agencies'' means the Board, the Comptroller, 
 the Corporation, and the National Credit Union 
 Administration.

    (2) By the comptroller.--
        (A) In general.--Subject to subparagraph
            (C) , the 
 Comptroller may, after not less than 48 hours prior 
 written notice to any applicable State payment 
 stablecoin regulator, take an enforcement action 
 against a State qualified payment stablecoin issuer 
 that is a nonbank entity or an institution-affiliated 
 party thereof for violations of this Act if--
            (i) the applicable State payment stablecoin 
 regulator has not commenced an enforcement 
 action to correct such violation; and
            (ii) failure to take such action would 
 create a material risk of loss to holders of 
 such issuer's stablecoins or create a material 
 threat to U.S. financial stability.
        (B) Rulemaking.--Not later than the end of the 180-
 day period beginning on the date of enactment of this 
 Act, the Comptroller shall issue rules to set forth the 
 standards that would be used by the Comptroller to 
 exercise the back-up authority under this paragraph.
            (C) Back-up authority under 

section 6

    (b) .--Solely 
 for purposes of carrying out this paragraph, 

section 6

    (b) shall apply to a State qualified payment 
 stablecoin issuer that is a nonbank entity as if the 
 Comptroller were the primary Federal payment stablecoin 
 regulator with respect to the State qualified payment 
 stablecoin issuer.

    (f) Gramm-Leach-Bliley Act.--For purposes of title V of the Gramm-
Leach-Bliley Act (15 U.S.C. 6801 et seq.) a State qualified payment 
stablecoin issuer is deemed a financial institution.

    (g) Interstate Payment Stablecoin Market.--

    (1) === Definitions. ===
-For the purposes of this subsection--
        (A) the term ``home State'' means the State of a 
 State qualified payment stablecoin issuer's State 
 payment stablecoin regulator; and
        (B) the term ``host State'' means a State other 
 than that of the State qualified payment stablecoin 
 issuer's State payment stablecoin regulator.

    (2) Authority to issue payment stablecoins in host 
 states.--Subject to the requirements of paragraph

    (3) , a State 
 qualified payment stablecoin issuer may issue payment 
 stablecoins in a host State without a charter or license to 
 issue payment stablecoins from such host State.

    (3) State obligations.--Where a State qualified payment 
 stablecoin issuer issues a payment stablecoin in a host State 
 pursuant to paragraph

    (2) --
        (A) such State qualified payment stablecoin issuer 
 shall notify any State payment stablecoin regulator in 
 such host State of the issuer's intention to do 
 business in the host State not less than 30 days before 
 such issuer commences business in the host State and in 
 a manner prescribed by the host State's State payment 
 stablecoin regulator or State banking regulator if such 
 State does not have a regime certified under 

section 4

    (b) , provided that such notice does not impose a de 
 facto licensure or chartering requirement on such State 
 qualified payment stablecoin issuer;
        (B) such State qualified payment stablecoin issuer 
 shall comply with all requirements of the issuer's home 
 State regulatory regime when conducting business in the 
 host State, and where the host State maintains a 
 payment stablecoin regulatory regime that is certified 
 under 

section 4

    (b) , such issuer shall comply with any 
 obligations of the host State's payment stablecoin 
 regulatory regime that exceed those of such issuer's 
 home State regulatory regime;
            (C) where the host State does not maintain a 
 payment stablecoin regulatory regime that is certified 
 under 

section 4

    (b) , such State qualified payment 
 stablecoin issuer shall remain subject to all 
 applicable consumer protection laws of such host State; 
 and
            (D) where the host State maintains a payment 
 stablecoin regulatory regime that is certified under 
 

section 4

    (b) , such State qualified payment stablecoin 
 issuer shall remain subject to applicable consumer 
 protection laws of such host State, but only to the 
 same extent as State qualified payment stablecoin 
 issuers chartered or licensed in that host State.

SEC. 8. CUSTOMER PROTECTION.

    (a) In General.--A person may only engage in the business of 
providing custodial or safekeeping services for payment stablecoins 
issued by permitted payment stablecoin issuers, reserves described in 

section 4

    (a)

    (1)
        (A) , or private keys of payment stablecoins issued by 
permitted payment stablecoin issuers, 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 in 

section 3 of the Federal Deposit Insurance 
 Act (12 U.S.C. 1813) or a State credit union 
 supervisor, as defined in 

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) complies with the segregation requirements under 
 subsections

    (b) ,
            (c) , and
            (d) , unless such person complies with 
 similar requirements as required by the Board, the Comptroller, 
 the Corporation, the Securities and Exchange Commission, or the 
 Commodity Futures Trading Commission, as applicable.

    (b) Customer Property Requirements.--A person described in 
subsection

    (a) shall--

    (1) treat and deal with the payment stablecoins, private 
 keys, cash, and other property of another person for whom or on 
 whose behalf the person receives, acquires, or holds payment 
 stablecoins, private keys, cash, and other property 
 (hereinafter in this section referred to as the ``customer'') 
 as belonging to such customer and not as the property of such 
 person; and

    (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 stablecoins, cash, and other 
 property of a customer shall be separately accounted for by a 
 person described in subsection

    (a) and shall not be commingled 
 with the funds of the person.

    (2) Customer priority.--In any insolvency, claims against 
 reserves of a payment stablecoin issuer from persons holding 
 payment stablecoins issued by the payment stablecoin issuer 
 shall have priority over all other claims, other than for 
 administrative expenses, against the payment stablecoin issuer.

    (3) Exception.--Notwithstanding paragraph

    (1) --
        (A) the payment stablecoins, cash, and other 
 property of a customer may be commingled and deposited 
 in an omnibus account holding the payment stablecoins, 
 cash, and other property of more than 1 customer at a 
 depository institution (as defined in 

section 3 of the 
 Federal Deposit Insurance Act), trust company, Federal 
 credit union, or State credit union;
        (B) such share of the payment stablecoins, cash, 
 and other property of the customer that shall be 
 necessary to transfer, adjust, or settle a transaction 
 or transfer of assets may be withdrawn and applied to 
 such purposes, including the payment of commissions, 
 taxes, storage, and other charges lawfully accruing in 
 connection with the provision of services by a person 
 described in subsection

    (a) ;
            (C) in accordance with such terms and conditions as 
 the Board may prescribe by rule, regulation, or order, 
 any customer payment stablecoin, cash, and other 
 property described in this subsection may be commingled 
 and deposited in customer accounts with payment 
 stablecoins, cash, and other property received by the 
 person and required by the Board to be separately 
 accounted for, treated, and dealt with as belonging to 
 customers; and
            (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.
            (d) Regulatory Information.--A person described under subsection

    (a) shall submit to the primary Federal payment stablecoin regulator 
(or, if the person does not have a primary Federal payment stablecoin 
regulator, to the Board) information concerning the person's business 
operations and processes to protect customer payment stablecoins, cash, 
and other property, in such form and manner as the primary Federal 
payment stablecoin regulator (or, if the person does not have a primary 
Federal payment stablecoin regulator, the Board) 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. 9. RULE OF CONSTRUCTION.

 A digital asset shall not be construed to be a payment stablecoin 
if it is--

    (1) redeemable exclusively for other digital assets, 
 provided that such digital assets for which it is redeemable 
 are not primarily--
        (A) payment stablecoins; or
        (B) representations of permissible reserves 
 described under 

section 4

    (a)

    (1)
        (A) or similar such 
 assets; or

    (2) primarily used within a system controlled by such 
 digital asset's issuer as a means of accessing products, 
 services, or loyalty rewards.

SEC. 10. INTEROPERABILITY STANDARDS.

    (a) In General.--The primary Federal payment stablecoin regulators, 
in consultation with the National Institute of Standards and 
Technology, other relevant standard setting organizations, and State 
governments--

    (1) shall assess compatibility and interoperability 
 standards for permitted payment stablecoin issuers; and

    (2) 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 payment 
 stablecoin issuers to promote compatibility and 
 interoperability.

    (b) Agreements With Foreign Regulators.--The Secretary of the 
Treasury shall seek to enter into agreements with foreign jurisdictions 
with comparable payment stablecoin regulatory regimes to facilitate 
international transactions and interoperability with any United States 
dollar-denominated payment stablecoins issued overseas.

SEC. 11. MORATORIUM ON ENDOGENOUSLY COLLATERALIZED STABLECOINS.

    (a) Moratorium.--During the 2-year period beginning on the date of 
enactment of this Act, it shall be unlawful to issue an endogenously 
collateralized stablecoin not in existence on the date of enactment of 
this Act.

    (b) Endogenously Collateralized Stablecoin Defined.--In this 
section, the term ``endogenously collateralized stablecoin'' means any 
digital asset--

    (1) in which its issuer 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. 12. STUDIES AND REPORTS.

    (a) Study by Treasury.--The Secretary of the Treasury, in 
consultation with the Board, the Comptroller, the Corporation, the 
National Credit Union Administration, and the Securities and Exchange 
Commission, shall carry out a study of non-payment stablecoins, 
including decentralized stablecoins.

    (b) Report.--Not later than 365 days after the date of the 
enactment of this Act, the Secretary shall provide to the Committee on 
Financial Services of the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate a report that 
contains all findings made in carrying out the study under subsection

    (a) , including an analysis of--

    (1) the categories of non-payment stablecoins, including 
 the benefits and risks of technological design features;

    (2) the participants in non-payment stablecoin 
 arrangements;

    (3) utilization and potential utilization of non-payment 
 stablecoins;

    (4) nature of reserve compositions;

    (5) governance structure, including aspects of 
 decentralization;

    (6) nature of public promotion and advertising; and

    (7) clarity and availability of consumer notices and 
 disclosures.
            (c) Impact Study.--

    (1) In general.--The Secretary of the Treasury, in 
 consultation with the Board, the Comptroller, the Corporation, 
 the National Credit Union Administration, and the Securities 
 and Exchange Commission, shall carry out a study on the impact 
 of payment stablecoins.

    (2) Report.--Not later than 365 days after the date of 
 enactment of this Act, the Secretary shall provide the 
 Committee on Financial Services of the House of Representatives 
 and the Committee on Banking, Housing, and Urban Affairs of the 
 Senate a report containing all findings made in carrying out 
 the study under paragraph

    (1) , including an analysis of--
        (A) the impact of payment stablecoins on the cost 
 of domestic and cross-border payments and remittances;
        (B) the role of payment stablecoins in providing 
 access to a stable currency in the Global South;
            (C) the use of payment stablecoins by populations 
 in the Global South to mitigate exposure to the effects 
 of inflation;
            (D) the extent to which payment stablecoin adoption 
 reinforces the role of the United States dollar as the 
 world's reserve currency; and
        (E) the extent to which payment stablecoins may 
 expand demand for United States Treasury securities and 
 reduce the cost of United States Government borrowing.

SEC. 13. REPORT ON RULEMAKING STATUS.

 Not later than 6 months after the date of enactment of this Act, 
the primary Federal payment stablecoin regulators shall provide a 
status update on the development of the rulemaking under this Act to 
the Committee on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs of the Senate.

SEC. 14. AUTHORITY OF BANKING INSTITUTIONS.

    (a) Rule of Construction.--Nothing in this Act may be construed to 
limit the authority of a depository institution, national bank, Federal 
credit union, State credit union, or trust company to engage in 
activities permissible pursuant to applicable State and Federal law, 
including--

    (1) accepting or receiving deposits and issuing digital 
 assets that represent deposits;

    (2) utilizing a distributed ledger for the books and 
 records of the entity and to affect intrabank transfers; and

    (3) providing custodial services for payment stablecoins, 
 private keys of payment stablecoins, or reserves backing 
 payment stablecoins.

    (b) Regulatory Review.--The primary Federal payment stablecoin 
regulators shall review all existing regulations and guidance and, if 
necessary, amend such regulations or guidance or issue new regulations 
or guidance to clarify that regulated entities can engage in the 
payment stablecoin activities contemplated in, and in accordance with, 
this Act.
            (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 (the 
``entity'')--

    (1) to include 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 services;

    (2) to hold regulatory capital against assets, including 
 reserves backing such assets described in 

section 4

    (a)

    (1)
        (A) , 
 in custody or safekeeping, except as necessary to mitigate 
 against operational risks inherent with the 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 (as defined in 

section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
 1813)); or
            (D) a State credit union supervisor (as defined in 
 

section 6003 of the Anti-Money Laundering Act of 2020 
 (31 U.S.C. 5311 note)); and

    (3) to recognize a liability for any obligations related to 
 activities or services performed with respect to digital assets 
 that the entity does not own if that liability would exceed the 
 expense recognized in the income statement as a result of the 
 corresponding obligation.
            (d) Depository Institution Defined.--In this section, the term 
``depository institution'' has the meaning given that term in 

section 3 
of the Federal Deposit Insurance Act (12 U.S.C. 1813).

SEC. 15. AMENDMENTS TO CLARIFY THAT PAYMENT STABLECOINS ARE NOT 
 SECURITIES.

    (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, respectively, in 

section 2 of the STABLE Act 
of 2025.''.

    (b) Investment Company Act of 1940.--The Investment Company Act of 
1940 is amended--

    (1) in 

section 2

    (a)

    (36) (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, respectively, in 
 

section 2 of the STABLE Act of 2025.''; and

    (2) in 

section 3
            (c) (15 U.S.C. 80a-3
            (c) ), by adding at the 
 end the following:
 ``

    (15) Any permitted payment stablecoin issuer, as such 
 term is defined in 

section 2 of the STABLE Act of 2025.''.
            (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, respectively, in 

section 2 of the STABLE Act of 2025.''.
            (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, respectively, in 

section 2 of the STABLE Act 
of 2025.''.

    (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, respectively, in 

section 2 of the STABLE Act of 2025.''.
 Union Calendar No. 68

119th CONGRESS

 1st Session

 H. R. 2392

 [Report No. 119-94]

_______________________________________________________________________

 A BILL

 To provide for the regulation of payment stablecoins, and for other 
 purposes.

_______________________________________________________________________

 May 6, 2025

 Reported with an amendment, committed to the Committee of the Whole 
 House on the State of the Union, and ordered to be printed