119-s919

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 919 Reported in Senate

    (RS) ]

<DOC>

 Calendar No. 33
119th CONGRESS
 1st Session
 S. 919

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

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 March 10, 2025

Mr. Hagerty (for himself, Mr. Scott of South Carolina, Mrs. Gillibrand, 
 Ms. Lummis, and Ms. Alsobrooks) introduced the following bill; which 
 was read twice and referred to the Committee on Banking, Housing, and 
 Urban Affairs

 March 18, 2025

Reported under authority of the order of the Senate of March 14, 2025, 
 by Mr. Scott of South Carolina, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
 in italic]

_______________________________________________________________________

 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,

<DELETED>

SECTION 1. SHORT TITLE.</DELETED>

<DELETED> This Act may be cited as the ``Guiding and Establishing 
National Innovation for U.S. Stablecoins Act of 2025'' or the ``GENIUS 
Act of 2025''.</DELETED>

<DELETED>

SEC. 2. DEFINITIONS.</DELETED>

<DELETED> In this Act:</DELETED>
 <DELETED>

    (1) Bank secrecy act.--The term ``Bank Secrecy 
 Act'' means--</DELETED>
 <DELETED>
        (A) section 21 of the Federal Deposit 
 Insurance Act (12 U.S.C. 1829b);</DELETED>
 <DELETED>
        (B) chapter 2 of title I of Public Law 91-
 508 (12 U.S.C. 1951 et seq.); and</DELETED>
 <DELETED>
            (C) subchapter II of chapter 53 of title 
 31, United States Code.</DELETED>
 <DELETED>

    (2) Board.--The term ``Board'' means the Board of 
 Governors of the Federal Reserve System.</DELETED>
 <DELETED>

    (3) Comptroller.--The term ``Comptroller'' means 
 the Office of the Comptroller of the Currency.</DELETED>
 <DELETED>

    (4) Comptroller-regulated entity.--The term 
 ``Comptroller-regulated entity'' means--</DELETED>
 <DELETED>
        (A) any Federal qualified nonbank payment 
 stablecoin issuer that is subject to regulation and 
 supervision exclusively by the Comptroller, pursuant to 
 

section 4

    (a)

    (7) ; and</DELETED>
 <DELETED>
        (B) any entity chartered by the 
 Comptroller.</DELETED>
 <DELETED>

    (5) Corporation.--The term ``Corporation'' means 
 the Federal Deposit Insurance Corporation.</DELETED>
 <DELETED>

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

    (7) Distributed ledger.--The term ``distributed 
 ledger'' means technology in which data is shared across a 
 network that creates a public digital ledger of verified 
 transactions or information among network participants and 
 cryptography is used to link the data to maintain the integrity 
 of the public ledger and execute other functions.</DELETED>
 <DELETED>

    (8) Federal qualified nonbank payment stablecoin 
 issuer.--The term ``Federal qualified nonbank payment 
 stablecoin issuer'' means a nonbank entity, other than a State 
 qualified payment stablecoin issuer, approved by the 
 Comptroller, pursuant to 

section 5, to issue payment 
 stablecoins.</DELETED>
 <DELETED>

    (9) Institution-affiliated party.--With respect to 
 a permitted payment stablecoin issuer, the term ``institution-
 affiliated party'' means any director, officer, employee, or 
 controlling stockholder of the permitted payment stablecoin 
 issuer.</DELETED>
 <DELETED>

    (10) Insured depository institution.--The term 
 ``insured depository institution'' means--</DELETED>
 <DELETED>
        (A) an insured depository institution, as 
 defined in 

section 3 of the Federal Deposit Insurance 
 Act (12 U.S.C. 1813); and</DELETED>
 <DELETED>
        (B) an insured credit union, as defined in 
 

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

    (11) Monetary value.--The term ``monetary value'' 
 means a national currency or deposit (as defined in 

section 3 
 of the Federal Deposit Insurance Act) denominated in a national 
 currency.</DELETED>
 <DELETED>

    (12) Money.--The term ``money'' means any 
 financial instrument that is--</DELETED>
 <DELETED>
        (A) legal tender;</DELETED>
 <DELETED>
        (B) required to be received by a taxing 
 authority in satisfaction of tax obligations; 
 or</DELETED>
 <DELETED>
            (C) widely accepted in an economy for the 
 payment of goods or services.</DELETED>
 <DELETED>

    (13) National currency.--The term ``national 
 currency'' means each of the following:</DELETED>
 <DELETED>
        (A) A Federal Reserve note (as the term is 
 used in the first undesignated paragraph of 

section 16 
 of the Federal Reserve Act (12 U.S.C. 411)).</DELETED>
 <DELETED>
        (B) Money standing to the credit of an 
 account with a Federal Reserve Bank.</DELETED>
 <DELETED>
            (C) Money issued by a foreign central 
 bank.</DELETED>
 <DELETED>
            (D) Money issued by an intergovernmental 
 organization pursuant to an agreement by 1 or more 
 governments.</DELETED>
 <DELETED>

    (14) Nonbank entity.--The term ``nonbank entity'' 
 means a person that is not a depository institution or 
 subsidiary of a depository institution.</DELETED>
 <DELETED>

    (15) Payment stablecoin.--The term ``payment 
 stablecoin''--</DELETED>
 <DELETED>
        (A) means a digital asset--</DELETED>
 <DELETED>
            (i) that is or is designed to be 
 used as a means of payment or settlement; 
 and</DELETED>
 <DELETED>
            (ii) the issuer of which--
 </DELETED>
 <DELETED>
            (I) is obligated to 
 convert, redeem, or repurchase for a 
 fixed amount of monetary value, not 
 including a digital asset denominated 
 in a fixed amount of monetary 
 value;</DELETED>
 <DELETED>
            (II) represents that such 
 issuer will maintain or creates the 
 reasonable expectation that it will 
 maintain a stable value relative to the 
 value of a fixed amount of monetary 
 value; or</DELETED>
 <DELETED>
            (III) has complied with 
 the authorization requirements of this 
 Act; and</DELETED>
 <DELETED>
        (B) that--</DELETED>
 <DELETED>
            (i) is not a national 
 currency;</DELETED>
 <DELETED>
            (ii) is not a deposit (as defined 
 in 

section 3 of the Federal Deposit Insurance 
 Act), including a deposit recorded using 
 distributed ledger technology;</DELETED>
 <DELETED>
            (iii) does not offer a payment of 
 yield or interest; and</DELETED>
 <DELETED>
            (iv) is not a security, as defined 
 in 

section 2 of the Securities Act of 1933 (15 
 U.S.C. 77b), 

section 3 of the Securities 
 Exchange Act of 1934 (15 U.S.C. 78c), or 
 

section 2 of the Investment Company Act of 1940 
 (15 U.S.C. 80a-2), other than a bond, note, 
 evidence of indebtedness, or investment 
 contract satisfying the conditions described in 
 subparagraph
        (A) .</DELETED>
 <DELETED>

    (16) Permitted payment stablecoin issuer.--The 
 term ``permitted payment stablecoin issuer'' means a person 
 incorporated in the United States that is--</DELETED>
 <DELETED>
        (A) a subsidiary of an insured depository 
 institution that has been approved to issue payment 
 stablecoins under 

section 5;</DELETED>
 <DELETED>
        (B) a Federal qualified nonbank payment 
 stablecoin issuer that has been approved to issue 
 payment stablecoins under 

section 5; or</DELETED>
 <DELETED>
            (C) a State qualified payment stablecoin 
 issuer.</DELETED>
 <DELETED>

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

    (18) Primary federal payment stablecoin 
 regulator.--The term ``primary Federal payment stablecoin 
 regulator'' means--</DELETED>
 <DELETED>
        (A) with respect to a subsidiary of an 
 insured depository institution (other than an insured 
 credit union), the appropriate Federal banking agency 
 (as defined under 

section 3 of the Federal Deposit 
 Insurance Act (12 U.S.C. 1813)) of such insured 
 depository institution;</DELETED>
 <DELETED>
        (B) with respect to an insured credit 
 union or a subsidiary of an insured credit union, the 
 National Credit Union Administration;</DELETED>
 <DELETED>
            (C) with respect to a State chartered 
 depository institution not specified under subparagraph
        (A) , the Corporation, the Comptroller, or the Board; 
 and</DELETED>
 <DELETED>
            (D) with respect to a Federal qualified 
 nonbank payment stablecoin issuer or any entity 
 chartered by the Comptroller, the 
 Comptroller.</DELETED>
 <DELETED>

    (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).</DELETED>
 <DELETED>

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

    (21) State qualified payment stablecoin issuer.--
 The term ``State qualified payment stablecoin issuer'' means an 
 entity that is legally established under the laws of a State 
 and approved to issue payment stablecoins by a State payment 
 stablecoin regulator.</DELETED>
 <DELETED>

    (22) State payment stablecoin regulator.--The term 
 ``State payment stablecoin regulator'' means a State agency 
 that has primary regulatory and supervisory authority in such 
 State over entities that issue payment stablecoins.</DELETED>
 <DELETED>

    (23) State chartered depository institution.--The 
 term ``State chartered depository institution'' has the meaning 
 given the term ``State depository institution'' in 

section 3
            (c) of the Federal Deposit Insurance Act (12 U.S.C. 
 1813
            (c) ).</DELETED>
 <DELETED>

    (24) Subsidiary of an insured credit union.--With 
 respect to an insured credit union, the term ``subsidiary of an 
 insured credit union'' means--</DELETED>
 <DELETED>
        (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) ); and</DELETED>
 <DELETED>
        (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.</DELETED>

<DELETED>

SEC. 3. ISSUANCE AND TREATMENT OF PAYMENT 
 STABLECOINS.</DELETED>

<DELETED>

    (a) Issue.--It shall be unlawful for any person other than 
a permitted payment stablecoin issuer to issue a payment stablecoin in 
the United States.</DELETED>
<DELETED>

    (b) Treatment.--A payment stablecoin that is not issued by 
a permitted payment stablecoin issuer shall not be acceptable as a 
settlement asset to facilitate wholesale payments between banking 
organizations or by a payment infrastructure to facilitate exchange and 
settlement among banking organizations.</DELETED>
<DELETED>
            (c) Penalty for Violation.--</DELETED>
 <DELETED>

    (1) In general.--Whoever knowingly participates in 
 a violation of subsection

    (a) shall be fined not more than 
 $1,000,000 for each such violation, imprisoned for not more 
 than 5 years, or both.</DELETED>
 <DELETED>

    (2) Referral to attorney general.--If a primary 
 Federal payment stablecoin regulator has reason to believe that 
 any person has knowingly violated subsection

    (a) , the primary 
 Federal payment stablecoin regulator shall refer the matter to 
 the Attorney General.</DELETED>

<DELETED>

SEC. 4. REQUIREMENTS FOR ISSUING PAYMENT 
 STABLECOINS.</DELETED>

<DELETED>

    (a) Standards for the Issuance of Payment Stablecoins.--
</DELETED>
 <DELETED>

    (1) In general.--Permitted payment stablecoin 
 issuers shall--</DELETED>
 <DELETED>
        (A) maintain reserves backing the 
 outstanding payment stablecoins of the permitted 
 payment stablecoin issuer on an at least 1 to 1 basis, 
 with reserves comprising--</DELETED>
 <DELETED>
            (i) United States coins and 
 currency (including Federal reserve notes) or 
 money standing to the credit of an account with 
 a Federal Reserve Bank;</DELETED>
 <DELETED>
            (ii) funds held as demand deposits 
 (or other deposits that may be withdrawn upon 
 request at any time) or insured shares at an 
 insured depository institution (including any 
 foreign branches and agencies of an insured 
 depository institution), subject to limitations 
 established by the Corporation and the National 
 Credit Union Administration, as applicable, to 
 address safety and soundness risks of such 
 insured depository institution;</DELETED>
 <DELETED>
            (iii) Treasury bills, notes, or 
 bonds--</DELETED>
 <DELETED>
            (I) with a remaining 
 maturity of 93 days or less; 
 or</DELETED>
 <DELETED>
            (II) issued with a 
 maturity of 93 days or less;</DELETED>
 <DELETED>
            (iv) 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;</DELETED>
 <DELETED>
            (v) reverse repurchase agreements 
 with the permitted payment stablecoin issuer 
 acting as a purchaser of securities and with an 
 overnight maturity that are collateralized by 
 Treasury notes, bills, or bonds on an overnight 
 basis, subject to overcollateralization in line 
 with standard market terms, that are--
 </DELETED>
 <DELETED>
            (I) tri-party;</DELETED>
 <DELETED>
            (II) centrally cleared 
 through a clearing house registered 
 with the Securities and Exchange 
 Commission; or</DELETED>
 <DELETED>
            (III) bilateral with a 
 counterparty that the issuer has 
 determined to be adequately 
 creditworthy even in the event of 
 severe market stress;</DELETED>
 <DELETED>
            (vi) securities issued by an 
 investment company registered under 

section 8

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

    (a) ) that operates as a money 
 market fund in compliance with rule 2a-7 issued 
 under that Act (or any successor rule) and that 
 are invested solely in underlying assets 
 described in clauses
            (i) through
            (iv) of 
 subparagraph
        (A) ;</DELETED>
 <DELETED>
            (vii) any other similarly liquid 
 asset approved by the primary Federal payment 
 stablecoin regulator, in consultation with the 
 State payment stablecoin regulator, if 
 applicable, of the permitted payment stablecoin 
 issuer; or</DELETED>
 <DELETED>
            (viii) any reserve described in 
 clauses
            (i) through
            (vii) in tokenized form, 
 provided that such reserves comply with all 
 applicable laws and regulations;</DELETED>
 <DELETED>
        (B) publicly disclose the issuer's 
 redemption policy;</DELETED>
 <DELETED>
            (C) establish procedures for timely 
 redemption of outstanding payment stablecoins; 
 and</DELETED>
 <DELETED>
            (D) publish the monthly composition of the 
 issuer's reserves on the website of the issuer, 
 containing--</DELETED>
 <DELETED>
            (i) the total number of 
 outstanding payment stablecoins issued by the 
 issuer; and</DELETED>
 <DELETED>
            (ii) the amount and composition of 
 the reserves described under subparagraph
        (A) .</DELETED>
 <DELETED>

    (2) Prohibition on rehypothecation.--Reserves 
 required under paragraph

    (1)
        (A) may not be pledged, 
 rehypothecated, or reused by the permitted payment stablecoin 
 issuer, either directly or indirectly, except for the purpose 
 of--</DELETED>
 <DELETED>
        (A) satisfying margin obligations in 
 connection with investments in permitted reserves under 
 clauses
            (iv) and
            (v) of paragraph

    (1)
        (A) ;</DELETED>
 <DELETED>
        (B) satisfying obligations associated with 
 the use or receipt of provision of standard custodial 
 services; or</DELETED>
 <DELETED>
            (C) creating liquidity to meet reasonable 
 expectations of requests to redeem payment stablecoins, 
 such that reserves in the form of Treasury bills may be 
 sold as purchased securities for repurchase agreements 
 with a maturity of 93 days or less, provided that 
 either--</DELETED>
 <DELETED>
            (i) the repurchase agreements are 
 cleared by a clearing agency registered with 
 the Securities and Exchange Commission; 
 or</DELETED>
 <DELETED>
            (ii) the permitted payment 
 stablecoin issuer receives the prior approval 
 of its primary Federal payment stablecoin 
 regulator or State payment stablecoin 
 regulator, as applicable.</DELETED>
 <DELETED>

    (3) Monthly certification; examination of reports 
 by registered public accounting firm.--</DELETED>
 <DELETED>
        (A) In general.--A permitted payment 
 stablecoin issuer shall, each month, have the 
 information disclosed in the previous month-end report 
 required under paragraph

    (1)
            (D) examined by a 
 registered public accounting firm.</DELETED>
 <DELETED>
        (B) Certification.--Each month, the Chief 
 Executive Officer and Chief Financial Officer of a 
 permitted payment stablecoin issuer shall submit a 
 certification as to the accuracy of the monthly report 
 to, as applicable--</DELETED>
 <DELETED>
            (i) the primary Federal payment 
 stablecoin regulator of the permitted payment 
 stablecoin issuer; or</DELETED>
 <DELETED>
            (ii) the State payment stablecoin 
 regulator of the permitted payment stablecoin 
 issuer.</DELETED>
 <DELETED>
            (C) Criminal penalty.--Any person who 
 submits a certification required under subparagraph
        (B) knowing that such certification is false shall be 
 subject to the criminal penalties set forth under 
 

section 1350
            (c) of title 18, United States 
 Code.</DELETED>
 <DELETED>

    (4) Capital, liquidity, and risk management 
 requirements.--</DELETED>
 <DELETED>
        (A) In general.--The primary Federal 
 payment stablecoin regulators shall, jointly, or in the 
 case of a State qualified payment stablecoin issuer, 
 the State payment stablecoin regulator shall, 
 consistent with 

section 18, issue--</DELETED>
 <DELETED>
            (i) capital requirements 
 applicable to permitted payment stablecoin 
 issuers that--</DELETED>
 <DELETED>
            (I) are tailored to the 
 business model and risk profile of 
 permitted payment stablecoin 
 issuers;</DELETED>
 <DELETED>
            (II) do not exceed 
 requirements which are sufficient to 
 ensure the ongoing operations of 
 permitted payment stablecoin issuers; 
 and</DELETED>
 <DELETED>
            (III) 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;</DELETED>
 <DELETED>
            (ii) regulations implementing the 
 liquidity standard under clause
            (i) ;</DELETED>
 <DELETED>
            (iii) reserve asset 
 diversification and interest rate risk 
 management standards applicable to permitted 
 payment stablecoin issuers that--</DELETED>
 <DELETED>
            (I) are tailored to the 
 business model and risk profile of 
 permitted payment stablecoin issuers; 
 and</DELETED>
 <DELETED>
            (II) do not exceed 
 standards which are sufficient to 
 ensure the ongoing operations of 
 permitted payment stablecoin issuers; 
 and</DELETED>
 <DELETED>
            (iv) appropriate operational, 
 compliance, and information technology risk 
 management standards, including Bank Secrecy 
 Act and sanctions compliance, that--</DELETED>
 <DELETED>
            (I) are tailored to the 
 business model and risk profile of 
 permitted payment stablecoin issuers; 
 and</DELETED>
 <DELETED>
            (II) are consistent with 
 applicable law.</DELETED>
 <DELETED>
        (B) Rule of construction.--Nothing in this 
 paragraph shall be construed to limit--</DELETED>
 <DELETED>
            (i) the authority of the primary 
 Federal regulators, in prescribing standards 
 under this paragraph, to tailor or 
 differentiate among issuers on an individual 
 basis or by category, taking into consideration 
 the capital structure, business model risk 
 profile, complexity, financial activities 
 (including financial activities of 
 subsidiaries), size, and any other risk related 
 factors of permitted payment stablecoin issuers 
 that the primary Federal regulator determines 
 appropriate, provided that such tailoring or 
 differentiation occurs without respect to 
 whether a permitted payment stablecoin issuer 
 is regulated by a State payment stablecoin 
 regulator; or</DELETED>
 <DELETED>
            (ii) the supervisory, regulatory, 
 or enforcement authority of a Federal banking 
 agency to further the safe and sound operation 
 of an institution for which the Federal banking 
 agency is the appropriate Federal banking 
 agency (as defined under 

section 3 of the 
 Federal Deposit Insurance Act (12 U.S.C. 
 1813)).</DELETED>
 <DELETED>
            (C) Applicability of existing capital 
 standards.--</DELETED>
 <DELETED>
            (i) === Definitions. ===
-In this 
 subparagraph--</DELETED>
 <DELETED>
            (I) ``appropriate Federal 
 banking agency'' has the meaning given 
 that term in 

section 3

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

    (q) ; and</DELETED>
 <DELETED>
            (II) ``depository 
 institution holding company'' has the 
 meaning given that term under 

section 171

    (a)

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

    (a)

    (3) ).</DELETED>
 <DELETED>
            (ii) Applicability of financial 
 stability act.--With respect to the 
 promulgation of rules under subparagraph
        (A) and clauses
            (iii) and
            (iv) of this 
 subparagraph, 

section 171 of the Financial 
 Stability Act of 2010 (12 U.S.C. 5371) shall 
 not apply.</DELETED>
 <DELETED>
            (iii) Rules relating to leverage 
 capital requirements or risk-based capital 
 requirements.--Any rule issued by an 
 appropriate Federal banking agency that 
 imposes, on a consolidated basis, a leverage 
 capital requirement or risk-based capital 
 requirement with respect to an insured 
 depository institution or depository 
 institution holding company shall provide that, 
 for purposes of such leverage capital 
 requirement or risk-based capital requirement, 
 any insured depository institution or 
 depository institution holding company that 
 includes, on a consolidated basis, a permitted 
 payment stablecoin issuer shall not be required 
 to hold, with respect to such permitted payment 
 stablecoin issuer and its assets and 
 operations, any amount of regulatory capital in 
 excess of the capital that such permitted 
 payment stablecoin issuer must maintain under 
 the capital requirements promulgated pursuant 
 to paragraph

    (1)
        (A)
            (i) .</DELETED>
 <DELETED>
            (iv) Modifications.--Not later 
 than the earlier of the rulemaking deadline 
 under 

section 18 or the date the Federal 
 payment stablecoin regulators issue regulations 
 to carry out this section, each appropriate 
 Federal banking agency shall amend or otherwise 
 modify any regulation of the Federal banking 
 agency described in clause
            (iii) so that such 
 regulation, as amended or otherwise modified, 
 complies with clause
            (iii) of this 
 subparagraph.</DELETED>
 <DELETED>

    (5) Treatment under the bank secrecy act and 
 sanctions laws.--</DELETED>
 <DELETED>
        (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--
 </DELETED>
 <DELETED>
            (i) maintenance of an effective 
 anti-money laundering and economic sanctions 
 compliance program, which shall include 
 appropriate risk assessments, verification of 
 sanctions lists and designation of an officer 
 to supervise the programs;</DELETED>
 <DELETED>
            (ii) retention of appropriate 
 records of payment stablecoin 
 transactions;</DELETED>
 <DELETED>
            (iii) monitoring and reporting 
 suspicious activity;</DELETED>
 <DELETED>
            (iv) policies and procedures to 
 block, freeze, and reject specific or 
 impermissible transactions that violate Federal 
 or State laws, rules, or regulations; 
 and</DELETED>
 <DELETED>
            (v) 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.</DELETED>
 <DELETED>
        (B) Rulemaking.--The Financial Crimes 
 Enforcement Network shall adopt rules, tailored to the 
 size and complexity of the permitted payment stablecoin 
 issuer, to implement subparagraph
        (A) .</DELETED>
 <DELETED>

    (6) Coordination with permitted payment stablecoin 
 issuers with respect to blocking of property and technological 
 capabilities to comply with lawful orders.--</DELETED>
 <DELETED>
        (A) In general.--The Secretary of the 
 Treasury--</DELETED>
 <DELETED>
            (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 digital asset of the 
 foreign person upon issue of the digital asset; 
 and</DELETED>
 <DELETED>
            (ii) is not required to notify any 
 permitted payment stablecoin issuer of any 
 intended action described in clause
            (i) prior 
 to taking such action.</DELETED>
 <DELETED>
        (B) Compliance with lawful orders.--
 </DELETED>
 <DELETED>
            (i) In general.--</DELETED>
 <DELETED>
            (I) Permitted payment 
 stablecoin issuers.--A permitted 
 payment stablecoin issuer may issue 
 payment stablecoins only if the issuer 
 has the technological capability to 
 comply and will comply with the terms 
 of any lawful order.</DELETED>
 <DELETED>
            (II) Foreign payment 
 stablecoins.--A foreign payment 
 stablecoin that is not licensed under 
 this Act may not be publicly offered, 
 sold, or otherwise made available for 
 trading in the United States unless the 
 payment stablecoin issuer has the 
 technological capability to comply and 
 will comply with the terms of any 
 lawful order.</DELETED>
 <DELETED>
            (ii) Lawful order defined.--In 
 this paragraph, the term ``lawful order'' means 
 any final and valid writ, process, order, rule, 
 decree, command, or other requirement issued or 
 promulgated under Federal law, issued by a 
 court of competent jurisdiction or by an 
 authorized Federal agency pursuant to its 
 statutory authority, that--</DELETED>
 <DELETED>
            (I) requires the permitted 
 payment stablecoin issuer to seize, 
 freeze, burn, or prevent the transfer 
 of payment stablecoins issued by the 
 permitted payment stablecoin 
 issuer;</DELETED>
 <DELETED>
            (II) specifies the digital 
 assets or accounts subject to blocking 
 with reasonable particularity; 
 and</DELETED>
 <DELETED>
            (III) is subject to 
 judicial or administrative review or 
 appeal as provided by law.</DELETED>
 <DELETED>
            (C) Report required.--Not later than 1 
 year after the date of enactment of this Act, the 
 Secretary of the Treasury shall submit to the Committee 
 on Banking, Housing, and Urban Affairs of the Senate 
 and the Committee on Financial Services of the House of 
 Representatives a report on the coordination with 
 permitted payment stablecoin issuers required under 
 subparagraph
        (A) .</DELETED>
 <DELETED>

    (7) Limitation on payment stablecoin activities.--
 </DELETED>
 <DELETED>
        (A) In general.--A permitted payment 
 stablecoin issuer may only--</DELETED>
 <DELETED>
            (i) issue payment 
 stablecoins;</DELETED>
 <DELETED>
            (ii) redeem payment 
 stablecoins;</DELETED>
 <DELETED>
            (iii) manage related reserves, 
 including purchasing, selling, and holding 
 reserve assets or providing custodial services 
 for reserve assets, consistent with State and 
 Federal law;</DELETED>
 <DELETED>
            (iv) provide custodial or 
 safekeeping services for payment stablecoins, 
 required reserves, or private keys of payment 
 stablecoins, consistent with this Act; 
 and</DELETED>
 <DELETED>
            (v) undertake other activities 
 that directly support any of the activities 
 described in clauses
            (i) through
            (iv) .</DELETED>
 <DELETED>
        (B) Rule of construction.--Nothing in 
 subparagraph
        (A) shall prevent a permitted payment 
 stablecoin issuer from engaging in non-payment 
 stablecoin activities that are allowed by the primary 
 Federal payment stablecoin regulator or the State 
 payment stablecoin regulator, as applicable.</DELETED>
 <DELETED>

    (8) Prohibition on tying.--</DELETED>
 <DELETED>
        (A) In general.--A permitted payment 
 stablecoin issuer may not provide services to a 
 customer on the condition that the customer obtain an 
 additional paid product or service from the permitted 
 payment stablecoin issuer, or any of its subsidiaries, 
 or agree to not obtain an additional product or service 
 from a competitor.</DELETED>
 <DELETED>
        (B) Regulations.--The Board may issue such 
 regulations as are necessary to carry out this 
 subparagraph, and, in consultation with the Comptroller 
 and the Corporation, may by regulation or order, permit 
 such exceptions to clause
            (i) as the Board considers 
 will not be contrary to the purpose of this 
 Act.</DELETED>
 <DELETED>

    (9) Regulation by the comptroller.--</DELETED>
 <DELETED>
        (A) In general.--A Federal qualified 
 nonbank payment stablecoin issuer shall be regulated 
 and supervised exclusively by the Comptroller, which 
 shall have authority, in coordination with other 
 relevant primary Federal payment stablecoin regulators 
 and State payment stablecoin regulators, to issue such 
 regulations and orders as necessary to ensure financial 
 stability and implement this subsection.</DELETED>
 <DELETED>
        (B) Conforming amendment.--

Section 324

    (b) of the Revised Statutes (12 U.S.C. 1

    (b) ) is amended by 
 adding at the end the following:</DELETED>
 <DELETED> ``

    (3) Regulation of federal qualified nonbank 
 payment stablecoin issuers.--The Comptroller of the Currency 
 shall, in coordination with other relevant regulators and 
 consistent with 

section 18 of the Guiding and Establishing 
 National Innovation for U.S. Stablecoins Act of 2025, issue 
 such regulations and orders as necessary to ensure financial 
 stability and implement 

section 4

    (a) of that Act.''.</DELETED>
 <DELETED>

    (10) Audits and reports.--</DELETED>
 <DELETED>
        (A) Annual financial statement.--
 </DELETED>
 <DELETED>
            (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 sections 13

    (a) or 15
            (d) of the Securities and Exchange Act of 
 1934 (15 U.S.C. 78m, 78o
            (d) ), shall prepare, in 
 accordance with generally accepted accounting 
 principles, an annual financial statement, 
 which shall include the disclosure of any 
 related party transactions, as defined by such 
 generally accepted accounting 
 principles.</DELETED>
 <DELETED>
            (ii) Auditor.--A registered public 
 accounting firm shall perform an audit of the 
 annual financial statements described in clause
            (i) .</DELETED>
 <DELETED>
            (iii) Standards.--An audit 
 described in clause
            (ii) shall be conducted in 
 accordance with all applicable auditing 
 standards established by the Public Company 
 Accounting Oversight Board, including those 
 relating to auditor independence, internal 
 controls, and related party 
 transactions.</DELETED>
 <DELETED>
            (iv) Rule of construction.--
 Nothing in this subparagraph shall be construed 
 to limit, alter, or expand the jurisdiction of 
 the Public Company Accounting Oversight Board 
 over permitted payment stablecoin issuers or 
 registered public accounting firms.</DELETED>
 <DELETED>
        (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:</DELETED>
 <DELETED>
            (i) make such audited financial 
 statements publicly available on the website of 
 the permitted payment stablecoin issuer; 
 and</DELETED>
 <DELETED>
            (ii) submit such audited financial 
 statements annually to their primary Federal 
 payment stablecoin regulator.</DELETED>
 <DELETED>
            (C) Consultation.--The primary Federal 
 payment stablecoin regulators may consult with the 
 Public Company Accounting Oversight Board to determine 
 best practices for determining audit oversight and to 
 detect fraud, material misstatements, and other 
 financial misrepresentations that could mislead 
 permitted payment stablecoin holders.</DELETED>
<DELETED>

    (b) State-level Regulatory Regimes.--</DELETED>
 <DELETED>

    (1) Option for state-level regulatory regime.--
 Notwithstanding the Federal regulatory framework established 
 under subsection

    (a) , a State qualified payment stablecoin 
 issuer with a consolidated total outstanding issuance of not 
 more than $10,000,000,000 may opt for regulation under a State-
 level regulatory regime, provided that the State-level 
 regulatory regime is substantially similar to the Federal 
 regulatory framework under that subsection.</DELETED>
 <DELETED>

    (2) Principles.--The Secretary of the Treasury 
 shall, through notice and comment rulemaking, establish broad 
 based principles for determining whether a State-level 
 regulatory regime is substantially similar to the Federal 
 regulatory framework under subsection

    (a) .</DELETED>
 <DELETED>

    (3) 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) .</DELETED>
 <DELETED>

    (4) Certification.--</DELETED>
 <DELETED>
        (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 Secretary of the Treasury 
 an initial certification that the State-level 
 regulatory regime meets the criteria for substantial 
 similarity established pursuant to paragraph

    (2) .</DELETED>
 <DELETED>
        (B) Form of certification.--The initial 
 certification required under subparagraph
        (A) shall 
 contain, in a form prescribed by the Secretary of the 
 Treasury, an attestation that the State-level 
 regulatory regime meets the criteria for substantial 
 similarity established pursuant to paragraph

    (2) .</DELETED>
 <DELETED>
            (C) Annual recertification.--Not later 
 than a date to be determined by the Secretary each 
 year, a State payment stablecoin regulator shall submit 
 to the Secretary of the Treasury an additional 
 certification that confirms the accuracy of initial 
 certification submitted under subparagraph
        (A) .</DELETED>
 <DELETED>

    (5) Not substantially similar.--</DELETED>
 <DELETED>
        (A) In general.--If a State payment 
 stablecoin regulator determines that the criteria 
 established under paragraph

    (2) are not meet and the 
 State payment stablecoin regulator does not submit a 
 certification under paragraph

    (4) , then a permitted 
 payment stablecoin issuer operating under this 
 subsection shall be subject to the Federal regulatory 
 framework as described in subsection
            (c) , 
 notwithstanding the total issuance threshold 
 therein.</DELETED>
 <DELETED>
        (B) Treasury review.--Not later than 30 
 days after the date of receipt of a certification under 
 paragraph

    (4) , the Secretary reject the certification 
 if the Secretary determines that the State-level 
 regulatory regime is not substantially similar to the 
 Federal regulatory framework under subsection

    (a) , and 
 the permitted payment stablecoin issuer shall be 
 subject to the Federal regulatory framework as 
 described in subsection
            (c) , notwithstanding the total 
 issuance threshold therein.</DELETED>
 <DELETED>
            (C) Appellate review.--A State payment 
 stablecoin regulator may challenge the determination of 
 the Secretary of the Treasury under this paragraph in 
 the United States Court of Appeals for the District of 
 Columbia Circuit.</DELETED>
 <DELETED>

    (6) List.--The Secretary of the Treasury shall 
 publish and maintain in the Federal Register and on the website 
 of the Department of the Treasury a list of States that have 
 submitted initial certifications and recertifications under 
 paragraph

    (4) .</DELETED>
<DELETED>
            (c) Transition to Federal Oversight.--</DELETED>
 <DELETED>

    (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--
 </DELETED>
 <DELETED>
        (A) not later than 360 days after the 
 payment stablecoin reaches such threshold, transition 
 to the Federal regulatory framework of the primary 
 Federal payment stablecoin regulator of the State 
 chartered depository institution, which shall be 
 administered by the State payment stablecoin regulator 
 of the State chartered depository institution and the 
 primary Federal payment stablecoin regulator acting 
 jointly; or</DELETED>
 <DELETED>
        (B) beginning on the date the payment 
 stablecoin reaches such threshold, cease issuing new 
 payment stablecoins until the payment stablecoin is 
 under the $10,000,000,000 consolidated total 
 outstanding issuance threshold.</DELETED>
 <DELETED>

    (2) Other institutions.--A State qualified payment 
 stablecoin issuer not described in paragraph

    (1) with a payment 
 stablecoin with a consolidated total outstanding issuance of 
 more than $10,000,000,000 shall--</DELETED>
 <DELETED>
        (A) not later than 360 days after the 
 payment stablecoin reaches such threshold, transition 
 to the Federal regulatory framework under subsection

    (a) administered by the State payment stablecoin 
 regulator of the State qualified payment stablecoin 
 issuer; or</DELETED>
 <DELETED>
        (B) beginning on the date the payment 
 stablecoin reaches such threshold, cease issuing new 
 payment stablecoins until the payment stablecoin is 
 under the $10,000,000,000 consolidated total 
 outstanding issuance threshold.</DELETED>
 <DELETED>

    (3) Waiver.--</DELETED>
 <DELETED>
        (A) In general.--Notwithstanding 
 paragraphs

    (1) and

    (2) , the applicable primary Federal 
 payment stablecoin regulator may permit a State 
 qualified payment stablecoin issuer with a payment 
 stablecoin with a consolidated total outstanding 
 issuance of more than $10,000,000,000 to remain solely 
 supervised by a State payment stablecoin 
 regulator.</DELETED>
 <DELETED>
        (B) 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:</DELETED>
 <DELETED>
            (i) The capital maintained by the 
 State qualified payment stablecoin 
 issuer.</DELETED>
 <DELETED>
            (ii) The past operations and 
 examination history of the State qualified 
 payment stablecoin issuer.</DELETED>
 <DELETED>
            (iii) The experience of the State 
 payment stablecoin regulator in supervising 
 payment stablecoin and digital asset 
 activities.</DELETED>
 <DELETED>
            (iv) The laws and rules applicable 
 to, and the supervisory framework of, the State 
 qualified payment stablecoin issuer with 
 respect to payment stablecoins and digital 
 assets.</DELETED>
 <DELETED>
            (C) Rule of construction.--A State 
 qualified payment stablecoin issuer subject to Federal 
 oversight under paragraph

    (1) or

    (2) of this subsection 
 that does not receive a waiver under this paragraph 
 shall continue to be supervised by the State payment 
 stablecoin regulator of the State qualified payment 
 stablecoin issuer along jointly with the primary 
 Federal payment stablecoin regulator. Nothing in this 
 subsection shall require the State qualified payment 
 stablecoin issuer to convert to a Federal 
 charter.</DELETED>
<DELETED>
            (d) Misrepresentation of Insured Status; Marketing.--
</DELETED>
 <DELETED>

    (1) In general.--Payment stablecoins shall not be 
 backed by the full faith and credit of the United States, 
 guaranteed by the United States Government, subject to deposit 
 insurance by the Federal Deposit Insurance Corporation, or 
 subject to share insurance by the National Credit Union 
 Administration.</DELETED>
 <DELETED>

    (2) Misrepresentation of insured status.--
 </DELETED>
 <DELETED>
        (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.</DELETED>
 <DELETED>
        (B) Penalty.--A violation of subparagraph
        (A) shall be considered a violation of 

section 18

    (a)

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

    (a)

    (4) ) or 

section 709 of title 18, United States 
 Code, as applicable.</DELETED>
 <DELETED>

    (3) Marketing.--It shall be unlawful to market a 
 digital asset in the United States as a payment stablecoin 
 unless the digital asset is issued pursuant to this 
 Act.</DELETED>
<DELETED>

    (e) Officers or Directors Convicted of Certain Felonies.--
</DELETED>
 <DELETED>

    (1) In general.--No individual who has been 
 convicted of a felony offense involving insider trading, 
 embezzlement, cybercrime, money laundering, financing of 
 terrorism, or financial fraud may serve as--</DELETED>
 <DELETED>
        (A) an officer of a payment stablecoin 
 issuer; or</DELETED>
 <DELETED>
        (B) a director of a payment stablecoin 
 issuer.</DELETED>
 <DELETED>

    (2) Penalty.--</DELETED>
 <DELETED>
        (A) In general.--Whoever knowingly 
 participates in a violation of paragraph

    (1) shall be 
 fined not more than $1,000,000 for each such violation, 
 imprisoned for not more than 5 years; or 
 both.</DELETED>
 <DELETED>
        (B) Referral to attorney general.--If a 
 Federal payment stablecoin regulator has reason to 
 believe that any person has knowingly violated 
 paragraph

    (1) , the Federal payment stablecoin regulator 
 shall refer the matter to the Attorney 
 General.</DELETED>
<DELETED>

    (f) Rulemaking.--</DELETED>
 <DELETED>

    (1) In general.--Consistent with 

section 18, the 
 primary Federal payment stablecoin regulators and State payment 
 stablecoin regulators shall issue such regulations as may be 
 necessary to establish a payment stablecoin regulatory 
 framework necessary to administer and carry out the 
 requirements of this section, including to establish 
 conditions, and to prevent evasions thereof.</DELETED>
 <DELETED>

    (2) Joint issuance of regulation.--All regulations 
 issued to carry out this section shall be issued jointly by the 
 primary Federal payment stablecoin regulators, if not issued by 
 a State payment stablecoin regulator.</DELETED>

<DELETED>

SEC. 5. APPROVAL OF SUBSIDIARIES OF INSURED DEPOSITORY 
 INSTITUTIONS AND FEDERAL QUALIFIED NONBANK PAYMENT 
 STABLECOIN ISSUERS.</DELETED>

<DELETED>

    (a) Application.--</DELETED>
 <DELETED>

    (1) In general.--Each primary Federal payment 
 stablecoin regulator shall receive, review, and consider for 
 approval applications from any insured depository institution 
 that seeks to issue payment stablecoins through a subsidiary 
 and any nonbank entity that seeks to issue payment stablecoins 
 as a Federal qualified nonbank payment stablecoin issuer. Each 
 primary Federal payment stablecoin regulator shall establish a 
 process and framework for the licensing, regulation, 
 examination, and supervision of such entities that prioritizes 
 the safety and soundness of such entities.</DELETED>
 <DELETED>

    (2) Authority to issue regulations and process 
 applications.--The primary Federal payment stablecoin 
 regulators shall, before the date described in 

section 18--
 </DELETED>
 <DELETED>
        (A) issue regulations consistent with that 
 section to carry out this section; and</DELETED>
 <DELETED>
        (B) pursuant to the regulations described 
 in subparagraph
        (A) , accept and process applications 
 under this Act.</DELETED>
 <DELETED>

    (3) Mandatory approval process.--The primary 
 Federal payment stablecoin regulator shall, upon receipt of a 
 substantially complete application, evaluate and make a 
 determination on each application based on the criteria 
 established under this Act.</DELETED>
<DELETED>

    (b) Evaluation of Applications.--A substantially complete 
application received under subsection

    (a) shall be evaluated by the 
primary Federal payment stablecoin regulator using the factors 
described in subsection
            (c) .</DELETED>
<DELETED>
            (c) Factors to Be Considered.--The factors described in 
this subsection are the following:</DELETED>
 <DELETED>

    (1) The ability of the applicant (or, in the case 
 of an applicant that is an insured depository institution, the 
 subsidiary of the applicant), based on financial condition and 
 resources, to meet the requirements set forth under 

section 4.</DELETED>
 <DELETED>

    (2) Whether an individual who has been convicted 
 of a felony offense involving insider trading, embezzlement, 
 cybercrime, money laundering, financing of terrorism, or 
 financial fraud is serving as an officer or director of the 
 applicant.</DELETED>
 <DELETED>

    (3) Any other factors established by the primary 
 Federal payment stablecoin regulator that are necessary to 
 ensure the safety and soundness of the permitted payment 
 stablecoin issuer.</DELETED>
<DELETED>
            (d) Timing for Decision; Grounds for Denial.--</DELETED>
 <DELETED>

    (1) Timing for decisions on applications.--
 </DELETED>
 <DELETED>
        (A) In general.--Not later than 120 days 
 after receiving a substantially complete application 
 under subsection

    (a) , a primary Federal payment 
 stablecoin regulator shall render a decision on the 
 application.</DELETED>
 <DELETED>
        (B) Substantially complete.--</DELETED>
 <DELETED>
            (i) In general.--For purposes of 
 subparagraph
        (A) , an application shall be 
 considered substantially complete if the 
 application contains sufficient information for 
 the primary Federal payment stablecoin 
 regulator to render a decision on whether the 
 applicant satisfies the criteria under 
 subsection
            (c) .</DELETED>
 <DELETED>
            (ii) Notification.--Not later than 
 30 days after receiving an application under 
 subsection

    (a) , a primary Federal payment 
 stablecoin regulator shall notify the applicant 
 whether the primary Federal payment stablecoin 
 regulator considers the application to be 
 substantially complete and, if the application 
 is not substantially complete, the additional 
 information the applicant must provide in order 
 for the application to be considered 
 substantially complete.</DELETED>
 <DELETED>
            (iii) Material change in 
 circumstances.--An application considered 
 substantially complete under this subparagraph 
 remains substantially complete unless there is 
 a material change in circumstances that 
 requires the primary Federal payment stablecoin 
 regulator to treat the application as a new 
 application.</DELETED>
 <DELETED>

    (2) Denial of application.--</DELETED>
 <DELETED>
        (A) Grounds for denial.--</DELETED>
 <DELETED>
            (i) In general.--The primary 
 Federal payment stablecoin regulator shall only 
 deny a complete application received under 
 subsection

    (a) if the regulator determines that 
 the activities of the applicant would be unsafe 
 or unsound based on the factors described in 
 subsection
            (c) .</DELETED>
 <DELETED>
            (ii) Issuance not ground for 
 denial.--The issuance of a payment stablecoin 
 on an open, public, or decentralized network 
 shall not be a valid ground for denial of an 
 application.</DELETED>
 <DELETED>
        (B) Explanation required.--If the primary 
 Federal payment stablecoin regulator denies a complete 
 application received under subsection

    (a) , not later 
 than 30 days after the date of such denial, the 
 regulator shall provide the applicant with written 
 notice explaining the denial with specificity, 
 including all findings made by the regulator with 
 respect to all identified material shortcomings in the 
 application, including actionable recommendations on 
 how the applicant could address the identified material 
 shortcomings.</DELETED>
 <DELETED>
            (C) Opportunity for hearing; final 
 determination.--</DELETED>
 <DELETED>
            (i) In general.--Not later than 30 
 days after the date of receipt of any notice of 
 the denial of an application under this 
 section, the applicant may request, in writing, 
 an opportunity for a written or oral hearing 
 before the primary Federal payment stablecoin 
 regulator to appeal the denial.</DELETED>
 <DELETED>
            (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 
 submit written materials or provide oral 
 testimony and oral argument).</DELETED>
 <DELETED>
            (iii) Final determination.--Not 
 later than 60 days after the date of a hearing 
 under this subparagraph, the primary Federal 
 payment stablecoin regulator shall notify the 
 applicant of a final determination, which shall 
 contain a statement of the basis for that 
 determination, with specific 
 findings.</DELETED>
 <DELETED>
            (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 
 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.</DELETED>
 <DELETED>

    (3) Failure to render a decision.--If the primary 
 Federal payment stablecoin regulator fails to render a decision 
 on a complete application within the time period specified in 
 paragraph

    (1) , the application shall be deemed 
 approved.</DELETED>
 <DELETED>

    (4) Right to reapply.--The denial of an 
 application under this section shall not prohibit the applicant 
 from filing a subsequent application.</DELETED>
<DELETED>

    (e) Report on Pending Applications.--The primary Federal 
payment stablecoin regulators shall annually report to Congress on the 
applications under subsection

    (a) that have been pending for 180 days 
or more since the date the initial application was filed and for which 
the applicant has been informed that the application remains 
incomplete, including documentation on the status of such applications 
and why such applications have not yet been approved.</DELETED>
<DELETED>

    (f) Rulemaking.--Consistent with 

section 18, the primary 
Federal payment stablecoin regulators shall rules necessary for the 
regulation of the issuance of payment stablecoins, but may not impose 
requirements in addition to the requirements specified under 

section 4.</DELETED>

<DELETED>

SEC. 6. SUPERVISION AND ENFORCEMENT WITH RESPECT TO 
 SUBSIDIARIES OF INSURED DEPOSITORY INSTITUTIONS AND 
 COMPTROLLER-REGULATED ENTITIES.</DELETED>

<DELETED>

    (a) Supervision.--</DELETED>
 <DELETED>

    (1) In general.--Each permitted payment stablecoin 
 issuer that is not a State qualified payment stablecoin issuer 
 with a payment stablecoin with a consolidated total outstanding 
 issuance of less than $10,000,000,000 shall be subject to 
 supervision by the appropriate primary Federal payment 
 stablecoin regulator.</DELETED>
 <DELETED>

    (2) Submission of reports.--Each permitted payment 
 stablecoin issuer described in paragraph

    (1) shall, upon 
 request, submit to its primary Federal payment stablecoin 
 regulator a report on--</DELETED>
 <DELETED>
        (A) the financial condition of the 
 permitted payment stablecoin issuer;</DELETED>
 <DELETED>
        (B) the systems of the permitted payment 
 stablecoin issuer for monitoring and controlling 
 financial and operating risks; and</DELETED>
 <DELETED>
            (C) compliance by the permitted payment 
 stablecoin issuer (and any subsidiary thereof) with 
 this Act.</DELETED>
 <DELETED>

    (3) Examinations.--The primary Federal payment 
 stablecoin regulator shall examine a permitted payment 
 stablecoin issuer described in paragraph

    (1) in order to 
 assess--</DELETED>
 <DELETED>
        (A) the nature of the operations and 
 financial condition of the permitted payment stablecoin 
 issuer;</DELETED>
 <DELETED>
        (B) the financial, operational, 
 technological, and other risks within the permitted 
 payment stablecoin issuer that may pose a threat to--
 </DELETED>
 <DELETED>
            (i) the safety and soundness of 
 the permitted payment stablecoin issuer; 
 or</DELETED>
 <DELETED>
            (ii) the stability of the 
 financial system of the United States; 
 and</DELETED>
 <DELETED>
            (C) the systems of the permitted payment 
 stablecoin issuer for monitoring and controlling the 
 risks described in subparagraph
        (B) .</DELETED>
 <DELETED>

    (4) Requirements for efficiency.--</DELETED>
 <DELETED>
        (A) Use of existing reports.--In 
 supervising and examining a permitted payment 
 stablecoin issuer under this subsection, the primary 
 Federal payment stablecoin regulator shall, to the 
 fullest extent possible, use existing reports and other 
 supervisory information.</DELETED>
 <DELETED>
        (B) Avoidance of duplication.--A primary 
 Federal payment stablecoin regulator shall, to the 
 fullest extent possible, avoid duplication of 
 examination activities, reporting requirements, and 
 requests for information in carrying out this 
 subsection with respect to a permitted payment 
 stablecoin issuer.</DELETED>
 <DELETED>
            (C) Consideration of burden.--A primary 
 Federal payment stablecoin regulator shall, with 
 respect to any examination or request for the 
 submission of a report under this subsection, only 
 request examinations and reports at a cadence and in a 
 format that is similar to those required for similarly 
 situated entities regulated by the primary Federal 
 payment stablecoin regulator.</DELETED>
<DELETED>

    (b) Enforcement.--</DELETED>
 <DELETED>

    (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 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--</DELETED>
 <DELETED>
        (A) is recklessly violating or has 
 recklessly violated this Act or any regulation or order 
 issued under this Act; or</DELETED>
 <DELETED>
        (B) is recklessly violating or has 
 recklessly violated any condition imposed in writing by 
 the primary Federal payment stablecoin regulator in 
 connection with a written agreement entered into 
 between the permitted payment stablecoin issuer and the 
 primary Federal payment stablecoin regulator.</DELETED>
 <DELETED>

    (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 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--</DELETED>
 <DELETED>
        (A) cease and desist from such violation 
 or practice; or</DELETED>
 <DELETED>
        (B) take affirmative action to correct the 
 conditions resulting from any such violation or 
 practice.</DELETED>
 <DELETED>

    (3) Removal and prohibition authority.--The 
 primary Federal payment stablecoin regulator of a permitted 
 payment stablecoin issuer that is not a State qualified payment 
 stablecoin issuer may remove an institution-affiliated party of 
 the permitted payment stablecoin issuer from their position or 
 office or prohibit further participation in the affairs of the 
 permitted payment stablecoin issuer or all such permitted 
 payment stablecoin issuers by such institution-affiliated 
 party, if the primary Federal payment stablecoin regulator 
 determines that--</DELETED>
 <DELETED>
        (A) the institution-affiliated party has 
 knowingly committed a violation or attempted violation 
 of this Act or any regulation or order issued under 
 this Act; or</DELETED>
 <DELETED>
        (B) the institution-affiliated party has 
 knowingly committed a violation of any provision of 
 subchapter II of chapter 53 of title 31, United States 
 Code.</DELETED>
 <DELETED>

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

    (1) ,

    (2) , or

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

    (b) and

    (e) of sections 8 of the Federal Deposit Insurance 
 Act (12 U.S.C. 1818).</DELETED>
 <DELETED>
        (B) Judicial review.--A person aggrieved 
 by a final action under this subsection may obtain 
 judicial review of such action exclusively as provided 
 in 

section 8

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

    (h) ).</DELETED>
 <DELETED>
            (C) Injunction.--The primary Federal 
 payment stablecoin regulator may, in the discretion of 
 the regulator, follow the procedures provided in 
 

section 8
            (i) (1) of the Federal Deposit Insurance Act 
 (12 U.S.C. 1818
            (i) (1) ) for judicial enforcement of any 
 effective and outstanding notice or order issued under 
 this subsection.</DELETED>
 <DELETED>
            (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 in 

section 8
            (c) of the Federal 
 Deposit Insurance Act (12 U.S.C. 1818
            (c) ) to issue a 
 temporary cease-and-desist order.</DELETED>
 <DELETED>

    (5) Civil money penalties.--</DELETED>
 <DELETED>
        (A) Failure to be approved.--Any person 
 who issues a United States dollar-denominated payment 
 stablecoin in violation of 

section 3, and any 
 institution-affiliated party of such a person who 
 knowingly participates in issuing such a payment 
 stablecoin, shall be liable for a civil penalty of not 
 more than $100,000 for each day during which such 
 payment stablecoins are issued.</DELETED>
 <DELETED>
        (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.</DELETED>
 <DELETED>
            (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.</DELETED>
 <DELETED>
            (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 in 

section 8
            (i) (2) of the 
 Federal Deposit Insurance Act (12 U.S.C. 
 1818
            (i) (2) ).</DELETED>
 <DELETED>
        (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.</DELETED>
 <DELETED>

    (6) Non-applicability to a state qualified payment 
 stablecoin issuer.--Notwithstanding anything in this subsection 
 to the contrary, this subsection shall not apply to a State 
 qualified payment stablecoin issuer.</DELETED>

<DELETED>

SEC. 7. STATE QUALIFIED PAYMENT STABLECOIN ISSUERS.</DELETED>

<DELETED>

    (a) In General.--A State payment stablecoin regulator 
shall have supervisory, examination, and enforcement authority over all 
State qualified payment stablecoin issuers of such State.</DELETED>
<DELETED>

    (b) Authority To Enter Into Agreements With the Board.--A 
State payment stablecoin regulator may enter into a memorandum of 
understanding with the Board, by mutual agreement, under which the 
Board may participate in the supervision, examination, and enforcement 
of this Act with respect to the State qualified payment stablecoin 
issuers of such State.</DELETED>
<DELETED>
            (c) 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.</DELETED>
<DELETED>
            (d) Rulemaking.--A State payment stablecoin regulator may 
issue orders and rules under 

section 4 applicable to State qualified 
payment stablecoin issuers to the same extent as the primary Federal 
payment stablecoin regulators issue orders and rules under 

section 4 
applicable to permitted payment stablecoin issuers that are not a State 
qualified payment stablecoin issuers.</DELETED>
<DELETED>

    (e) Enforcement Authority in Unusual and Exigent 
Circumstances.--</DELETED>
 <DELETED>

    (1) Board.--</DELETED>
 <DELETED>
        (A) In general.--Subject to subparagraph
            (C) , under unusual and exigent circumstances that the 
 Board determines to exist, the Board may, after not 
 less than 48 hours prior written notice to the 
 applicable State payment stablecoin regulator, take an 
 enforcement action against a State qualified payment 
 stablecoin issuer or an institution-affiliated party of 
 such issuer for violations of this Act during such 
 unusual and exigent circumstances.</DELETED>
 <DELETED>
        (B) Rulemaking.--Consistent with 

section 18, the Board shall issue rules to set forth the 
 unusual and exigent circumstances in which the Board 
 may act under this paragraph.</DELETED>
 <DELETED>
            (C) Limitations.--If, after unusual and 
 exigent circumstances are determined to exist pursuant 
 to subparagraph
        (A) , the Board determines that there is 
 reasonable cause to believe that the continuation by a 
 State qualified payment stablecoin issuer of any 
 activity constitutes a serious risk to the financial 
 safety, soundness, or stability of the State qualified 
 payment stablecoin issuer, the Board may impose such 
 restrictions as the Board determines to be necessary to 
 address such risk during such usual and exigent 
 circumstances. Such restrictions shall be issued in the 
 form of a directive, with the effect of a cease and 
 desist order that has become final, to the State 
 qualified payment stablecoin issuer and any of its 
 affiliates, limiting--</DELETED>
 <DELETED>
            (i) the payment of dividends by 
 the State qualified payment stablecoin 
 issuer;</DELETED>
 <DELETED>
            (ii) transactions between the 
 State qualified payment stablecoin issuer, a 
 holding company, and the subsidiaries or 
 affiliates of either the State qualified 
 payment stablecoin issuer or the holding 
 company; and</DELETED>
 <DELETED>
            (iii) any activities of the State 
 qualified payment stablecoin issuer that might 
 create a serious risk that the liabilities of a 
 holding company and the affiliates of the 
 holding company may be imposed on the State 
 qualified payment stablecoin issuer.</DELETED>
 <DELETED>
            (D) Review of directive.--</DELETED>
 <DELETED>
            (i) Administrative review.--
 </DELETED>
 <DELETED>
            (I) In general.--After a 
 directive described in subparagraph
            (C) is issued, the State qualified payment 
 stablecoin issuer, or any institution-
 affiliated party of the State qualified 
 payment stablecoin issuer subject to 
 the directive, may object and present 
 to the Board, in writing, the reasons 
 why the directive should be modified or 
 rescinded.</DELETED>
 <DELETED>
            (II) 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.</DELETED>
 <DELETED>
            (ii) Judicial review.--</DELETED>
 <DELETED>
            (I) In general.--If the 
 Board affirms or modifies a directive 
 pursuant to clause
            (i) , any affected 
 party may immediately thereafter 
 petition the United States district 
 court for the district in which the 
 main office of the affected party is 
 located or in the United States 
 District Court for the District of 
 Columbia to stay, modify, terminate, or 
 set aside the directive.</DELETED>
 <DELETED>
            (II) Relief for 
 extraordinary cause.--Upon a showing of 
 extraordinary cause, an affected party 
 may petition for relief under subclause
            (I) without first pursuing or 
 exhausting the administrative remedies 
 under clause
            (i) .</DELETED>
 <DELETED>

    (2) Comptroller.--</DELETED>
 <DELETED>
        (A) 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.</DELETED>
 <DELETED>
        (B) Rulemaking.--Consistent with 

section 18, the Comptroller shall issue rules to set forth the 
 unusual and exigent circumstances in which the 
 Comptroller may act under this paragraph.</DELETED>
 <DELETED>
            (C) Limitations.--If, after unusual and 
 exigent circumstances are determined to exist under 
 subparagraph
        (A) , the Comptroller determines that there 
 is reasonable cause to believe that the continuation by 
 a State qualified payment stablecoin issuer that is a 
 nonbank entity of any activity constitutes a serious 
 risk to the financial safety, soundness, or stability 
 of the State qualified payment stablecoin issuer that 
 is a nonbank entity, the Comptroller shall impose such 
 restrictions as the Comptroller determines to be 
 necessary to address such risk during such unusual and 
 exigent circumstances. Such restrictions shall be 
 issued in the form of a directive, with the effect of a 
 cease and desist order that has become final, to the 
 State qualified payment stablecoin issuer that is a 
 nonbank entity and any of its affiliates, limiting--
 </DELETED>
 <DELETED>
            (i) the payment of dividends by 
 the State qualified payment stablecoin 
 issuer;</DELETED>
 <DELETED>
            (ii) transactions between the 
 State qualified payment stablecoin issuer, a 
 holding company, and the subsidiaries or 
 affiliates of either the State qualified 
 payment stablecoin issuer or the holding 
 company; and</DELETED>
 <DELETED>
            (iii) any activities of the State 
 qualified payment stablecoin issuer that might 
 create a serious risk that the liabilities of a 
 holding company and the affiliates of the 
 holding company may be imposed on the State 
 qualified payment stablecoin issuer.</DELETED>
 <DELETED>
            (D) Review of directive.--</DELETED>
 <DELETED>
            (i) Administrative review.--
 </DELETED>
 <DELETED>
            (I) In general.--After a 
 directive described in subparagraph
            (C) is issued, the Comptroller-regulated 
 entity, or any institution-affiliated 
 party of the Comptroller-regulated 
 entity subject to the directive, may 
 object and present to the Comptroller, 
 in writing, the reasons why the 
 directive should be modified or 
 rescinded.</DELETED>
 <DELETED>
            (II) Automatic lapse of 
 directive.--If, after 10 days after the 
 receipt of a response described in 
 subclause
            (I) , the Comptroller does not 
 affirm, modify, or rescind the 
 directive, the directive shall 
 automatically lapse.</DELETED>
 <DELETED>
            (ii) Judicial review.--</DELETED>
 <DELETED>
            (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 located or in the United 
 States District Court for the District 
 of Columbia to stay, modify, terminate, 
 or set aside the directive.</DELETED>
 <DELETED>
            (II) Relief for 
 extraordinary cause.--Upon a showing of 
 extraordinary cause, an affected party 
 may petition for relief under subclause
            (I) without first pursuing or 
 exhausting the administrative remedies 
 under clause
            (i) .</DELETED>
<DELETED>

    (f) Effect on State Law.--</DELETED>
 <DELETED>

    (1) Host state law.--The laws of a host State, 
 including generally applicable laws relating to consumer 
 protection, shall only apply to the activities conducted in the 
 host State by an out-of-State State qualified payment 
 stablecoin issuer to the same extent as such laws apply to the 
 activities conducted in the host State by an out-of-State 
 Federal qualified nonbank payment stablecoin issuer.</DELETED>
 <DELETED>

    (2) Home state law.--If any host State law is 
 determined not to apply under paragraph

    (1) , the laws of the 
 home State of the State qualified payment stablecoin issuer 
 shall govern the activities of the permitted payment stablecoin 
 issuer conducted in the host State.</DELETED>
 <DELETED>

    (3) Applicability.--The laws applicable under 
 paragraph

    (1) exclude host State laws governing the chartering, 
 licensure, or other authorization to do business in the host 
 State as a permitted payment stablecoin issuer pursuant to this 
 Act.</DELETED>

<DELETED>

SEC. 8. ANTI-MONEY LAUNDERING PROTECTIONS.</DELETED>

<DELETED>

    (a) 

=== Definitions. ===
-In this subsection:</DELETED>
 <DELETED>

    (1) Digital asset service provider.--The term 
 ``digital asset service provider''--</DELETED>
 <DELETED>
        (A) means a person that, for compensation 
 or profit, engages in the business in the United States 
 or for customers or users in the United States, of--
 </DELETED>
 <DELETED>
            (i) exchanging digital assets for 
 monetary value;</DELETED>
 <DELETED>
            (ii) exchanging digital assets for 
 other digital assets;</DELETED>
 <DELETED>
            (iii) transferring digital assets 
 to a third party;</DELETED>
 <DELETED>
            (iv) acting as a digital asset 
 custodian; or</DELETED>
 <DELETED>
            (v) participating in financial 
 services related to a digital asset issuance; 
 and</DELETED>
 <DELETED>
        (B) does not include--</DELETED>
 <DELETED>
            (i) a distributed ledger protocol 
 or a person solely developing such a protocol; 
 or</DELETED>
 <DELETED>
            (ii) a person solely validating 
 transactions or operating a distributed ledger 
 node.</DELETED>
 <DELETED>

    (2) Offering.--The term ``offering'' means making 
 available for purchase, sale, or exchange.</DELETED>
 <DELETED>

    (3) Distributed ledger protocol.--The term 
 ``distributed ledger protocol'' means publicly available and 
 accessible executable software deployed to a distributed 
 ledger, including smart contracts or networks of smart 
 contracts.</DELETED>
 <DELETED>

    (4) Lawful order.--The term ``lawful order'' means 
 any final and valid writ, process, order, rule, decree, 
 command, or other requirement issued or promulgated under 
 Federal law, issued by a court of competent jurisdiction or by 
 an authorized Federal agency pursuant to its statutory 
 authority, that--</DELETED>
 <DELETED>
        (A) requires a permitted payment 
 stablecoin issuer to seize, freeze, burn, or prevent 
 the transfer of payment stablecoins issued by the 
 permitted payment stablecoin issuer;</DELETED>
 <DELETED>
        (B) specifies the digital assets or 
 accounts subject to blocking with reasonable 
 particularity; and</DELETED>
 <DELETED>
            (C) is subject to judicial or 
 administrative review or appeal as provided by 
 law.</DELETED>
<DELETED>

    (b) Treasury Authority to Designate Noncompliant 
Issuers.--Not later than 30 days after the Department of the Treasury 
has identified the failure of a foreign issuer of any payment 
stablecoins trading in the United States that is not a permitted 
payment stablecoin issuer to comply with the terms of any lawful order, 
the Secretary of the Treasury, in coordination with relevant Federal 
agencies, shall designate the foreign issuer as noncompliant and notify 
the foreign issuer in writing of the designation.</DELETED>
<DELETED>
            (c) Publication of Designation; Prohibition on Secondary 
Trading.--</DELETED>
 <DELETED>

    (1) In general.--If a foreign issuer described in 
 subsection

    (b) does not come into compliance with the lawful 
 order within 30 days of receiving the written notice described 
 in that subsection, the Secretary of the Treasury shall--
 </DELETED>
 <DELETED>
        (A) publish the determination of 
 noncompliance in the Federal Register, including a 
 statement on the failure of the foreign issuer to 
 comply with the lawful order after the written notice; 
 and</DELETED>
 <DELETED>
        (B) issue a notification in the Federal 
 Register prohibiting digital asset service providers 
 from facilitating secondary trading of payment 
 stablecoins issued by the foreign issuer in the United 
 States.</DELETED>
 <DELETED>

    (2) Effective date of prohibition.--The 
 prohibition on facilitation of secondary trading described in 
 paragraph

    (1) shall become effective on the date that is 30 
 days after the date of issue of notification of the prohibition 
 in the Federal Register.</DELETED>
 <DELETED>

    (3) Waivers and extensions.--With respect to the 
 prohibition on facilitation of secondary trading described in 
 paragraph

    (1) , the Secretary of the Treasury may issue waivers 
 and time extensions to digital asset service providers on a 
 case by case basis.</DELETED>
 <DELETED>

    (4) Civil monetary penalties.--</DELETED>
 <DELETED>
        (A) Digital asset service providers.--Any 
 digital asset service provider that knowingly violates 
 a prohibition under paragraph

    (1)
        (B) shall be subject 
 to a civil monetary penalty of not more than $100,000 
 per violation per day.</DELETED>
 <DELETED>
        (B) Foreign payment stablecoin issuers.--
 Any foreign issuer of payment stablecoin that knowingly 
 continues to publicly offer a payment stablecoin in the 
 United States after publication of the determination of 
 noncompliance under paragraph

    (1)
        (A) shall be subject 
 to a civil monetary penalty of not more than $1,000,000 
 per violation per day, and the Secretary of the 
 Treasury may seek an injunction in a United States 
 District Court to bar the foreign issuer from engaging 
 in financial transactions in the United States or with 
 United States persons.</DELETED>
<DELETED>
            (d) Appeal.--A determination of noncompliance under 
subsection

    (b) is subject to judicial review in the United States Court 
of Appeals for the District of Columbia Circuit.</DELETED>
<DELETED>

    (e) Waiver, Licensing Authority, and Exceptions.--
</DELETED>
 <DELETED>

    (1) In general.--The Secretary of the Treasury may 
 offer a waiver, general license, or specific license to any 
 United States persons engaging in secondary trading described 
 in subsection
            (c) on a case by case basis if the Secretary 
 determines that--</DELETED>
 <DELETED>
        (A) prohibiting secondary trading would 
 adversely affect the financial system of the United 
 States; or</DELETED>
 <DELETED>
        (B) the foreign issuer of the payment 
 stablecoin is taking tangible steps to remedy the 
 failure to comply with the lawful order that resulted 
 in the noncompliance determination under subsection

    (b) .</DELETED>
 <DELETED>

    (2) National security waiver.--The President may 
 waive the application of the secondary trading restrictions 
 under subsection
            (c) if the President determines that the 
 waiver is in the national security interest of the United 
 States.</DELETED>
 <DELETED>

    (3) Exceptions for intelligence and law 
 enforcement activities.--This Act shall not apply with respect 
 to--</DELETED>
 <DELETED>
        (A) activities subject to the reporting 
 requirements under title V of the National Security Act 
 of 1947 (50 U.S.C. 3091 et seq.) or any authorized 
 intelligence activities of the United States; 
 or</DELETED>
 <DELETED>
        (B) activities necessary to carry out or 
 assist law enforcement activity of the United 
 States.</DELETED>
 <DELETED>

    (4) Report required.--Not later than 7 days after 
 issuing a waiver or a license under paragraph

    (1) , the 
 Secretary of the Treasury shall submit a report to the Chairmen 
 and Ranking members of the Committee on Banking, Housing, and 
 Urban Affairs of the Senate and the Committee on Financial 
 Services of the House of Representatives, including the text of 
 the waiver or license, as well as the facts and circumstances 
 justifying the waiver determination, and provide a briefing on 
 the report.</DELETED>

<DELETED>

SEC. 9. CUSTODY OF PAYMENT STABLECOIN RESERVE AND 
 COLLATERAL.</DELETED>

<DELETED>

    (a) In General.--A person may only engage in the business 
of providing custodial or safekeeping services for the payment 
stablecoin reserve, the payment stablecoins used as collateral, or the 
private keys of permitted payment stablecoins if the person--</DELETED>
 <DELETED>

    (1) is subject to--</DELETED>
 <DELETED>
        (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</DELETED>
 <DELETED>
        (B) supervision by a State bank 
 supervisor, as defined under 

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

section 6003 
 of the Anti-Money Laundering Act of 2020, 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</DELETED>
 <DELETED>

    (2) complies with the requirements under 
 subsection

    (b) , unless such person complies with similar 
 requirements as required by a primary Federal payment 
 stablecoin regulator, the Securities and Exchange Commission, 
 or the Commodity Futures Trading Commission.</DELETED>
<DELETED>

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

    (a) shall--</DELETED>
 <DELETED>

    (1) treat and deal with the payment stablecoins, 
 private keys, cash, and other property of a person for whom or 
 on whose behalf the person 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 is not the property of such 
 person; and</DELETED>
 <DELETED>

    (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.</DELETED>
<DELETED>
            (c) Commingling Prohibited.--</DELETED>
 <DELETED>

    (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 be segregated 
 from and not be commingled with the funds of the 
 person.</DELETED>
 <DELETED>

    (2) Exception.--Notwithstanding paragraph

    (1) --
 </DELETED>
 <DELETED>
        (A) the payment stablecoins, cash, and 
 other property of a customer may, for convenience, be 
 commingled and deposited in an omnibus account holding 
 the payment stablecoins, cash, and other property of 
 more than 1 customer at a State chartered depository 
 institution, an insured depository institution, 
 national bank, or trust company;</DELETED>
 <DELETED>
        (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) ; or</DELETED>
 <DELETED>
            (C) in accordance with such terms and 
 conditions as a primary Federal payment stablecoin 
 regulator 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 primary Federal payment 
 stablecoin regulator to be separately accounted for, 
 treated, and dealt with as belonging to 
 customers.</DELETED>
<DELETED>
            (d) Regulatory Information.--A person described under 
subsection

    (a) shall submit to the applicable primary Federal payment 
stablecoin regulator information concerning the person's business 
operations and processes to protect customer assets, in such form and 
manner as the primary regulator shall determine.</DELETED>
<DELETED>

    (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.</DELETED>

<DELETED>

SEC. 10. TREATMENT OF PAYMENT STABLECOIN ISSUERS IN INSOLVENCY 
 PROCEEDINGS.</DELETED>

<DELETED>

    (a) In General.--In any insolvency proceeding of a 
permitted payment stablecoin issuer under Federal or State law, 
including any proceeding under title 11, United States Code, and any 
insolvency proceeding administered by a State payment stablecoin 
regulator with respect to a permitted payment stablecoin issuer, the 
claim of a person holding payment stablecoins issued by the permitted 
payment stablecoin issuer shall have priority over the claims of the 
permitted payment stablecoin issuer and any other creditor of the 
permitted payment stablecoin issuer, with respect to required payment 
stablecoin reserves, subject to 

section 507

    (e) of title 11, United 
States Code.</DELETED>
<DELETED>

    (b) 

=== Definitions. ===
-

Section 101 of title 11, United States 
Code, is amended by adding after paragraph

    (40B) the 
following:</DELETED>
 <DELETED> ``

    (40C) The terms `payment stablecoin' and 
 `permitted payment stablecoin issuer' have the meanings given 
 those terms in 

section 2 of the Guiding and Establishing 
 National Innovation for U.S. Stablecoins Act of 
 2025.''.</DELETED>
<DELETED>
            (c) Automatic Stay.--

Section 362 of title 11, United 
States Code is amended--</DELETED>
 <DELETED>

    (1) in subsection

    (a) --</DELETED>
 <DELETED>
        (A) in paragraph

    (7) , by striking 
 ``and'';</DELETED>
 <DELETED>
        (B) in paragraph

    (8) , by striking the 
 period and inserting ``; and''; and</DELETED>
 <DELETED>
            (C) by adding at the end the 
 following:</DELETED>
 <DELETED> ``

    (9) the redemption of payment stablecoins issued 
 by the debtor, from payment stablecoin reserves required to be 
 maintained under 

section 4 of the Guiding and Establishing 
 National Innovation for U.S. Stablecoins Act of 2025.''; 
 and</DELETED>
 <DELETED>

    (2) in subsection
            (d) --</DELETED>
 <DELETED>
        (A) in paragraph

    (3)
        (B)
            (ii) , by striking 
 ``or'' at the end;</DELETED>
 <DELETED>
        (B) in paragraph

    (4)
        (B) , by striking the 
 period at the end and inserting ``; or''; and</DELETED>
 <DELETED>
            (C) by inserting after paragraph

    (4) the 
 following:</DELETED>
 <DELETED> ``

    (5) with respect to the redemption of payment 
 stablecoins held by a person, if the court finds, subject to 
 the motion and attestation of the debtor on the petition date, 
 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.''.</DELETED>
<DELETED>
            (d) Priority in Bankruptcy Proceedings.--

Section 507 of 
title 11, United States Code, is amended--</DELETED>
 <DELETED>

    (1) in subsection

    (a) , by striking ``The 
 following'' and inserting ``Subject to subsection

    (e) , the 
 following''; and</DELETED>
 <DELETED>

    (2) by adding at the end the following:</DELETED>
<DELETED> ``

    (e) 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 debtor, any remaining claim of a person holding a payment 
stablecoin issued by the debtor 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 
Guiding and Establishing National Innovation for U.S. Stablecoins Act 
of 2025 would have required additional reserves to be maintained by the 
debtor for payment stablecoin holders.''.</DELETED>
<DELETED>

    (e) Payment Stablecoin Reserves.--

Section 541

    (b) of title 
11, United States Code, is amended--</DELETED>
 <DELETED>

    (1) in paragraph

    (9) , in the flush text following 
 subparagraph
        (B) , by striking ``or'' at the end;</DELETED>
 <DELETED>

    (2) in paragraph

    (10)
            (C) , by striking the period 
 and inserting ``; or''; and</DELETED>
 <DELETED>

    (3) by inserting after paragraph

    (10) the 
 following:</DELETED>
 <DELETED> ``

    (11) required payment stablecoin reserves under 
 

section 4 of the Guiding and Establishing National Innovation 
 for U.S. Stablecoins Act of 2025.''.</DELETED>
<DELETED>

    (f) Intervention.--

Section 1109 of title 11, United States 
Code, is amended by adding at the end the following:</DELETED>
<DELETED> ``
            (c) The Comptroller of the Currency or State payment 
stablecoin regulator (as defined in 

section 2 of the Guiding and 
Establishing National Innovation for U.S. Stablecoins Act of 2025) 
shall raise and shall appear and be heard on any issue, including the 
protection of customers, in a case under this chapter in which the 
debtor is a permitted payment stablecoin issuer.''.</DELETED>
<DELETED>

    (g) 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:</DELETED>
 <DELETED>

    (1) A depository institution (as defined in 
 

section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
 1813)) shall be resolved by the Federal Deposit Insurance 
 Corporation, National Credit Union Administration, or State 
 payment stablecoin regulator, as applicable.</DELETED>
 <DELETED>

    (2) A subsidiary of a depository institution (as 
 defined in 

section 3 of the Federal Deposit Insurance Act (12 
 U.S.C. 1813)) or a nonbank entity may be considered a debtor 
 under title 11, United States Code.</DELETED>

<DELETED>

SEC. 11. INTEROPERABILITY STANDARDS.</DELETED>

<DELETED> The 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 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--</DELETED>
 <DELETED>

    (1) other permitted payment stablecoin issuers; 
 and</DELETED>
 <DELETED>

    (2) the broader digital finance ecosystem, 
 including accepted communications protocols and blockchains, 
 permissioned or public.</DELETED>

<DELETED>

SEC. 12. STUDY ON NON-PAYMENT STABLECOINS.</DELETED>

<DELETED>

    (a) Study by Treasury.--</DELETED>
 <DELETED>

    (1) Study.--The Secretary of the Treasury, in 
 consultation with the Board, the Comptroller, the Corporation, 
 the Securities and Exchange Commission, and the Commodity 
 Futures Trading Commission shall carry out a study of non-
 payment stablecoins, including endogenously collateralized 
 payment stablecoins.</DELETED>
 <DELETED>

    (2) 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 paragraph

    (1) , including 
 an analysis of--</DELETED>
 <DELETED>
        (A) the categories of non-payment 
 stablecoins, including the benefits and risks of 
 technological design features;</DELETED>
 <DELETED>
        (B) the participants in non-payment 
 stablecoin arrangements;</DELETED>
 <DELETED>
            (C) utilization and potential utilization 
 of non-payment stablecoins;</DELETED>
 <DELETED>
            (D) nature of reserve 
 compositions;</DELETED>
 <DELETED>
        (E) types of algorithms being 
 employed;</DELETED>
 <DELETED>
        (F) governance structure, including 
 aspects of decentralization;</DELETED>
 <DELETED>
        (G) nature of public promotion and 
 advertising; and</DELETED>
 <DELETED>
        (H) clarity and availability of consumer 
 notices disclosures.</DELETED>
<DELETED>

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

    (1) in which its originator has represented will 
 be converted, redeemed, or repurchased for a fixed amount of 
 monetary value; and</DELETED>
 <DELETED>

    (2) that relies solely on the value of another 
 digital asset created or maintained by the same originator to 
 maintain the fixed price.</DELETED>

<DELETED>

SEC. 13. REPORTS.</DELETED>

<DELETED>

    (a) Annual Reporting Requirement.--Beginning on the date 
that is 1 year after the date of enactment of this Act, and annually 
thereafter, the primary Federal payment stablecoin regulators shall 
submit to the Committee on Banking, Housing, and Urban Affairs of the 
Senate, the Committee on Financial Services of the House of 
Representatives, and the Director of the Office of Financial Research a 
report on the status of the payment stablecoin industry, including--
</DELETED>
 <DELETED>

    (1) an overview of trends in payment stablecoin 
 activities;</DELETED>
 <DELETED>

    (2) a summary of the number of applications for 
 permitted payment stablecoin issuer under 

section 5, including 
 aggregate approvals and rejections of applications; 
 and</DELETED>
 <DELETED>

    (3) a description of the potential financial 
 stability risks posed to the safety and soundness of the 
 broader financial system by payment stablecoin 
 activities.</DELETED>
<DELETED>

    (b) FSOC Report.--The Financial Stability Oversight 
Council shall incorporate the findings in the report under subsection

    (a) into the annual report of the Council required under 

section 112

    (a)

    (2)
        (N) of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (12 U.S.C. 5322).</DELETED>

<DELETED>

SEC. 14. AUTHORITY OF BANKING INSTITUTIONS.</DELETED>

<DELETED>

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

    (1) accepting or receiving deposits and issuing 
 digital assets that represent deposits;</DELETED>
 <DELETED>

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

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

    (b) Regulatory Review.--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 can engage in the payment 
stablecoin activities contemplated in, and in accordance with, this 
Act.</DELETED>
<DELETED>
            (c) Treatment of Custody Activities.--The appropriate 
Federal banking agency (as defined under 

section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813)), 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 institution-affiliated party thereof--</DELETED>
 <DELETED>

    (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 activities;</DELETED>
 <DELETED>

    (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--</DELETED>
 <DELETED>
        (A) the appropriate Federal banking 
 agency;</DELETED>
 <DELETED>
        (B) the National Credit Union 
 Administration (in the case of a credit 
 union);</DELETED>
 <DELETED>
            (C) a State bank supervisor (as defined 
 under 

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

section 6003 of the Anti-Money Laundering 
 Act of 2020);</DELETED>
 <DELETED>

    (3) to recognize a liability for any obligations 
 related to activities or services performed for digital assets 
 that the entity does not own in any amount greater than the 
 expense recognized in the income statement or the consideration 
 received as a result of the corresponding obligation.</DELETED>
<DELETED>
            (d) === Definitions. ===
-In this section:</DELETED>
 <DELETED>

    (1) Depository institution.--The term ``depository 
 institution'' has the meaning given that term under 

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

    (2) Credit union terms.--The terms ``Federal 
 credit union'' and ``State credit union'' have the meaning 
 given those terms, respectively, under 

section 101 of the 
 Federal Credit Union Act.</DELETED>

<DELETED>

SEC. 15. AMENDMENTS TO CLARIFY THAT PAYMENT STABLECOINS ARE 
 NOT SECURITIES OR COMMODITIES AND PERMITTED PAYMENT 
 STABLECOIN ISSUERS ARE NOT INVESTMENT 
 COMPANIES.</DELETED>

<DELETED>

    (a) Investment Advisers Act of 1940.--

Section 202

    (a)

    (18) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2

    (a)

    (18) ) is 
amended by adding at the end the following: ``The term `security' does 
not include a payment stablecoin issued by a permitted payment 
stablecoin issuer, as such terms are defined in 

section 2 of the 
Guiding and Establishing National Innovation for U.S. Stablecoins Act 
of 2025.''.</DELETED>
<DELETED>

    (b) Investment Company Act of 1940.--The Investment 
Company Act of 1940 is amended--</DELETED>
 <DELETED>

    (1) in 

section 2

    (a)

    (36) (15 U.S.C. 80a-
 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 in 

section 2 of the Guiding and 
 Establishing National Innovation for U.S. Stablecoins Act of 
 2025.''; and</DELETED>
 <DELETED>

    (2) in 

section 3
            (c) (3) (15 U.S.C. 80a-3
            (c) (3) ), by 
 inserting ``any permitted payment stablecoin issuer, as such 
 term is defined in 

section 2 of the Guiding and Establishing 
 National Innovation for U.S. Stablecoins Act of 2025;'' after 
 ``therefor;''.</DELETED>
<DELETED>
            (c) Securities Act of 1933.--

Section 2

    (a)

    (1) of the 
Securities Act of 1933 (15 U.S.C. 77b

    (a)

    (1) ) is amended by adding at 
the end the following: ``The term `security' does not include a payment 
stablecoin issued by a permitted payment stablecoin issuer, as such 
terms are defined in 

section 2 of the Guiding and Establishing National 
Innovation for U.S. Stablecoins Act of 2025.''.</DELETED>
<DELETED>
            (d) Securities Exchange Act of 1934.--

Section 3

    (a)

    (10) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78c

    (a)

    (10) ) is amended 
by adding at the end the following: ``The term `security' does not 
include a payment stablecoin issued by a permitted payment stablecoin 
issuer, as such terms are defined in 

section 2 of the Guiding and 
Establishing National Innovation for U.S. Stablecoins Act of 
2025.''.</DELETED>
<DELETED>

    (e) Securities Investor Protection Act of 1970.--

Section 16

    (14) of the Securities Investor Protection Act of 1970 (15 U.S.C. 
78lll

    (14) ) is amended by adding at the end the following: ``The term 
`security' does not include a payment stablecoin issued by a permitted 
payment stablecoin issuer, as such terms are defined in 

section 2 of 
the Guiding and Establishing National Innovation for U.S. Stablecoins 
Act of 2025.''.</DELETED>
<DELETED>

    (f) Commodity Exchange Act.--

Section 1a of the Commodity 
Exchange Act (7 U.S.C. 1a) is amended by adding at the end the 
following: ``The term `commodity' does not include a payment stablecoin 
issued by a permitted payment stablecoin issuer, as such terms are 
defined in 

section 2 of the Guiding and Establishing National 
Innovation for U.S. payment stablecoins Act of 2025.''</DELETED>

<DELETED>

SEC. 16. RECIPROCITY FOR PAYMENT STABLECOINS ISSUED IN 
 OVERSEAS JURISDICTIONS.</DELETED>

<DELETED> The Secretary of the Treasury shall create and implement 
reciprocal arrangements or other bilateral agreements between the 
United States and jurisdictions with substantially similar payment 
stablecoin regulatory regimes to the requirements under this Act, 
including reserve requirements, supervision, anti-money laundering and 
counter-terrorism features, sanctions compliance standards, liquidity 
requirements, and risk management standards, to facilitate 
international transactions and interoperability with United States 
dollar-denominated payment stablecoins issued overseas. The Secretary 
of the Treasury shall aim to complete such arrangements not later than 
the date that is 2 years after the date of enactment of this 
Act.</DELETED>

<DELETED>

SEC. 17. EFFECTIVE DATE.</DELETED>

<DELETED>

    (a) In General.--This Act, and the amendments made by this 
Act, shall take effect on the earlier of--</DELETED>
 <DELETED>

    (1) 18 months after the date of enactment of this 
 Act; or</DELETED>
 <DELETED>

    (2) the date that is 120 days after the date on 
 which the primary Federal payment stablecoin regulators issue 
 any final regulations implementing this Act.</DELETED>
<DELETED>

    (b) Notice to Congress.--The primary Federal payment 
stablecoin regulators shall notify Congress upon beginning to process 
applications under this Act.</DELETED>
<DELETED>
            (c) 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 described under subsection

    (a) , with respect to--
</DELETED>
 <DELETED>

    (1) a subsidiary of an insured depository 
 institution, if the insured depository institution has an 
 application pending for the subsidiary to become a permitted 
 payment stablecoin issuer on that effective date; or</DELETED>
 <DELETED>

    (2) a nonbank entity with an application pending 
 to become a Comptroller-regulated entity on that effective 
 date.</DELETED>

<DELETED>

SEC. 18. RULEMAKING.</DELETED>

<DELETED>

    (a) 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 implement this Act through appropriate 
notice and comment rulemaking, including promulgating regulations as 
described in this Act as necessary.</DELETED>
<DELETED>

    (b) Coordination.--Federal payment stablecoin regulators 
and State payment stablecoin regulators should coordinate on the 
issuance of any regulations to implement this Act.</DELETED>
<DELETED>
            (c) Report Required.--Not later than 180 days after the 
date of enactment 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 Representatives 
a report that confirms and describes the rules promulgated to implement 
this Act.</DELETED>

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Guiding and Establishing National 
Innovation for U.S. Stablecoins Act of 2025'' or the ``GENIUS Act of 
2025''.

SEC. 2. DEFINITIONS.

 In this Act:

    (1) 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.

    (2) Board.--The term ``Board'' means the Board of Governors 
 of the Federal Reserve System.

    (3) Comptroller.--The term ``Comptroller'' means the Office 
 of the Comptroller of the Currency.

    (4) Comptroller-regulated entity.--The term ``Comptroller-
 regulated entity'' means--
        (A) any Federal qualified nonbank payment 
 stablecoin issuer that is subject to regulation and 
 supervision exclusively by the Comptroller, pursuant to 
 

section 4

    (a)

    (7) ; and
        (B) any entity chartered by the Comptroller.

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

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

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

    (8) Federal qualified nonbank payment stablecoin issuer.--
 The term ``Federal qualified nonbank payment stablecoin 
 issuer'' means a nonbank entity, other than a State qualified 
 payment stablecoin issuer, approved by the Comptroller, 
 pursuant to 

section 5, to issue payment stablecoins.

    (9) Institution-affiliated party.--With respect to a 
 permitted payment stablecoin issuer, the term ``institution-
 affiliated party'' means any director, officer, employee, or 
 controlling stockholder of the permitted payment stablecoin 
 issuer.

    (10) 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, as defined in 

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

    (11) Monetary value.--The term ``monetary value'' means a 
 national currency or deposit (as defined in 

section 3 of the 
 Federal Deposit Insurance Act) denominated in a national 
 currency.

    (12) Money.--The term ``money'' means any financial 
 instrument that is--
        (A) legal tender;
        (B) required to be received by a taxing authority 
 in satisfaction of tax obligations; or
            (C) widely accepted in an economy for the payment 
 of goods or services.

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

section 16 of the 
 Federal Reserve Act (12 U.S.C. 411)).
        (B) Money standing to the credit of an account with 
 a Federal Reserve Bank.
            (C) Money issued by a foreign central bank.
            (D) Money issued by an intergovernmental 
 organization pursuant to an agreement by 1 or more 
 governments.

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

    (15) Payment stablecoin.--The term ``payment stablecoin''--
        (A) means a digital asset--
            (i) that is or is designed to be used as a 
 means of payment or settlement; and
            (ii) the issuer of which--
            (I) is obligated to convert, 
 redeem, or repurchase for a fixed 
 amount of monetary value, not including 
 a digital asset denominated in a fixed 
 amount of monetary value;
            (II) represents that such issuer 
 will maintain or creates the reasonable 
 expectation that it will maintain a 
 stable value relative to the value of a 
 fixed amount of monetary value; or
            (III) has complied with the 
 authorization requirements of this Act; 
 and
        (B) that--
            (i) is not a national currency;
            (ii) is not a deposit (as defined in 
 

section 3 of the Federal Deposit Insurance 
 Act), including a deposit recorded using 
 distributed ledger technology;
            (iii) does not offer a payment of yield or 
 interest; and
            (iv) is not a security, as defined in 
 

section 2 of the Securities Act of 1933 (15 
 U.S.C. 77b), 

section 3 of the Securities 
 Exchange Act of 1934 (15 U.S.C. 78c), or 
 

section 2 of the Investment Company Act of 1940 
 (15 U.S.C. 80a-2), other than a bond, note, 
 evidence of indebtedness, or investment 
 contract satisfying the conditions described in 
 subparagraph
        (A) .

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

section 5;
        (B) a Federal qualified nonbank payment stablecoin 
 issuer that has been approved to issue payment 
 stablecoins under 

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

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

    (18) Primary federal payment stablecoin regulator.--The 
 term ``primary Federal payment stablecoin regulator'' means--
        (A) with respect to a subsidiary of an insured 
 depository institution (other than an insured credit 
 union), the appropriate Federal banking agency (as 
 defined under 

section 3 of the Federal Deposit 
 Insurance Act (12 U.S.C. 1813)) of such insured 
 depository institution;
        (B) with respect to an insured credit union or a 
 subsidiary of an insured credit union, the National 
 Credit Union Administration;
            (C) with respect to a State chartered depository 
 institution not specified under subparagraph
        (A) , the 
 Corporation, the Comptroller, or the Board; and
            (D) with respect to a Federal qualified nonbank 
 payment stablecoin issuer or any entity chartered by 
 the Comptroller, the Comptroller.

    (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 of the United 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 is legally established under the laws of a State and 
 approved to issue payment stablecoins by a State payment 
 stablecoin regulator.

    (22) State payment stablecoin regulator.--The term ``State 
 payment stablecoin regulator'' means a State agency that has 
 primary regulatory and supervisory authority in such State over 
 entities that issue payment stablecoins.

    (23) State chartered depository institution.--The term 
 ``State chartered depository institution'' has the meaning 
 given the term ``State depository institution'' in 

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

    (24) 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) ); and
        (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.

SEC. 3. ISSUANCE AND TREATMENT OF PAYMENT STABLECOINS.

    (a) Issue.--It shall be unlawful for any person other than a 
permitted payment stablecoin issuer to issue a payment stablecoin in 
the United States.

    (b) Treatment.--A payment stablecoin that is not issued by a 
permitted payment stablecoin issuer shall not be--

    (1) treated as cash or a cash equivalent for accounting 
 purposes;

    (2) eligible as cash or a cash equivalent margin and 
 collateral for futures commission merchants, derivative 
 clearing organizations, broker-dealers, registered clearing 
 agencies, and swap dealers; or

    (3) acceptable as a settlement asset to facilitate 
 wholesale payments between banking organizations or by a 
 payment infrastructure to facilitate exchange and settlement 
 among banking organizations.
            (c) Penalty for Violation.--

    (1) In general.--Whoever knowingly participates in a 
 violation of subsection

    (a) shall be fined not more than 
 $1,000,000 for each such violation, imprisoned for not more 
 than 5 years, or both.

    (2) Referral to attorney general.--If a primary Federal 
 payment stablecoin regulator has reason to believe that any 
 person has knowingly violated subsection

    (a) , the primary 
 Federal payment stablecoin regulator shall refer the matter to 
 the Attorney General.

SEC. 4. REQUIREMENTS FOR ISSUING PAYMENT STABLECOINS.

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

    (1) In general.--Permitted payment stablecoin issuers 
 shall--
        (A) maintain reserves backing the outstanding 
 payment stablecoins of the permitted payment stablecoin 
 issuer on an at least 1 to 1 basis, with reserves 
 comprising--
            (i) United States coins and currency 
 (including Federal reserve notes) or money 
 standing to the credit of an account with a 
 Federal Reserve Bank;
            (ii) funds held as demand deposits (or 
 other deposits that may be withdrawn upon 
 request at any time) or insured shares at an 
 insured depository institution (including any 
 foreign branches and agencies of an insured 
 depository institution), subject to limitations 
 established by the Corporation and the National 
 Credit Union Administration, as applicable, to 
 address safety and soundness risks of such 
 insured depository institution;
            (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 with the 
 permitted payment stablecoin issuer acting as a 
 seller of securities and with an overnight 
 maturity that are backed by Treasury bills with 
 a maturity of 93 days or less;
            (v) reverse repurchase agreements with the 
 permitted payment stablecoin issuer acting as a 
 purchaser of securities and with an overnight 
 maturity that are collateralized by Treasury 
 notes, bills, or bonds on an overnight basis, 
 subject to overcollateralization in line with 
 standard market terms, that are--
            (I) tri-party;
            (II) centrally cleared through a 
 clearing house registered with the 
 Securities and Exchange Commission; or
            (III) bilateral with a counterparty 
 that the issuer has determined to be 
 adequately creditworthy even in the 
 event of severe market stress;
            (vi) securities issued by an investment 
 company registered under 

section 8

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

    (a) ) that operates as a money market fund in 
 compliance with rule 2a-7 issued under that Act 
 (or any successor rule) and that are invested 
 solely in underlying assets described in 
 clauses
            (i) through
            (v) of subparagraph
        (A) ;
            (vii) any other similarly liquid federal 
 government issued asset approved by the primary 
 Federal payment stablecoin regulator, in 
 consultation with the State payment stablecoin 
 regulator, if applicable, of the permitted 
 payment stablecoin issuer; or
            (viii) any reserve described in clauses
            (i) through
            (vii) in tokenized form, provided that 
 such reserves comply with all applicable laws 
 and regulations;
        (B) publicly disclose the issuer's redemption 
 policy;
            (C) establish procedures for timely redemption of 
 outstanding payment stablecoins; and
            (D) publish the monthly composition of the issuer's 
 reserves on the website of the issuer, containing--
            (i) the total number of outstanding payment 
 stablecoins issued by the issuer; and
            (ii) the amount and composition of the 
 reserves described under subparagraph
        (A) .

    (2) Prohibition on rehypothecation.--Reserves required 
 under paragraph

    (1)
        (A) may not be pledged, rehypothecated, or 
 reused by the permitted payment stablecoin issuer, either 
 directly or indirectly, except for the purpose of--
        (A) satisfying margin obligations in connection 
 with investments in permitted reserves under clauses
            (iv) and
            (v) of paragraph

    (1)
        (A) ;
        (B) satisfying obligations associated with the use 
 or receipt of provision of standard custodial services; 
 or
            (C) creating liquidity to meet reasonable 
 expectations of requests to redeem payment stablecoins, 
 such that reserves in the form of Treasury bills may be 
 sold as purchased securities for repurchase agreements 
 with a maturity of 93 days or less, provided that 
 either--
            (i) the repurchase agreements are cleared 
 by a clearing agency registered with the 
 Securities and Exchange Commission; or
            (ii) the permitted payment stablecoin 
 issuer receives the prior approval of its 
 primary Federal payment stablecoin regulator or 
 State payment stablecoin regulator, as 
 applicable.

    (3) Monthly certification; examination of reports by 
 registered public accounting firm.--
        (A) In general.--A permitted payment stablecoin 
 issuer shall, each month, have the information 
 disclosed in the previous month-end report required 
 under paragraph

    (1)
            (D) examined by a registered public 
 accounting firm.
        (B) Certification.--Each month, the Chief Executive 
 Officer and Chief Financial Officer of a permitted 
 payment stablecoin issuer shall submit a certification 
 as to the accuracy of the monthly report to, as 
 applicable--
            (i) the primary Federal payment stablecoin 
 regulator of the permitted payment stablecoin 
 issuer; or
            (ii) the State payment stablecoin regulator 
 of the permitted payment stablecoin issuer.
            (C) Criminal penalty.--Any person who submits a 
 certification required under subparagraph
        (B) knowing 
 that such certification is false shall be subject to 
 the criminal penalties set forth under 

section 1350
            (c) of title 18, United States Code.

    (4) Capital, liquidity, and risk management requirements.--
        (A) In general.--The primary Federal payment 
 stablecoin regulators shall, jointly, or in the case of 
 a State qualified payment stablecoin issuer, the State 
 payment stablecoin regulator shall, consistent with 
 

section 18, issue--
            (i) capital requirements applicable to 
 permitted payment stablecoin issuers that--
            (I) are tailored to the business 
 model and risk profile of permitted 
 payment stablecoin issuers;
            (II) do not exceed requirements 
 which are sufficient to ensure the 
 ongoing operations of permitted payment 
 stablecoin issuers; and
            (III) in the case of the primary 
 Federal payment stablecoin regulators, 
 if the primary Federal payment 
 stablecoin regulators determine that a 
 capital buffer is necessary to ensure 
 the ongoing operations of permitted 
 payment stablecoin issuers, may include 
 capital buffers that are tailored to 
 the business model and risk profile of 
 permitted payment stablecoin issuers;
            (ii) regulations implementing the liquidity 
 standard under clause
            (i) ;
            (iii) reserve asset diversification and 
 interest rate risk management standards 
 applicable to permitted payment stablecoin 
 issuers that--
            (I) are tailored to the business 
 model and risk profile of permitted 
 payment stablecoin issuers; and
            (II) do not exceed standards which 
 are sufficient to ensure the ongoing 
 operations of permitted payment 
 stablecoin issuers; and
            (iv) appropriate operational, compliance, 
 and information technology risk management 
 standards, including Bank Secrecy Act and 
 sanctions compliance, that--
            (I) are tailored to the business 
 model and risk profile of permitted 
 payment stablecoin issuers; and
            (II) are consistent with applicable 
 law.
        (B) Rule of construction.--Nothing in this 
 paragraph shall be construed to limit--
            (i) the authority of the primary Federal 
 regulators, in prescribing standards under this 
 paragraph, to tailor or differentiate among 
 issuers on an individual basis or by category, 
 taking into consideration the capital 
 structure, business model risk profile, 
 complexity, financial activities (including 
 financial activities of subsidiaries), size, 
 and any other risk related factors of permitted 
 payment stablecoin issuers that the primary 
 Federal regulator determines appropriate, 
 provided that such tailoring or differentiation 
 occurs without respect to whether a permitted 
 payment stablecoin issuer is regulated by a 
 State payment stablecoin regulator; or
            (ii) the supervisory, regulatory, or 
 enforcement authority of a Federal banking 
 agency to further the safe and sound operation 
 of an institution for which the Federal banking 
 agency is the appropriate Federal banking 
 agency (as defined under 

section 3 of the 
 Federal Deposit Insurance Act (12 U.S.C. 
 1813)).
            (C) Applicability of existing capital standards.--
            (i) === Definitions. ===
-In this subparagraph--
            (I) ``appropriate Federal banking 
 agency'' has the meaning given that 
 term in 

section 3

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

    (q) ; and
            (II) ``depository institution 
 holding company'' has the meaning given 
 that term under 

section 171

    (a)

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

    (a)

    (3) ).
            (ii) Applicability of financial stability 
 act.--With respect to the promulgation of rules 
 under subparagraph
        (A) and clauses
            (iii) and
            (iv) of this subparagraph, 

section 171 of the 
 Financial Stability Act of 2010 (12 U.S.C. 
 5371) shall not apply.
            (iii) Rules relating to leverage capital 
 requirements or risk-based capital 
 requirements.--Any rule issued by an 
 appropriate Federal banking agency that 
 imposes, on a consolidated basis, a leverage 
 capital requirement or risk-based capital 
 requirement with respect to an insured 
 depository institution or depository 
 institution holding company shall provide that, 
 for purposes of such leverage capital 
 requirement or risk-based capital requirement, 
 any insured depository institution or 
 depository institution holding company that 
 includes, on a consolidated basis, a permitted 
 payment stablecoin issuer shall not be required 
 to hold, with respect to such permitted payment 
 stablecoin issuer and its assets and 
 operations, any amount of regulatory capital in 
 excess of the capital that such permitted 
 payment stablecoin issuer must maintain under 
 the capital requirements promulgated pursuant 
 to paragraph

    (1)
        (A)
            (i) .
            (iv) Modifications.--Not later than the 
 earlier of the rulemaking deadline under 
 

section 18 or the date the Federal payment 
 stablecoin regulators issue regulations to 
 carry out this section, each appropriate 
 Federal banking agency shall amend or otherwise 
 modify any regulation of the Federal banking 
 agency described in clause
            (iii) so that such 
 regulation, as amended or otherwise modified, 
 complies with clause
            (iii) of this 
 subparagraph.

    (5) Treatment under 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 and economic sanctions compliance 
 program, which shall include appropriate risk 
 assessments, verification of sanctions lists 
 and designation of an officer to supervise the 
 programs;
            (ii) retention of appropriate records of 
 payment stablecoin transactions;
            (iii) monitoring and reporting suspicious 
 activity;
            (iv) policies and procedures to block, 
 freeze, and reject specific or impermissible 
 transactions that violate Federal or State 
 laws, rules, or regulations; and
            (v) 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.
        (B) Rulemaking.--The Financial Crimes Enforcement 
 Network shall adopt rules, tailored to the size and 
 complexity of the permitted payment stablecoin issuer, 
 to implement subparagraph
        (A) .

    (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 digital 
 asset of the foreign person upon issue of the 
 digital asset; and
            (ii) is not required to notify any 
 permitted payment stablecoin issuer of any 
 intended action described in clause
            (i) prior 
 to taking such action.
        (B) Compliance with lawful orders.--
            (i) In general.--
            (I) Permitted payment stablecoin 
 issuers.--A permitted payment 
 stablecoin issuer may issue payment 
 stablecoins only if the issuer has the 
 technological capability to comply and 
 will comply with the terms of any 
 lawful order.
            (II) Foreign payment stablecoins.--
 A foreign payment stablecoin that is 
 not licensed under this Act may not be 
 publicly offered, sold, or otherwise 
 made available for trading in the 
 United States unless the payment 
 stablecoin issuer has the technological 
 capability to comply and complies with 
 the terms of any lawful order.
            (ii) Lawful order defined.--In this 
 paragraph, the term ``lawful order'' means any 
 final and valid writ, process, order, rule, 
 decree, command, or other requirement issued or 
 promulgated under Federal law, issued by a 
 court of competent jurisdiction or by an 
 authorized Federal agency pursuant to its 
 statutory authority, that--
            (I) requires the permitted payment 
 stablecoin issuer to seize, freeze, 
 burn, or prevent the transfer of 
 payment stablecoins issued by the 
 permitted payment stablecoin issuer;
            (II) specifies the digital assets 
 or accounts subject to blocking with 
 reasonable particularity; and
            (III) is subject to judicial or 
 administrative review or appeal as 
 provided by law.
            (C) Report required.--Not later than 1 year after 
 the date of enactment of this Act, the Secretary of the 
 Treasury shall submit to the Committee on Banking, 
 Housing, and Urban Affairs of the Senate and the 
 Committee on Financial Services of the House of 
 Representatives a report on the coordination with 
 permitted payment stablecoin issuers required under 
 subparagraph
        (A) .

    (7) Limitation on payment stablecoin activities.--
        (A) In general.--A permitted payment stablecoin 
 issuer may only--
            (i) issue payment stablecoins;
            (ii) redeem payment stablecoins;
            (iii) manage related reserves, including 
 purchasing, selling, and holding reserve assets 
 or providing custodial services for reserve 
 assets, consistent with State and Federal law;
            (iv) provide custodial or safekeeping 
 services for payment stablecoins, required 
 reserves, or private keys of payment 
 stablecoins, consistent with this Act; and
            (v) undertake other activities that 
 directly support any of the activities 
 described in clauses
            (i) through
            (iv) .
        (B) Rule of construction.--Nothing in subparagraph
        (A) shall prevent a permitted payment stablecoin issuer 
 from engaging in non-payment stablecoin activities that 
 are allowed by the primary Federal payment stablecoin 
 regulator or the State payment stablecoin regulator, as 
 applicable.

    (8) Prohibition on tying.--
        (A) In general.--A permitted payment stablecoin 
 issuer may not provide services to a customer on the 
 condition that the customer obtain an additional paid 
 product or service from the permitted payment 
 stablecoin issuer, or any of its subsidiaries, or agree 
 to not obtain an additional product or service from a 
 competitor.
        (B) Regulations.--The Board may issue such 
 regulations as are necessary to carry out this 
 subparagraph, and, in consultation with the Comptroller 
 and the Corporation, may by regulation or order, permit 
 such exceptions to clause
            (i) as the Board considers 
 will not be contrary to the purpose of this Act.

    (9) Prohibition on the use of deceptive names.--A permitted 
 payment stablecoin issuer may not market a payment stablecoin 
 in such a way that a reasonable person would perceive the 
 payment stablecoin to be--
        (A) legal tender, as described in 

section 5103 of 
 title 31, United States Code;
        (B) issued by the United States; or
            (C) guaranteed or approved by the Government of the 
 United States.

    (10) Regulation by the comptroller.--
        (A) In general.--A Federal qualified nonbank 
 payment stablecoin issuer shall be regulated and 
 supervised exclusively by the Comptroller, which shall 
 have authority, in coordination with other relevant 
 primary Federal payment stablecoin regulators and State 
 payment stablecoin regulators, to issue such 
 regulations and orders as necessary to ensure financial 
 stability and implement this subsection.
        (B) Conforming amendment.--

Section 324

    (b) of the 
 Revised Statutes (12 U.S.C. 1

    (b) ) is amended by adding 
 at the end the following:
 ``

    (3) Regulation of federal qualified nonbank payment 
 stablecoin issuers.--The Comptroller of the Currency shall, in 
 coordination with other relevant regulators and consistent with 
 

section 18 of the Guiding and Establishing National Innovation 
 for U.S. Stablecoins Act of 2025, issue such regulations and 
 orders as necessary to ensure financial stability and implement 
 

section 4

    (a) of that Act.''.

    (11) 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 sections 13

    (a) or 15
            (d) of the Securities and Exchange Act of 
 1934 (15 U.S.C. 78m, 78o
            (d) ), shall prepare, in 
 accordance with generally accepted accounting 
 principles, an annual financial statement, 
 which shall include the disclosure of any 
 related party transactions, as defined by such 
 generally accepted accounting principles.
            (ii) Auditor.--A registered public 
 accounting firm shall perform an audit of the 
 annual financial statements described in clause
            (i) .
            (iii) Standards.--An audit described in 
 clause
            (ii) shall be conducted in accordance 
 with all applicable auditing standards 
 established by the Public Company Accounting 
 Oversight Board, including those relating to 
 auditor independence, internal controls, and 
 related party transactions.
            (iv) Rule of construction.--Nothing in this 
 subparagraph shall be construed to limit, 
 alter, or expand the jurisdiction of the Public 
 Company Accounting Oversight Board over 
 permitted payment stablecoin issuers or 
 registered public accounting firms.
        (B) Public disclosure and submission to federal 
 regulators.--Each permitted payment stablecoin issuer 
 required to prepare an audited annual financial 
 statement under subparagraph
        (A) shall:
            (i) make such audited financial statements 
 publicly available on the website of the 
 permitted payment stablecoin issuer; and
            (ii) submit such audited financial 
 statements annually to their primary Federal 
 payment stablecoin regulator.
            (C) Consultation.--The primary Federal payment 
 stablecoin regulators may consult with the Public 
 Company Accounting Oversight Board to determine best 
 practices for determining audit oversight and to detect 
 fraud, material misstatements, and other financial 
 misrepresentations that could mislead permitted payment 
 stablecoin holders.

    (12) Eligibility.--The requirement to maintain reserves 
 under paragraph

    (1)
        (A) may not be construed as expanding or 
 contracting eligibility to qualify as a depository institution 
 under 

section 19

    (b)

    (1)
        (A) of the Federal Reserve Act (12 U.S.C. 
 461

    (b)

    (1)
        (A) ).

    (b) State-level Regulatory Regimes.--

    (1) Option for state-level regulatory regime.--
 Notwithstanding the Federal regulatory framework established 
 under subsection

    (a) , a State qualified payment stablecoin 
 issuer with a consolidated total outstanding issuance of not 
 more than $10,000,000,000 may opt for regulation under a State-
 level regulatory regime, provided that the State-level 
 regulatory regime is substantially similar to the Federal 
 regulatory framework under that subsection.

    (2) Principles.--The Secretary of the Treasury shall, 
 through notice and comment rulemaking, establish broad based 
 principles for determining whether a State-level regulatory 
 regime is substantially similar to the Federal regulatory 
 framework under subsection

    (a) .

    (3) 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) 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 Secretary of the Treasury an initial 
 certification that the State-level regulatory regime 
 meets the criteria for substantial similarity 
 established pursuant to paragraph

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

    (2) .
            (C) Annual recertification.--Not later than a date 
 to be determined by the Secretary each year, a State 
 payment stablecoin regulator shall submit to the 
 Secretary of the Treasury an additional certification 
 that confirms the accuracy of initial certification 
 submitted under subparagraph
        (A) .

    (5) Not substantially similar.--
        (A) In general.--If a State payment stablecoin 
 regulator determines that the criteria established 
 under paragraph

    (2) are not met and the State payment 
 stablecoin regulator does not submit a certification 
 under paragraph

    (4) , then a permitted payment 
 stablecoin issuer operating under this subsection shall 
 be subject to the Federal regulatory framework as 
 described in subsection
            (c) , notwithstanding the total 
 issuance threshold therein.
        (B) Treasury review.--Not later than 30 days after 
 the date of receipt of a certification under paragraph

    (4) , the Secretary may reject the certification if the 
 Secretary determines that the State-level regulatory 
 regime is not substantially similar to the Federal 
 regulatory framework under subsection

    (a) , and the 
 permitted payment stablecoin issuer shall be subject to 
 the Federal regulatory framework as described in 
 subsection
            (c) , notwithstanding the total issuance 
 threshold therein.
            (C) Appellate review.--A State payment stablecoin 
 regulator may challenge the determination of the 
 Secretary of the Treasury under this paragraph in the 
 United States Court of Appeals for the District of 
 Columbia Circuit.

    (6) List.--The Secretary of the Treasury shall publish and 
 maintain in the Federal Register and on the website of the 
 Department of the Treasury a list of States that have submitted 
 initial certifications and recertifications under paragraph

    (4) .
            (c) Transition to Federal Oversight.--

    (1) Depository institution.--A State chartered depository 
 institution that is a State qualified payment stablecoin issuer 
 with a payment stablecoin with a consolidated total outstanding 
 issuance of more than $10,000,000,000 shall--
        (A) not later than 360 days after the payment 
 stablecoin reaches such threshold, transition to the 
 Federal regulatory framework of the primary Federal 
 payment stablecoin regulator of the State chartered 
 depository institution, which shall be administered by 
 the State payment stablecoin regulator of the State 
 chartered depository institution and the primary 
 Federal payment stablecoin regulator acting jointly; or
        (B) beginning on the date the payment stablecoin 
 reaches such threshold, cease issuing new payment 
 stablecoins until the payment stablecoin is under the 
 $10,000,000,000 consolidated total outstanding issuance 
 threshold.

    (2) Other institutions.--A State qualified payment 
 stablecoin issuer not described in paragraph

    (1) with a payment 
 stablecoin with a consolidated total outstanding issuance of 
 more than $10,000,000,000 shall--
        (A) not later than 360 days after the payment 
 stablecoin reaches such threshold, transition to the 
 Federal regulatory framework under subsection

    (a) administered by the State payment stablecoin regulator 
 of the State qualified payment stablecoin issuer; or
        (B) beginning on the date the payment stablecoin 
 reaches such threshold, cease issuing new payment 
 stablecoins until the payment stablecoin is under the 
 $10,000,000,000 consolidated total outstanding issuance 
 threshold.

    (3) Waiver.--
        (A) In general.--Notwithstanding paragraphs

    (1) and

    (2) , the applicable primary Federal payment stablecoin 
 regulator may permit a State qualified payment 
 stablecoin issuer with a payment stablecoin with a 
 consolidated total outstanding issuance of more than 
 $10,000,000,000 to remain solely supervised by a State 
 payment stablecoin regulator.
        (B) Criteria for waiver.--The primary Federal 
 payment stablecoin regulator shall consider the 
 following exclusive criteria in determining whether to 
 issue a waiver under this paragraph:
            (i) The capital maintained by the State 
 qualified payment stablecoin issuer.
            (ii) The past operations and examination 
 history of the State qualified payment 
 stablecoin issuer.
            (iii) The experience of the State payment 
 stablecoin regulator in supervising payment 
 stablecoin and digital asset activities.
            (iv) The laws and rules applicable to, and 
 the supervisory framework of, the State 
 qualified payment stablecoin issuer with 
 respect to payment stablecoins and digital 
 assets.
            (C) Rule of construction.--A State qualified 
 payment stablecoin issuer subject to Federal oversight 
 under paragraph

    (1) or

    (2) of this subsection that does 
 not receive a waiver under this paragraph shall 
 continue to be supervised by the State payment 
 stablecoin regulator of the State qualified payment 
 stablecoin issuer along jointly with the primary 
 Federal payment stablecoin regulator. Nothing in this 
 subsection shall require the State qualified payment 
 stablecoin issuer to convert to a Federal charter.
            (d) Misrepresentation of Insured Status; Marketing.--

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

    (2) Misrepresentation of insured status.--
        (A) In general.--It shall be unlawful to represent 
 that payment stablecoins are backed by the full faith 
 and credit of the United States, guaranteed by the 
 United States Government, or subject to Federal deposit 
 insurance or Federal share insurance.
        (B) Penalty.--A violation of subparagraph
        (A) shall 
 be considered a violation of 

section 18

    (a)

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

    (a)

    (4) ) or 
 

section 709 of title 18, United States Code, as 
 applicable.

    (3) Marketing.--It shall be unlawful to market a digital 
 asset in the United States as a payment stablecoin unless the 
 digital asset is issued pursuant to this Act.

    (e) Officers or Directors Convicted of Certain Felonies.--

    (1) In general.--No individual who has been convicted of a 
 felony offense involving insider trading, embezzlement, 
 cybercrime, money laundering, financing of terrorism, or 
 financial fraud may serve as--
        (A) an officer of a payment stablecoin issuer; or
        (B) a director of a payment stablecoin issuer.

    (2) Penalty.--
        (A) In general.--Whoever knowingly participates in 
 a violation of paragraph

    (1) or subsection
            (d) (3) shall 
 be fined not more than $1,000,000 for each such 
 violation, imprisoned for not more than 5 years; or 
 both.
        (B) Referral to attorney general.--If a Federal 
 payment stablecoin regulator has reason to believe that 
 any person has knowingly violated paragraph

    (1) or 
 subsection
            (d) (3) , the Federal payment stablecoin 
 regulator shall refer the matter to the Attorney 
 General.

    (f) Rulemaking.--

    (1) In general.--Consistent with 

section 18, the primary 
 Federal payment stablecoin regulators and State payment 
 stablecoin regulators shall issue such regulations as may be 
 necessary to establish a payment stablecoin regulatory 
 framework necessary to administer and carry out the 
 requirements of this section, including to establish 
 conditions, and to prevent evasions thereof.

    (2) Joint issuance of regulation.--All regulations issued 
 to carry out this section shall be issued jointly by the 
 primary Federal payment stablecoin regulators, if not issued by 
 a State payment stablecoin regulator.

SEC. 5. APPROVAL OF SUBSIDIARIES OF INSURED DEPOSITORY INSTITUTIONS AND 
 FEDERAL QUALIFIED NONBANK PAYMENT STABLECOIN ISSUERS.

    (a) Application.--

    (1) In general.--Each primary Federal payment stablecoin 
 regulator shall receive, review, and consider for approval 
 applications from any insured depository institution that seeks 
 to issue payment stablecoins through a subsidiary and any 
 nonbank entity that seeks to issue payment stablecoins as a 
 Federal qualified nonbank payment stablecoin issuer. Each 
 primary Federal payment stablecoin regulator shall establish a 
 process and framework for the licensing, regulation, 
 examination, and supervision of such entities that prioritizes 
 the safety and soundness of such entities.

    (2) Authority to issue regulations and process 
 applications.--The primary Federal payment stablecoin 
 regulators shall, before the date described in 

section 18--
        (A) issue regulations consistent with that section 
 to carry out this section; and
        (B) pursuant to the regulations described in 
 subparagraph
        (A) , accept and process applications under 
 this Act.

    (3) Mandatory approval process.--The primary Federal 
 payment stablecoin regulator shall, upon receipt of a 
 substantially complete application, evaluate and make a 
 determination on each application based on the criteria 
 established under this Act.

    (b) Evaluation of Applications.--A substantially complete 
application received under subsection

    (a) shall be evaluated by the 
primary Federal payment stablecoin regulator using the factors 
described in subsection
            (c) .
            (c) Factors to Be Considered.--The factors described in this 
subsection are the following:

    (1) The ability of the applicant (or, in the case of an 
 applicant that is an insured depository institution, the 
 subsidiary of the applicant), based on financial condition and 
 resources, to meet the requirements set forth under 

section 4.

    (2) Whether an individual who has been convicted of a 
 felony offense involving insider trading, embezzlement, 
 cybercrime, money laundering, financing of terrorism, or 
 financial fraud is serving as an officer or director of the 
 applicant.

    (3) Any other factors established by the primary Federal 
 payment stablecoin regulator that are necessary to ensure the 
 safety and soundness of the permitted payment stablecoin 
 issuer.

    (4) The competence, experience, and integrity of the 
 officers, directors, and principal shareholders of the 
 applicant, its subsidiaries, and parent company, including--
        (A) the record of those officers, directors, and 
 principal shareholders of compliance with laws and 
 regulations; and
        (B) the ability of those officers, directors, and 
 principal shareholders to fulfill any commitments to, 
 and any conditions imposed by, their primary Federal 
 payment stablecoin regulator in connection with the 
 application at issue and any prior applications.
            (d) Timing for Decision; Grounds for Denial.--

    (1) Timing for decisions on applications.--
        (A) In general.--Not later than 120 days after 
 receiving a substantially complete application under 
 subsection

    (a) , a primary Federal payment stablecoin 
 regulator shall render a decision on the application.
        (B) Substantially complete.--
            (i) In general.--For purposes of 
 subparagraph
        (A) , an application shall be 
 considered substantially complete if the 
 application contains sufficient information for 
 the primary Federal payment stablecoin 
 regulator to render a decision on whether the 
 applicant satisfies the criteria under 
 subsection
            (c) .
            (ii) Notification.--Not later than 30 days 
 after receiving an application under subsection

    (a) , a primary Federal payment stablecoin 
 regulator shall notify the applicant whether 
 the primary Federal payment stablecoin 
 regulator considers the application to be 
 substantially complete and, if the application 
 is not substantially complete, the additional 
 information the applicant must provide in order 
 for the application to be considered 
 substantially complete.
            (iii) Material change in circumstances.--An 
 application considered substantially complete 
 under this subparagraph remains substantially 
 complete unless there is a material change in 
 circumstances that requires the primary Federal 
 payment stablecoin regulator to treat the 
 application as a new application.

    (2) Denial of application.--
        (A) Grounds for denial.--
            (i) In general.--The primary Federal 
 payment stablecoin regulator shall only deny a 
 complete application received under subsection

    (a) if the regulator determines that the 
 activities of the applicant would be unsafe or 
 unsound based on the factors described in 
 subsection
            (c) .
            (ii) Issuance not ground for denial.--The 
 issuance of a payment stablecoin on an open, 
 public, or decentralized network shall not be a 
 valid ground for denial of an application.
        (B) Explanation required.--If the primary Federal 
 payment stablecoin regulator denies a complete 
 application received under subsection

    (a) , not later 
 than 30 days after the date of such denial, the 
 regulator shall provide the applicant with written 
 notice explaining the denial with specificity, 
 including all findings made by the regulator with 
 respect to all identified material shortcomings in the 
 application, including actionable recommendations on 
 how the applicant could address the identified material 
 shortcomings.
            (C) Opportunity for hearing; final determination.--
            (i) In general.--Not later than 30 days 
 after the date of receipt of any notice of the 
 denial of an application under this section, 
 the applicant may request, in writing, an 
 opportunity for a written or oral hearing 
 before the primary Federal payment stablecoin 
 regulator to appeal the denial.
            (ii) Timing.--Upon receipt of a timely 
 request, the primary Federal payment stablecoin 
 regulator shall notice a time (not later than 
 30 days after the date of receipt of the 
 request) and place at which the applicant may 
 appear, personally or through counsel, to 
 submit written materials or provide oral 
 testimony and oral argument).
            (iii) Final determination.--Not later than 
 60 days after the date of a hearing under this 
 subparagraph, the primary Federal payment 
 stablecoin regulator shall notify the applicant 
 of a final determination, which shall contain a 
 statement of the basis for that determination, 
 with specific findings.
            (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 request a 
 hearing under this subparagraph, in writing, 
 that the denial of the application is a final 
 determination of the primary Federal payment 
 stablecoin regulator.

    (3) Failure to render a decision.--If the primary Federal 
 payment stablecoin regulator fails to render a decision on a 
 complete application within the time period specified in 
 paragraph

    (1) , the application shall be deemed approved.

    (4) Right to reapply.--The denial of an application under 
 this section shall not prohibit the applicant from filing a 
 subsequent application.

    (e) Report on Pending Applications.--The primary Federal payment 
stablecoin regulators shall annually report to Congress on the 
applications under subsection

    (a) that have been pending for 180 days 
or more since the date the initial application was filed and for which 
the applicant has been informed that the application remains 
incomplete, including documentation on the status of such applications 
and why such applications have not yet been approved.

    (f) Rulemaking.--Consistent with 

section 18, the primary Federal 
payment stablecoin regulators shall issue rules necessary for the 
regulation of the issuance of payment stablecoins, but may not impose 
requirements in addition to the requirements specified under 

section 4.

SEC. 6. SUPERVISION AND ENFORCEMENT WITH RESPECT TO SUBSIDIARIES OF 
 INSURED DEPOSITORY INSTITUTIONS AND COMPTROLLER-REGULATED 
 ENTITIES.

    (a) Supervision.--

    (1) In general.--Each permitted payment stablecoin issuer 
 that is not a State qualified payment stablecoin issuer with a 
 payment stablecoin with a consolidated total outstanding 
 issuance of less than $10,000,000,000 shall be subject to 
 supervision by the appropriate primary Federal payment 
 stablecoin regulator.

    (2) Submission of reports.--Each permitted payment 
 stablecoin issuer described in paragraph

    (1) shall, upon 
 request, submit to its primary Federal payment stablecoin 
 regulator a report on--
        (A) the financial condition of the permitted 
 payment stablecoin issuer;
        (B) the systems of the permitted payment stablecoin 
 issuer for monitoring and controlling financial and 
 operating risks; and
            (C) compliance by the permitted payment stablecoin 
 issuer (and any subsidiary thereof) with this Act.

    (3) Examinations.--The primary Federal payment stablecoin 
 regulator shall examine a permitted payment stablecoin issuer 
 described in paragraph

    (1) in order to assess--
        (A) the nature of the operations and financial 
 condition of the permitted payment stablecoin issuer;
        (B) the financial, operational, technological, and 
 other risks within the permitted payment stablecoin 
 issuer that may pose a threat to--
            (i) the safety and soundness of the 
 permitted payment stablecoin issuer; or
            (ii) the stability of the financial system 
 of the United States; and
            (C) the systems of the permitted payment stablecoin 
 issuer for monitoring and controlling the risks 
 described in subparagraph
        (B) .

    (4) Requirements for efficiency.--
        (A) Use of existing reports.--In supervising and 
 examining a permitted payment stablecoin issuer under 
 this subsection, the primary Federal payment stablecoin 
 regulator shall, to the fullest extent possible, use 
 existing reports and other supervisory information.
        (B) Avoidance of duplication.--A primary Federal 
 payment stablecoin regulator shall, to the fullest 
 extent possible, avoid duplication of examination 
 activities, reporting requirements, and requests for 
 information in carrying out this subsection with 
 respect to a permitted payment stablecoin issuer.
            (C) Consideration of burden.--A primary Federal 
 payment stablecoin regulator shall, with respect to any 
 examination or request for the submission of a report 
 under this subsection, only request examinations and 
 reports at a cadence and in a format that is similar to 
 those required for similarly situated entities 
 regulated by the primary Federal payment stablecoin 
 regulator.

    (b) 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 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--
        (A) is recklessly violating or has recklessly 
 violated this Act or any regulation or order issued 
 under this Act; or
        (B) is recklessly violating or has recklessly 
 violated any condition imposed in writing by the 
 primary Federal payment stablecoin regulator in 
 connection with a written agreement entered into 
 between the permitted payment stablecoin issuer and the 
 primary Federal payment stablecoin regulator.

    (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 
 has reasonable cause to believe that the permitted payment 
 stablecoin issuer or any institution-affiliated party of the 
 permitted payment stablecoin issuer is violating, has violated, 
 or is attempting to violate this Act, any regulation or order 
 issued under this Act, or any written agreement entered into 
 with the primary Federal payment stablecoin regulator or 
 condition imposed in writing by the primary Federal payment 
 stablecoin regulator in connection with any application or 
 other request, the primary Federal payment stablecoin regulator 
 may, by provisions that are mandatory or otherwise, order the 
 permitted payment stablecoin issuer or institution-affiliated 
 party of the permitted payment stablecoin issuer to--
        (A) cease and desist from such violation or 
 practice; or
        (B) take affirmative action to correct the 
 conditions resulting from any such violation or 
 practice.

    (3) Removal and prohibition authority.--The primary Federal 
 payment stablecoin regulator of a permitted payment stablecoin 
 issuer that is not a State qualified payment stablecoin issuer 
 may remove an institution-affiliated party of the permitted 
 payment stablecoin issuer from their position or office or 
 prohibit further participation in the affairs of the permitted 
 payment stablecoin issuer or all such permitted payment 
 stablecoin issuers by such institution-affiliated party, if the 
 primary Federal payment stablecoin regulator determines that--
        (A) the institution-affiliated party has knowingly 
 committed a violation or attempted violation of this 
 Act or any regulation or order issued under this Act; 
 or
        (B) the institution-affiliated party has knowingly 
 committed a violation of any provision of subchapter II 
 of chapter 53 of title 31, United States Code.

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

    (1) ,

    (2) , or

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

    (b) and

    (e) of sections 8 of the Federal Deposit Insurance 
 Act (12 U.S.C. 1818).
        (B) Judicial review.--A person aggrieved by a final 
 action under this subsection may obtain judicial review 
 of such action exclusively as provided in 

section 8

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

    (h) ).
            (C) Injunction.--The primary Federal payment 
 stablecoin regulator may, in the discretion of the 
 regulator, follow the procedures provided in 

section 8
            (i) (1) of the Federal Deposit Insurance Act (12 U.S.C. 
 1818
            (i) (1) ) for judicial enforcement of any effective 
 and outstanding notice or order issued under this 
 subsection.
            (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 in 

section 8
            (c) of the Federal Deposit 
 Insurance Act (12 U.S.C. 1818
            (c) ) to issue a temporary 
 cease-and-desist order.

    (5) Civil money penalties.--
        (A) Failure to be approved.--Any person who issues 
 a United States dollar-denominated payment stablecoin 
 in violation of 

section 3, and any institution-
 affiliated party of such a person who knowingly 
 participates in issuing such a payment stablecoin, 
 shall be liable for a civil penalty of not more than 
 $100,000 for each day during which such payment 
 stablecoins are issued.
        (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 in 

section 8
            (i) (2) of the Federal 
 Deposit Insurance Act (12 U.S.C. 1818
            (i) (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.--Notwithstanding anything in this subsection 
 to the contrary, this subsection shall not apply to a State 
 qualified payment stablecoin issuer.

SEC. 7. STATE QUALIFIED PAYMENT STABLECOIN ISSUERS.

    (a) In General.--A State payment stablecoin regulator shall have 
supervisory, examination, and enforcement authority over all State 
qualified payment stablecoin issuers of such State.

    (b) Authority To Enter Into Agreements With the Board.--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) Sharing of Information.--A State payment stablecoin regulator 
and the Board shall share information on an ongoing basis with respect 
to a State qualified payment stablecoin issuer of such State, including 
a copy of the initial application and any accompanying documents.
            (d) Rulemaking.--A State payment stablecoin regulator may issue 
orders and rules under 

section 4 applicable to State qualified payment 
stablecoin issuers to the same extent as the primary Federal payment 
stablecoin regulators issue orders and rules under 

section 4 applicable 
to permitted payment stablecoin issuers that are not a State qualified 
payment stablecoin issuers.

    (e) Enforcement Authority in Unusual and Exigent Circumstances.--

    (1) Board.--
        (A) In general.--Subject to subparagraph
            (C) , under 
 unusual and exigent circumstances that the Board 
 determines to exist, the Board may, after not less than 
 48 hours prior written notice to the applicable State 
 payment stablecoin regulator, take an enforcement 
 action against a State qualified payment stablecoin 
 issuer or an institution-affiliated party of such 
 issuer for violations of this Act during such unusual 
 and exigent circumstances.
        (B) Rulemaking.--Consistent with 

section 18, the 
 Board shall issue rules to set forth the unusual and 
 exigent circumstances in which the Board may act under 
 this paragraph.
            (C) Limitations.--If, after unusual and exigent 
 circumstances are determined to exist pursuant to 
 subparagraph
        (A) , the Board determines that there is 
 reasonable cause to believe that the continuation by a 
 State qualified payment stablecoin issuer of any 
 activity constitutes a serious risk to the financial 
 safety, soundness, or stability of the State qualified 
 payment stablecoin issuer, the Board may impose such 
 restrictions as the Board determines to be necessary to 
 address such risk during such usual and exigent 
 circumstances. Such restrictions shall be issued in the 
 form of a directive, with the effect of a cease and 
 desist order that has become final, to the State 
 qualified payment stablecoin issuer and any of its 
 affiliates, limiting--
            (i) the payment of dividends by the State 
 qualified payment stablecoin issuer;
            (ii) transactions between the State 
 qualified payment stablecoin issuer, a holding 
 company, and the subsidiaries or affiliates of 
 either the State qualified payment stablecoin 
 issuer or the holding company; and
            (iii) any activities of the State qualified 
 payment stablecoin issuer that might create a 
 serious risk that the liabilities of a holding 
 company and the affiliates of the holding 
 company may be imposed on the State qualified 
 payment stablecoin issuer.
            (D) Review of directive.--
            (i) Administrative review.--
            (I) In general.--After a directive 
 described in subparagraph
            (C) is 
 issued, the State qualified payment 
 stablecoin issuer, or any institution-
 affiliated party of the State qualified 
 payment stablecoin issuer subject to 
 the directive, may object and present 
 to the Board, in writing, the reasons 
 why the directive should be modified or 
 rescinded.
            (II) Automatic lapse of 
 directive.--If, after 10 days after the 
 receipt of a response described in 
 subclause
            (I) , the Board does not 
 affirm, modify, or rescind the 
 directive, the directive shall 
 automatically lapse.
            (ii) Judicial review.--
            (I) In general.--If the Board 
 affirms or modifies a directive 
 pursuant to clause
            (i) , any affected 
 party may immediately thereafter 
 petition the United States district 
 court for the district in which the 
 main office of the affected party is 
 located or in the United States 
 District Court for the District of 
 Columbia to stay, modify, terminate, or 
 set aside the directive.
            (II) Relief for extraordinary 
 cause.--Upon a showing of extraordinary 
 cause, an affected party may petition 
 for relief under subclause
            (I) without 
 first pursuing or exhausting the 
 administrative remedies under clause
            (i) .

    (2) Comptroller.--
        (A) In general.--Subject to subparagraph
            (C) , under 
 unusual and exigent circumstances determined to exist 
 by the Comptroller, the Comptroller shall, after not 
 less than 48 hours prior written notice to the 
 applicable State payment stablecoin regulator, take an 
 enforcement action against a State qualified payment 
 stablecoin issuer that is a nonbank entity for 
 violations of this Act.
        (B) Rulemaking.--Consistent with 

section 18, the 
 Comptroller shall issue rules to set forth the unusual 
 and exigent circumstances in which the Comptroller may 
 act under this paragraph.
            (C) Limitations.--If, after unusual and exigent 
 circumstances are determined to exist under 
 subparagraph
        (A) , the Comptroller determines that there 
 is reasonable cause to believe that the continuation by 
 a State qualified payment stablecoin issuer that is a 
 nonbank entity of any activity constitutes a serious 
 risk to the financial safety, soundness, or stability 
 of the State qualified payment stablecoin issuer that 
 is a nonbank entity, the Comptroller shall impose such 
 restrictions as the Comptroller determines to be 
 necessary to address such risk during such unusual and 
 exigent circumstances. Such restrictions shall be 
 issued in the form of a directive, with the effect of a 
 cease and desist order that has become final, to the 
 State qualified payment stablecoin issuer that is a 
 nonbank entity and any of its affiliates, limiting--
            (i) the payment of dividends by the State 
 qualified payment stablecoin issuer;
            (ii) transactions between the State 
 qualified payment stablecoin issuer, a holding 
 company, and the subsidiaries or affiliates of 
 either the State qualified payment stablecoin 
 issuer or the holding company; and
            (iii) any activities of the State qualified 
 payment stablecoin issuer that might create a 
 serious risk that the liabilities of a holding 
 company and the affiliates of the holding 
 company may be imposed on the State qualified 
 payment stablecoin issuer.
            (D) Review of directive.--
            (i) Administrative review.--
            (I) In general.--After a directive 
 described in subparagraph
            (C) is 
 issued, the Comptroller-regulated 
 entity, or any institution-affiliated 
 party of the Comptroller-regulated 
 entity subject to the directive, may 
 object and present to the Comptroller, 
 in writing, the reasons why the 
 directive should be modified or 
 rescinded.
            (II) Automatic lapse of 
 directive.--If, after 10 days after the 
 receipt of a response described in 
 subclause
            (I) , the Comptroller does not 
 affirm, modify, or rescind the 
 directive, the directive shall 
 automatically lapse.
            (ii) Judicial review.--
            (I) In general.--If the Comptroller 
 affirms or modifies a directive 
 pursuant to clause
            (i) , any affected 
 party may immediately thereafter 
 petition the United States district 
 court for the district in which the 
 main office of the affected party is 
 located or in the United States 
 District Court for the District of 
 Columbia to stay, modify, terminate, or 
 set aside the directive.
            (II) Relief for extraordinary 
 cause.--Upon a showing of extraordinary 
 cause, an affected party may petition 
 for relief under subclause
            (I) without 
 first pursuing or exhausting the 
 administrative remedies under clause
            (i) .

    (f) Effect on State Law.--

    (1) Host state law.--The laws of a host State, including 
 generally applicable laws relating to consumer protection, 
 shall only apply to the activities conducted in the host State 
 by an out-of-State State qualified payment stablecoin issuer to 
 the same extent as such laws apply to the activities conducted 
 in the host State by an out-of-State Federal qualified nonbank 
 payment stablecoin issuer.

    (2) Home state law.--If any host State law is determined 
 not to apply under paragraph

    (1) , the laws of the home State of 
 the State qualified payment stablecoin issuer shall govern the 
 activities of the permitted payment stablecoin issuer conducted 
 in the host State.

    (3) Applicability.--The laws applicable under paragraph

    (1) exclude host State laws governing the chartering, licensure, or 
 other authorization to do business in the host State as a 
 permitted payment stablecoin issuer pursuant to this Act.

SEC. 8. ANTI-MONEY LAUNDERING PROTECTIONS.

    (a) 

=== Definitions. ===
-In this subsection:

    (1) Digital asset service provider.--The term ``digital 
 asset service provider''--
        (A) means a person that, for compensation or 
 profit, engages in the business in the United States or 
 for customers or users in the United States, of--
            (i) exchanging digital assets for monetary 
 value;
            (ii) exchanging digital assets for other 
 digital assets;
            (iii) transferring digital assets to a 
 third party;
            (iv) acting as a digital asset custodian; 
 or
            (v) participating in financial services 
 related to a digital asset issuance; and
        (B) does not include--
            (i) a distributed ledger protocol or a 
 person solely developing such a protocol; or
            (ii) a person solely validating 
 transactions or operating a distributed ledger 
 node.

    (2) Offering.--The term ``offering'' means making available 
 for purchase, sale, or exchange.

    (3) Distributed ledger protocol.--The term ``distributed 
 ledger protocol'' means publicly available and accessible 
 executable software deployed to a distributed ledger, including 
 smart contracts or networks of smart contracts.

    (4) Lawful order.--The term ``lawful order'' means any 
 final and valid writ, process, order, rule, decree, command, or 
 other requirement issued or promulgated under Federal law, 
 issued by a court of competent jurisdiction or by an authorized 
 Federal agency pursuant to its statutory authority, that--
        (A) requires a permitted payment stablecoin issuer 
 to seize, freeze, burn, or prevent the transfer of 
 payment stablecoins issued by the permitted payment 
 stablecoin issuer;
        (B) specifies the digital assets or accounts 
 subject to blocking with reasonable particularity; and
            (C) is subject to judicial or administrative review 
 or appeal as provided by law.

    (b) Treasury Authority to Designate Noncompliant Issuers.--Not 
later than 30 days after the Department of the Treasury has, pursuant 
to 

section 4

    (a)

    (6)
        (B)
            (i) 
            (II) , identified the failure of a foreign 
issuer of any payment stablecoins trading in the United States that is 
not a permitted payment stablecoin issuer to comply with the terms of 
any lawful order, the Secretary of the Treasury, in coordination with 
relevant Federal agencies, shall designate the foreign issuer as 
noncompliant and notify the foreign issuer in writing of the 
designation.
            (c) Publication of Designation; Prohibition on Secondary Trading.--

    (1) In general.--If a foreign issuer described in 
 subsection

    (b) does not come into compliance with the lawful 
 order within 30 days from the date of issuance of the written 
 notice described in that subsection, 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 issuer to comply with the lawful 
 order after the written notice; and
        (B) issue a notification in the Federal Register 
 prohibiting digital asset service providers from 
 facilitating secondary trading of payment stablecoins 
 issued by the foreign issuer in the United States.

    (2) Effective date of prohibition.--The prohibition on 
 facilitation of secondary trading described in paragraph

    (1) shall become effective on the date that is 30 days after the 
 date of issue of notification of the prohibition in the Federal 
 Register.

    (3) Waivers and extensions.--With respect to the 
 prohibition on facilitation of secondary trading described in 
 paragraph

    (1) , the Secretary of the Treasury may issue waivers 
 and time extensions to digital asset service providers on a 
 case by case basis.

    (4) Civil monetary penalties.--
        (A) Digital asset service providers.--Any digital 
 asset service provider that knowingly violates a 
 prohibition under paragraph

    (1)
        (B) shall be subject to 
 a civil monetary penalty of not more than $100,000 per 
 violation per day.
        (B) Foreign payment stablecoin issuers.--Any 
 foreign issuer of payment stablecoin that knowingly 
 continues to publicly offer a payment stablecoin in the 
 United States after publication of the determination of 
 noncompliance under paragraph

    (1)
        (A) shall be subject 
 to a civil monetary penalty of not more than $1,000,000 
 per violation per day, and the Secretary of the 
 Treasury may seek an injunction in a United States 
 District Court to bar the foreign issuer from engaging 
 in financial transactions in the United States or with 
 United States persons.
            (d) Appeal.--A determination of noncompliance under subsection

    (b) is subject to judicial review in the United States Court of Appeals for 
the District of Columbia Circuit.

    (e) Waiver, Licensing Authority, and Exceptions.--

    (1) In general.--The Secretary of the Treasury may offer a 
 waiver, general license, or specific license to any United 
 States persons engaging in secondary trading described in 
 subsection
            (c) on a case by case basis if the Secretary 
 determines that--
        (A) prohibiting secondary trading would adversely 
 affect the financial system of the United States; or
        (B) the foreign issuer of the payment stablecoin is 
 taking tangible steps to remedy the failure to comply 
 with the lawful order that resulted in the 
 noncompliance determination under subsection

    (b) .

    (2) National security waiver.--The President may waive the 
 application of the secondary trading restrictions under 
 subsection
            (c) if the President determines that the waiver is 
 in the national security interest of the United States.

    (3) Exceptions for intelligence and law enforcement 
 activities.--This Act shall not apply with respect to--
        (A) activities subject to the reporting 
 requirements under title V of the National Security Act 
 of 1947 (50 U.S.C. 3091 et seq.) or any authorized 
 intelligence activities of the United States; or
        (B) activities necessary to carry out or assist law 
 enforcement activity of the United States.

    (4) Report required.--Not later than 7 days after issuing a 
 waiver or a license under paragraph

    (1) , the Secretary of the 
 Treasury shall submit a report to the Chairmen and Ranking 
 members of the Committee on Banking, Housing, and Urban Affairs 
 of the Senate and the Committee on Financial Services of the 
 House of Representatives, including the text of the waiver or 
 license, as well as the facts and circumstances justifying the 
 waiver determination, and provide a briefing on the report.

SEC. 9. CUSTODY OF PAYMENT STABLECOIN RESERVE AND COLLATERAL.

    (a) In General.--A person may only engage in the business of 
providing custodial or safekeeping services for the payment stablecoin 
reserve, the payment stablecoins used as collateral, or the private 
keys of permitted payment stablecoins if the person--

    (1) is subject to--
        (A) supervision or regulation by a primary Federal 
 payment stablecoin regulator or a primary financial 
 regulatory agency described under subparagraph
        (B) or
            (C) of 

section 2

    (12) of the Dodd-Frank Wall Street 
 Reform and Consumer Protection Act (12 U.S.C. 
 5301

    (12) ); or
        (B) supervision by a State bank supervisor, as 
 defined under 

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

section 6003 of the Anti-
 Money Laundering Act of 2020, 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 requirements under subsection

    (b) , 
 unless such person complies with similar requirements as 
 required by a primary Federal payment stablecoin regulator, the 
 Securities and Exchange Commission, or the Commodity Futures 
 Trading Commission.

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

    (a) shall--

    (1) treat and deal with the payment stablecoins, private 
 keys, cash, and other property of a person for whom or on whose 
 behalf the person 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 is not 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 be segregated from 
 and not be commingled with the funds of the person.

    (2) Exception.--Notwithstanding paragraph

    (1) --
        (A) the payment stablecoins, cash, and other 
 property of a customer may, for convenience, be 
 commingled and deposited in an omnibus account holding 
 the payment stablecoins, cash, and other property of 
 more than 1 customer at a State chartered depository 
 institution, an insured depository institution, 
 national bank, or trust company;
        (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) ; or
            (C) in accordance with such terms and conditions as 
 a primary Federal payment stablecoin regulator 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 primary Federal payment stablecoin regulator to be 
 separately accounted for, treated, and dealt with as 
 belonging to customers.

    (3) Customer priority.--With or without the segregation 
 required under paragraph

    (1) , the claims of a customer with 
 respect to the property described in that paragraph shall have 
 priority over the claims of any person other than a customer 
 against a person described in subparagraph

    (a) unless the 
 customer expressly consents to such other priority of claim.
            (d) Regulatory Information.--A person described under subsection

    (a) shall submit to the applicable primary Federal payment stablecoin 
regulator information concerning the person's business operations and 
processes to protect customer assets, in such form and manner as the 
primary regulator shall determine.

    (e) Exclusion.--The requirements of this section shall not apply to 
any person solely on the basis that such person engages in the business 
of providing hardware or software to facilitate a customer's own 
custody or safekeeping of the customer's payment stablecoins or private 
keys.

SEC. 10. TREATMENT OF PAYMENT STABLECOIN ISSUERS IN INSOLVENCY 
 PROCEEDINGS.

    (a) In General.--In any insolvency proceeding of a permitted 
payment stablecoin issuer under Federal or State law, including any 
proceeding under title 11, United States Code, and any insolvency 
proceeding administered by a State payment stablecoin regulator with 
respect to a permitted payment stablecoin issuer, the claim of a person 
holding payment stablecoins issued by the permitted payment stablecoin 
issuer shall have priority over the claims of the permitted payment 
stablecoin issuer and any other creditor of the permitted payment 
stablecoin issuer, with respect to required payment stablecoin 
reserves, subject to 

section 507

    (e) of title 11, United States Code.

    (b) 

=== Definitions. ===
-

Section 101 of title 11, United States Code, is 
amended by adding after paragraph

    (40B) the following:
 ``

    (40C) The terms `payment stablecoin' and `permitted 
 payment stablecoin issuer' have the meanings given those terms 
 in 

section 2 of the Guiding and Establishing National 
 Innovation for U.S. Stablecoins Act of 2025.''.
            (c) Automatic Stay.--

Section 362 of title 11, United States Code is 
amended--

    (1) in subsection

    (a) --
        (A) in paragraph

    (7) , by striking ``and'';
        (B) in paragraph

    (8) , by striking the period and 
 inserting ``; and''; and
            (C) by adding at the end the following:
 ``

    (9) the redemption of payment stablecoins issued by the 
 debtor, from payment stablecoin reserves required to be 
 maintained under 

section 4 of the Guiding and Establishing 
 National Innovation for U.S. Stablecoins Act of 2025.''; and

    (2) in subsection
            (d) --
        (A) in paragraph

    (3)
        (B)
            (ii) , by striking ``or'' at 
 the end;
        (B) in paragraph

    (4)
        (B) , by striking the period at 
 the end and inserting ``; or''; and
            (C) by inserting after paragraph

    (4) the following:
 ``

    (5) with respect to the redemption of payment stablecoins 
 held by a person, if the court finds, subject to the motion and 
 attestation of the debtor on the petition date, there are 
 payment stablecoin reserves available for distribution on a 
 ratable basis to similarly situated payment stablecoin holders, 
 provided that the court shall use best efforts to enter a final 
 order to begin distributions under this paragraph not later 
 than 14 days after the date of the required hearing.''.
            (d) Priority in Bankruptcy Proceedings.--

Section 507 of title 11, 
United States Code, is amended--

    (1) in subsection

    (a) , by striking ``The following'' and 
 inserting ``Subject to subsection

    (e) , the following''; and

    (2) by adding at the end the following:
 ``

    (e) 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 debtor, any 
remaining claim of a person holding a payment stablecoin issued by the 
debtor 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 Guiding and Establishing 
National Innovation for U.S. Stablecoins Act of 2025 would have 
required additional reserves to be maintained by the debtor for payment 
stablecoin holders.''.

    (e) Payment Stablecoin Reserves.--

Section 541

    (b) of title 11, 
United States Code, is amended--

    (1) in paragraph

    (9) , in the flush text following 
 subparagraph
        (B) , by striking ``or'' at the end;

    (2) in paragraph

    (10)
            (C) , by striking the period and 
 inserting ``; or''; and

    (3) by inserting after paragraph

    (10) the following:
 ``

    (11) required payment stablecoin reserves under 

section 4 
 of the Guiding and Establishing National Innovation for U.S. 
 Stablecoins Act of 2025.''.

    (f) Intervention.--

Section 1109 of title 11, United States Code, is 
amended by adding at the end the following:
 ``
            (c) The Comptroller of the Currency or State payment stablecoin 
regulator (as defined in 

section 2 of the Guiding and Establishing 
National Innovation for U.S. Stablecoins Act of 2025) shall raise and 
shall appear and be heard on any issue, including the protection of 
customers, in a case under this chapter in which the debtor is a 
permitted payment stablecoin issuer.''.

    (g) Application of Existing Insolvency Law.--In accordance with 
otherwise applicable law, an insolvency proceeding with respect to a 
permitted payment stablecoin issuer shall occur as follows:

    (1) A depository institution (as defined in 

section 3 of 
 the Federal Deposit Insurance Act (12 U.S.C. 1813)) shall be 
 resolved by the Federal Deposit Insurance Corporation, National 
 Credit Union Administration, or State payment stablecoin 
 regulator, as applicable.

    (2) A subsidiary of a depository institution (as defined in 
 

section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
 1813)) or a nonbank entity may be considered a debtor under 
 title 11, United States Code.

SEC. 11. INTEROPERABILITY STANDARDS.

 The 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 and in a manner consistent with the National Technology 
Transfer and Advancement Act of 1995 (Public Law 104-113), prescribe 
standards for permitted payment stablecoin issuers to promote 
compatibility and interoperability with--

    (1) other permitted payment stablecoin issuers; and

    (2) the broader digital finance ecosystem, including 
 accepted communications protocols and blockchains, permissioned 
 or public.

SEC. 12. STUDY ON NON-PAYMENT STABLECOINS.

    (a) Study by Treasury.--

    (1) Study.--The Secretary of the Treasury, in consultation 
 with the Board, the Comptroller, the Corporation, the 
 Securities and Exchange Commission, and the Commodity Futures 
 Trading Commission shall carry out a study of non-payment 
 stablecoins, including endogenously collateralized payment 
 stablecoins.

    (2) Report.--Not later than 365 days after the date of the 
 enactment of this Act, the Secretary 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 paragraph

    (1) , including an analysis of--
        (A) the categories of non-payment stablecoins, 
 including the benefits and risks of technological 
 design features;
        (B) the participants in non-payment stablecoin 
 arrangements;
            (C) utilization and potential utilization of non-
 payment stablecoins;
            (D) nature of reserve compositions;
        (E) types of algorithms being employed;
        (F) governance structure, including aspects of 
 decentralization;
        (G) nature of public promotion and advertising; and
        (H) clarity and availability of consumer notices 
 disclosures.

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

    (1) in which its originator 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. 13. REPORTS.

    (a) Annual Reporting Requirement.--Beginning on the date that is 1 
year after the date of enactment of this Act, and annually thereafter, 
the primary Federal payment stablecoin regulators shall submit to the 
Committee on Banking, Housing, and Urban Affairs of the Senate, the 
Committee on Financial Services of the House of Representatives, and 
the Director of the Office of Financial Research a report on the status 
of the payment stablecoin industry, including--

    (1) a summary of trends in payment stablecoin activities;

    (2) a summary of the number of applications for permitted 
 payment stablecoin issuer under 

section 5, including aggregate 
 approvals and rejections of applications; and

    (3) a description of the potential financial stability 
 risks posed to the safety and soundness of the broader 
 financial system by payment stablecoin activities.

    (b) FSOC Report.--The Financial Stability Oversight Council shall 
incorporate the findings in the report under subsection

    (a) into the 
annual report of the Council required under 

section 112

    (a)

    (2)
        (N) of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 
5322).

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, Federal credit union, 
State credit union, national bank, or trust company to engage in 
activities permissible pursuant to applicable State and Federal law, 
including--

    (1) accepting or receiving deposits 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 guidance and regulations, and if 
necessary, amend or promulgate new regulations and 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 (as defined under 

section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813)), 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 institution-affiliated party thereof--

    (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 activities;

    (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 under 
 

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

section 6003 of the Anti-Money Laundering Act of 
 2020);

    (3) to recognize a liability for any obligations related to 
 activities or services performed for digital assets that the 
 entity does not own in any amount greater than the expense 
 recognized in the income statement or the consideration 
 received as a result of the corresponding obligation.
            (d) === Definitions. ===
-In this section:

    (1) Depository institution.--The term ``depository 
 institution'' has the meaning given that term under 

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

    (2) Credit union terms.--The terms ``Federal credit union'' 
 and ``State credit union'' have the meaning given those terms, 
 respectively, under 

section 101 of the Federal Credit Union 
 Act.

SEC. 15. AMENDMENTS TO CLARIFY THAT PAYMENT STABLECOINS ARE NOT 
 SECURITIES OR COMMODITIES AND PERMITTED PAYMENT 
 STABLECOIN ISSUERS ARE NOT INVESTMENT COMPANIES.

    (a) Investment Advisers Act of 1940.--

Section 202

    (a)

    (18) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-2

    (a)

    (18) ) is amended by 
adding at the end the following: ``The term `security' does not include 
a payment stablecoin issued by a permitted payment stablecoin issuer, 
as such terms are defined in 

section 2 of the Guiding and Establishing 
National Innovation for U.S. Stablecoins 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) )(15 U.S.C. 
 80a-2

    (a)

    (36) ), by adding at the end the following: ``The term 
 `security' does not include a payment stablecoin issued by a 
 permitted payment stablecoin issuer, as such terms are defined 
 in 

section 2 of the Guiding and Establishing National 
 Innovation for U.S. Stablecoins Act of 2025.''; and

    (2) in 

section 3
            (c) (3) (15 U.S.C. 80a-3
            (c) (3) ), by 
 inserting ``any permitted payment stablecoin issuer, as such 
 term is defined in 

section 2 of the Guiding and Establishing 
 National Innovation for U.S. Stablecoins Act of 2025;'' after 
 ``therefor;''.
            (c) Securities Act of 1933.--

Section 2

    (a)

    (1) of the Securities Act 
of 1933 (15 U.S.C. 77b

    (a)

    (1) ) is amended by adding at the end the 
following: ``The term `security' does not include a payment stablecoin 
issued by a permitted payment stablecoin issuer, as such terms are 
defined in 

section 2 of the Guiding and Establishing National 
Innovation for U.S. Stablecoins 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 in 

section 2 of the Guiding and Establishing 
National Innovation for U.S. Stablecoins 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 in 

section 2 of the 
Guiding and Establishing National Innovation for U.S. Stablecoins Act 
of 2025.''.

    (f) Commodity Exchange Act.--

Section 1a of the Commodity Exchange 
Act (7 U.S.C. 1a) is amended by adding at the end the following: ``The 
term `commodity' does not include a payment stablecoin issued by a 
permitted payment stablecoin issuer, as such terms are defined in 

section 2 of the Guiding and Establishing National Innovation for U.S. 
payment stablecoins Act of 2025.''

SEC. 16. RECIPROCITY FOR PAYMENT STABLECOINS ISSUED IN OVERSEAS 
 JURISDICTIONS.

 Notwithstanding 

section 2

    (15)
        (A)
            (ii) 
            (III) , the Secretary of the 
Treasury shall create and implement reciprocal arrangements or other 
bilateral agreements between the United States and jurisdictions with 
substantially similar payment stablecoin regulatory regimes to the 
requirements under this Act, including reserve requirements, 
supervision, anti-money laundering and counter-terrorism features, 
sanctions compliance standards, liquidity requirements, and risk 
management standards, to facilitate international transactions and 
interoperability with United States dollar-denominated payment 
stablecoins issued overseas. The Secretary of the Treasury shall aim to 
complete such arrangements not later than the date that is 2 years 
after the date of enactment of this Act.

SEC. 17. EFFECTIVE DATE.

    (a) In General.--This Act, and the amendments made by this Act, 
shall take effect on the earlier of--

    (1) 18 months after the date of enactment of this Act; or

    (2) the date that is 120 days after the date on which the 
 primary Federal payment stablecoin regulators issue any final 
 regulations implementing this Act.

    (b) Notice to Congress.--The primary Federal payment stablecoin 
regulators shall notify Congress upon beginning to process applications 
under this Act.
            (c) 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 described under subsection

    (a) , with respect to--

    (1) a subsidiary of an insured depository institution, if 
 the insured depository institution has an application pending 
 for the subsidiary to become a permitted payment stablecoin 
 issuer on that effective date; or

    (2) a nonbank entity with an application pending to become 
 a Comptroller-regulated entity on that effective date.

SEC. 18. RULEMAKING.

    (a) 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 implement this Act through appropriate notice and comment 
rulemaking, including promulgating regulations as described in this Act 
as necessary.

    (b) Coordination.--Federal payment stablecoin regulators and State 
payment stablecoin regulators should coordinate on the issuance of any 
regulations to implement this Act.
            (c) Report Required.--Not later than 180 days after the date of 
enactment 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 Representatives a 
report that confirms and describes the rules promulgated to implement 
this Act.
 Calendar No. 33

119th CONGRESS

 1st Session

 S. 919

_______________________________________________________________________

 A BILL

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

_______________________________________________________________________

 March 18, 2025

 Reported with an amendment