Understanding the GENIUS Act of 2025

Understanding the GENIUS Act of 2025

• 1. II 119TH CONGRESS 1ST SESSION S. 394 To provide for the regulation of payment stablecoins, and for other purposes. IN THE SENATE OF THE UNITED STATES FEBRUARY 4, 2025 Mr. HAGERTY (for himself, Mr. SCOTT of South Carolina, Mrs. GILLIBRAND, and Ms. LUMMIS) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To provide for the regulation of payment stablecoins, and for other purposes. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 SECTION 1. SHORT TITLE. 4 This Act may be cited as the ‘‘Guiding and Estab5 lishing National Innovation for U.S. Stablecoins of 2025’’ 6 or the ‘‘GENIUS Act of 2025’’. 7 SEC. 2. DEFINITIONS. 8 In this Act: 9 (1) BANK SECRECY ACT.—The term ‘‘Bank Se10 crecy Act’’ means— VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 2. 2 •S 394 IS 1 (A) section 21 of the Federal Deposit In2 surance Act (12 U.S.C. 1829b); 3 (B) chapter 2 of title I of Public Law 91– 4 508 (12 U.S.C. 1951 et seq.); and 5 (C) subchapter II of chapter 53 of title 31, 6 United States Code. 7 (2) BOARD.—The term ‘‘Board’’ means the 8 Board of Governors of the Federal Reserve System. 9 (3) COMPTROLLER.—The term ‘‘Comptroller’’ 10 means the Comptroller of the Currency. 11 (4) COMPTROLLER-REGULATED ENTITY.—The 12 term ‘‘Comptroller-regulated entity’’ means any Fed13 eral qualified nonbank payment stablecoin issuer 14 that is subject to regulation and supervision exclu15 sively by the Comptroller, pursuant to section 16 4(a)(7). 17 (5) CORPORATION.—The term ‘‘Corporation’’ 18 means the Federal Deposit Insurance Corporation. 19 (6) DIGITAL ASSET.—The term ‘‘digital asset’’ 20 means any digital representation of value which is 21 recorded on a cryptographically-secured distributed 22 ledger. 23 (7) DISTRIBUTED LEDGER.—The term ‘‘distrib24 uted ledger’’ means technology where data is shared 25 across a network that creates a public digital ledger VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 3. 3 •S 394 IS 1 of verified transactions or information among net2 work participants and the data is linked using cryp3 tography to maintain the integrity of the public ledg4 er and execute other functions. 5 (8) FEDERAL QUALIFIED NONBANK PAYMENT 6 STABLECOIN ISSUER.—The term ‘‘Federal qualified 7 nonbank payment stablecoin issuer’’ means a 8 nonbank entity approved by the primary Federal 9 payment stablecoin regulator, pursuant to section 5, 10 to issue payment stablecoins. 11 (9) INSTITUTION-AFFILIATED PARTY.—With re12 spect to a permitted payment stablecoin issuer, the 13 term ‘‘institution-affiliated party’’ means any direc14 tor, officer, employee, or person in control of, or 15 agent for, the permitted payment stablecoin issuer. 16 (10) INSURED DEPOSITORY INSTITUTION.—The 17 term ‘‘insured depository institution’’ means— 18 (A) an insured depository institution, as 19 defined in section 3 of the Federal Deposit In20 surance Act (12 U.S.C. 1813); and 21 (B) an insured credit union, as defined in 22 section 101 of the Federal Credit Union Act 23 (12 U.S.C. 1752). 24 (11) MONETARY VALUE.—The term ‘‘monetary 25 value’’ means a national currency or deposit (as deVerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 4. 4 •S 394 IS 1 fined under Section 3 of the Federal Deposit Insur2 ance Act) denominated in a national currency. 3 (12) NATIONAL CURRENCY.—The term ‘‘na4 tional currency’’ means a Federal Reserve note (as 5 the term is used in the first undesignated paragraph 6 of section 16 of the Federal Reserve Act (12 U.S.C. 7 411)), money issued by a central bank, and money 8 issued by an intergovernmental organization pursu9 ant to an agreement by 1 or more governments. 10 (13) NONBANK ENTITY.—The term ‘‘nonbank 11 entity’’ means a person that is not an insured depos12 itory institution or subsidiary of an insured deposi13 tory institution. 14 (14) PAYMENT STABLECOIN.—The term ‘‘pay15 ment stablecoin’’— 16 (A) means a digital asset— 17 (i) that is or is designed to be used as 18 a means of payment or settlement; and 19 (ii) the issuer of which— 20 (I) is obligated to convert, re21 deem, or repurchase for a fixed 22 amount of monetary value; and 23 (II) represents it will maintain or 24 creates the reasonable expectation 25 that it will maintain a stable value relVerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 5. 5 •S 394 IS 1 ative to the value of a fixed amount of 2 monetary value; and 3 (B) that is not— 4 (i) a national currency; or 5 (ii) a security issued by an investment 6 company registered under section 8(a) of 7 the Investment Company Act of 1940 (15 8 U.S.C. 80a–8(a)). 9 (15) PERMITTED PAYMENT STABLECOIN 10 ISSUER.—The term ‘‘permitted payment stablecoin 11 issuer’’ means— 12 (A) a subsidiary of an insured depository 13 institution that has been approved to issue pay14 ment stablecoins under section 5; 15 (B) a Federal qualified nonbank payment 16 stablecoin issuer that has been approved to 17 issue payment stablecoins under section 5; or 18 (C) a State qualified payment stablecoin 19 issuer. 20 (16) PERSON.—The term ‘‘person’’ means an 21 individual, partnership, company, corporation, asso22 ciation (incorporated or unincorporated), trust, es23 tate, cooperative organization, or other entity. 24 (17) PRIMARY FEDERAL PAYMENT STABLECOIN 25 REGULATOR.— VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 6. 6 •S 394 IS 1 (A) IN GENERAL.—The term ‘‘primary 2 Federal payment stablecoin regulator’’ means— 3 (i) with respect to an insured deposi4 tory institution (other than an insured 5 credit union) or a subsidiary of an insured 6 depository institution (other than an in7 sured credit union), the appropriate Fed8 eral banking agency of such insured depos9 itory institution (as defined under section 10 3 of the Federal Deposit Insurance Act 11 (12 U.S.C. 1813)); 12 (ii) with respect to an insured credit 13 union or a subsidiary of an insured credit 14 union, the National Credit Union Adminis15 tration; 16 (iii) with respect to a Federal quali17 fied nonbank payment stablecoin issuer 18 that is not a national bank, the Comp19 troller; and 20 (iv) with respect to any entity char21 tered by the Comptroller, the Comptroller. 22 (B) PRIMARY FEDERAL PAYMENT 23 STABLECOIN REGULATORS.—The term ‘‘pri24 mary Federal payment stablecoin regulators’’ 25 means the Comptroller, the Board, the CorporaVerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 7. 7 •S 394 IS 1 tion, and the National Credit Union Adminis2 tration. 3 (18) REGISTERED PUBLIC ACCOUNTING 4 FIRM.—The term ‘‘registered public accounting 5 firm’’ has the meaning given that term under section 6 2 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7 7201). 8 (19) STATE.—The term ‘‘State’’ means each of 9 the several States, the District of Columbia, and 10 each territory of the United States. 11 (20) STATE QUALIFIED PAYMENT STABLECOIN 12 ISSUER.—The term ‘‘State qualified payment 13 stablecoin issuer’’ means an entity that— 14 (A) is legally established and approved to 15 issue payment stablecoins by a State payment 16 stablecoin regulator; and 17 (B) issues a payment stablecoin in compli18 ance with the requirements under section 4. 19 (21) STATE PAYMENT STABLECOIN REGU20 LATOR.—The term ‘‘State payment stablecoin regu21 lator’’ means a State agency that has primary regu22 latory and supervisory authority in such State over 23 entities that issue payment stablecoins. 24 (22) STATE REGULATED DEPOSITORY INSTITU25 TION.—The term ‘‘State regulated depository instiVerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 8. 8 •S 394 IS 1 tution’’ has the meaning given the term ‘‘State de2 pository institution’’ in section 3(c) of the Federal 3 Deposit Insurance Act (12 U.S.C. 1813(c)). 4 (23) SUBSIDIARY OF AN INSURED CREDIT 5 UNION.—With respect to an insured credit union, 6 the term ‘‘subsidiary of an insured credit union’’ 7 means— 8 (A) an organization providing services to 9 the insured credit union that are associated 10 with the routine operations of credit unions, as 11 described under section 107(7)(I) of the Fed12 eral Credit Union Act (12 U.S.C. 1757(7)(I)); 13 and 14 (B) a credit union service organization, as 15 such term is used under part 712 of title 12, 16 Code of Federal Regulations, with respect to 17 which the insured credit union has an owner18 ship interest or to which the insured credit 19 union has extended a loan. 20 SEC. 3. LIMITATION ON WHO MAY ISSUE A PAYMENT 21 STABLECOIN. 22 It shall be unlawful for any person other than a per23 mitted payment stablecoin issuer to issue a payment 24 stablecoin in the United States. VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 9. 9 •S 394 IS 1 SEC. 4. REQUIREMENTS FOR ISSUING PAYMENT 2 STABLECOINS. 3 (a) STANDARDS FOR THE ISSUANCE OF PAYMENT 4 STABLECOINS.— 5 (1) IN GENERAL.—Permitted payment 6 stablecoin issuers shall— 7 (A) maintain reserves backing the issuer’s 8 payment stablecoins outstanding on an at least 9 1 to 1 basis, with reserves comprising— 10 (i) United States coins and currency 11 (including Federal reserve notes); 12 (ii) funds held as demand deposits (or 13 other deposits that may be withdrawn 14 upon request at any time) at insured de15 pository institutions, regulated foreign de16 pository institutions, or insured shares at 17 insured depository institutions, subject to 18 limitations established by the Corporation 19 and the National Credit Union Administra20 tion, respectively, to address safety and 21 soundness risks of such insured depository 22 institutions; 23 (iii) Treasury bills, notes, or bonds— 24 (I) with a remaining maturity of 25 93 days or less; or VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 10. 10 •S 394 IS 1 (II) issued with a maturity of 93 2 days or less; 3 (iv) repurchase agreements with a ma4 turity of 7 days or less that are backed by 5 Treasury bills with a maturity of 90 days 6 or less; 7 (v) reverse repurchase agreements 8 with a maturity of 7 days or less that are 9 collateralized by Treasury notes, bills, or 10 bonds on an overnight basis, subject to 11 overcollateralization in line with standard 12 market terms, that are— 13 (I) tri-party; 14 (II) centrally cleared through a 15 clearing house; or 16 (III) bilateral with a 17 counterparty that the issuer has de18 termined to be adequately credit19 worthy even in the event of severe 20 market stress; 21 (vi) money market funds, invested 22 solely in underlying assets described in 23 clauses (i) through (iv) of subparagraph 24 (A); or 25 (vii) Central Bank reserve deposits; VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 11. 11 •S 394 IS 1 (B) publicly disclose the issuer’s redemp2 tion policy; 3 (C) establish procedures for timely redemp4 tion of outstanding payment stablecoins; and 5 (D) publish the monthly composition of the 6 issuer’s reserves on the website of the issuer, 7 containing— 8 (i) the total number of outstanding 9 payment stablecoins issued by the issuer; 10 and 11 (ii) the amount and composition of 12 the reserves described under subparagraph 13 (A). 14 (2) PROHIBITION ON REHYPOTHECATION.—Re15 serves described under paragraph (1)(A) may not be 16 pledged, rehypothecated, or reused, except for the 17 purpose of creating liquidity to meet reasonable ex18 pectations of requests to redeem payment 19 stablecoins, such that reserves in the form of Treas20 ury bills may be pledged as collateral for repurchase 21 agreements with a maturity of 90 days or less, pro22 vided that either— 23 (A) the repurchase agreements are cleared 24 by a central clearing counterparty that is apVerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 12. 12 •S 394 IS 1 proved by the primary Federal or State pay2 ment stablecoin regulator; or 3 (B) the permitted payment stablecoin 4 issuer receives the prior approval of the primary 5 Federal or State payment stablecoin regulator. 6 (3) MONTHLY CERTIFICATION; EXAMINATION 7 OF REPORTS BY REGISTERED PUBLIC ACCOUNTING 8 FIRM.— 9 (A) IN GENERAL.—A permitted payment 10 stablecoin issuer shall, each month, have the in11 formation disclosed in the previous month-end 12 report required under paragraph (1)(D) exam13 ined by a registered public accounting firm. 14 (B) CERTIFICATION.—Each month, the 15 Chief Executive Officer and Chief Financial Of16 ficer of a permitted payment stablecoin issuer 17 shall submit a certification as to the accuracy 18 of the monthly report to— 19 (i) the primary Federal payment 20 stablecoin regulator; or 21 (ii) in the case of a State qualified 22 payment stablecoin issuer, to the State 23 payment stablecoin regulator. 24 (C) CRIMINAL PENALTY.—Any person who 25 submits a certification required under subparaVerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 13. 13 •S 394 IS 1 graph (B) knowing that such certification is 2 false shall be subject to the criminal penalties 3 set forth under section 1350(c) of title 18, 4 United States Code. 5 (4) CAPITAL, LIQUIDITY, AND RISK MANAGE6 MENT REQUIREMENTS.— 7 (A) IN GENERAL.—The primary Federal 8 payment stablecoin regulators shall, jointly, or 9 in the case of a State qualified payment 10 stablecoin issuer, the State payment stablecoin 11 regulator shall, issue— 12 (i) capital requirements applicable to 13 permitted payment stablecoin issuers, 14 which may not exceed what is sufficient to 15 ensure the permitted payment stablecoin 16 issuer’s ongoing operations; 17 (ii) appropriate liquidity and interest 18 rate risk management standards applicable 19 to permitted payment stablecoin issuers, 20 which may not exceed what is sufficient to 21 ensure the financial integrity of the per22 mitted payment stablecoin issuer and the 23 ability of the issuer to meet the financial 24 obligations of the issuer, including redemp25 tions; and VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 14. 14 •S 394 IS 1 (iii) appropriate operational, compli2 ance, and information technology risk 3 management standards, including Bank 4 Secrecy Act and sanctions compliance, tai5 lored to the business model and risk profile 6 of the permitted payment stablecoin issuer, 7 consistent with other legal authorities. 8 (B) RULE OF CONSTRUCTION.—Nothing in 9 this paragraph shall be construed to limit— 10 (i) the authority of the primary Fed11 eral regulators, in prescribing standards 12 under this paragraph, to tailor or differen13 tiate among issuers on an individual basis 14 or by category, taking into consideration 15 their capital structure, riskiness, com16 plexity, financial activities (including finan17 cial activities of their subsidiaries), size, 18 and any other risk related factors that the 19 primary Federal regulator determines ap20 propriate; or 21 (ii) the supervisory, regulatory, or en22 forcement authority of an appropriate Fed23 eral banking agency to further the safe 24 and sound operation of an institution VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 15. 15 •S 394 IS 1 under the supervision of the appropriate 2 Federal banking agency. 3 (C) APPLICABILITY OF EXISTING CAPITAL 4 STANDARDS.—With respect to the promulgation 5 of rules under subsection (a)(1)(A), section 171 6 of the Financial Stability Act of 2010 (12 7 U.S.C. 5371(a)(1)(A)) shall not apply. 8 (5) TREATMENT UNDER THE BANK SECRECY 9 ACT.—A permitted payment stablecoin issuer shall 10 be treated as a financial institution for purposes of 11 the Bank Secrecy Act. 12 (6) LIMITATION ON STABLECOIN ACTIVITIES.— 13 (A) IN GENERAL.—A permitted payment 14 stablecoin issuer may only— 15 (i) issue payment stablecoins; 16 (ii) redeem payment stablecoins; 17 (iii) manage related reserves (includ18 ing purchasing and holding reserve assets); 19 (iv) provide custodial or safekeeping 20 services for payment stablecoins, required 21 reserves, or private keys of payment 22 stablecoins; and 23 (v) undertake other functions that di24 rectly support the work of issuing and re25 deeming payment stablecoins. VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 16. 16 •S 394 IS 1 (B) RULE OF CONSTRUCTION.—Nothing in 2 subparagraph (A) shall prevent a permitted 3 stablecoin issuer from engaging in non4 stablecoin activities that are explicitly allowed 5 by the relevant regulator. 6 (7) REGULATION BY THE COMPTROLLER.— 7 (A) IN GENERAL.—A Federal qualified 8 nonbank payment stablecoin issuer shall be reg9 ulated and supervised exclusively by the Comp10 troller, which shall have authority, in coordina11 tion with other relevant regulators, to issue 12 such regulations and orders as necessary to en13 sure the safety and soundness of the issuers, 14 consistent with the provisions of this Act. 15 (B) CONFORMING AMENDMENT.—Section 16 324(b) of the Revised Statutes (12 U.S.C. 1(b)) 17 is amended by adding at the end the following: 18 ‘‘(3) REGULATION OF FEDERAL QUALIFIED 19 NONBANK PAYMENT STABLECOIN ISSUERS.—The 20 Comptroller of the Currency shall, in coordination 21 with other relevant regulators, issue such regulations 22 and orders as necessary to ensure the safety and 23 soundness of any nonbank entity approved by the 24 Comptroller to issue payment stablecoins.’’. 25 (b) STATE-LEVEL REGULATORY REGIMES.— VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 17. 17 •S 394 IS 1 (1) OPTION FOR STATE-LEVEL REGULATORY 2 REGIME.—Notwithstanding the Federal regulatory 3 framework established under subsection (a), a 4 stablecoin issuer with a total market capitalization 5 of not more than $10,000,000,000 may opt for regu6 lation under a State-level regulatory regime, pro7 vided that the State-level regulatory regime is sub8 stantially similar to the Federal regulatory frame9 work under that subsection. 10 (2) REVIEW.—State regulators shall review 11 State-level regulatory regimes according to criteria 12 the State regulators establish for determining wheth13 er a State-level regulatory regime is substantially 14 similar to the Federal regulatory framework under 15 subsection (a). 16 (3) CERTIFICATION.— 17 (A) INITIAL CERTIFICATION.—Subject to 18 subparagraph (B), not later than 1 year after 19 the date of enactment of this Act, State regu20 lators shall submit to the Secretary of the 21 Treasury an initial certification that their 22 State-level regulatory regime meets the criteria 23 for substantial similarity under paragraph (2). 24 (B) FORM OF CERTIFICATION.—The initial 25 certification required under subparagraph (A) VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 18. 18 •S 394 IS 1 shall contain, in a form prescribed by the Sec2 retary of the Treasury, an attestation that the 3 State-level regulatory regime meets the criteria 4 for substantial similarity under paragraph (2). 5 (C) ANNUAL RECERTIFICATION.—Not later 6 than a date to be determined by the Secretary 7 each year, the State shall submit to the Sec8 retary of the Treasury an additional certifi9 cation that confirms the accuracy of initial cer10 tification submitted under subparagraph (A). 11 (4) NOT SUBSTANTIALLY SIMILAR.— 12 (A) IN GENERAL.—If a State regulator 13 does not submit a certification under paragraph 14 (3), then a payment stablecoin issuer operating 15 under this subsection shall be subject to the 16 Federal regulatory framework as described in 17 subsection (c), notwithstanding the market cap18 italization threshold therein. 19 (B) TREASURY REVIEW.—The Secretary of 20 the Treasury may reject a certification under 21 paragraph (3) if the Secretary determines that 22 the State-level regulatory regime is not substan23 tially similar to the Federal regulatory frame24 work under subsection (a), and the payment 25 stablecoin issuer shall be subject to the Federal VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 19. 19 •S 394 IS 1 regulatory framework as described in subsection 2 (c), notwithstanding the market capitalization 3 threshold therein. 4 (C) APPELLATE REVIEW.—A payment 5 stablecoin issuer may challenge the determina6 tion of the State regulator or the Secretary of 7 the Treasury under this paragraph in the 8 United States District Court for the District of 9 Columbia. 10 (5) LIST.—The Secretary of the Treasury shall 11 publish and maintain in the Federal Register and on 12 the website of the Department of the Treasury a list 13 of States that have submitted initial certifications 14 and recertifications under paragraph (3). 15 (c) TRANSITION TO FEDERAL REGULATION.— 16 (1) DEPOSITORY INSTITUTION.—A State-regu17 lated depository institution that has been approved 18 as a payment stablecoin issuer with a market cap19 italization of more than $10,000,000,000 shall— 20 (A) not later than 360 days after reaching 21 such market capitalization, transition to regula22 tion under the Federal regulatory framework of 23 the Board; or 24 (B) beginning on the date of reaching such 25 market capitalization, cease issuing new VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 20. 20 •S 394 IS 1 stablecoins until the State-regulated stablecoin 2 issuer is under the $10,000,000,000 market 3 capitalization threshold. 4 (2) OTHER INSTITUTIONS.—A State qualified 5 payment stablecoin issuer not described in para6 graph (1) with a market capitalization of more than 7 $10,000,000,000 shall— 8 (A) not later than 360 days after reaching 9 such market capitalization, transition to regula10 tion under the regulatory framework of the 11 Comptroller; or 12 (B) beginning on the date of reaching such 13 market capitalization, cease issuing new 14 stablecoins until the State-regulated stablecoin 15 issuer is under the $10,000,000,000 market 16 capitalization threshold. 17 (3) CONDITIONAL APPROVAL.—Upon filing an 18 application with the appropriate Federal regulator, a 19 State qualified payment stablecoin issuer shall be 20 deemed conditionally approved, pending final ap21 proval or denial of the application. 22 (4) WAIVER.—The applicable Federal regulator 23 may waive the requirement under paragraph (1) or 24 (2) to permit a State qualified payment stablecoin VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 21. 21 •S 394 IS 1 issuer to remain under a State-level regulatory re2 gime. 3 (d) RULEMAKING.— 4 (1) IN GENERAL.—The primary Federal pay5 ment stablecoin regulators and State payment 6 stablecoin regulators may issue such orders and reg7 ulations as may be necessary to administer and 8 carry out the requirements of this section, including 9 to establish conditions, and to prevent evasions 10 thereof. 11 (2) JOINT ISSUANCE OF REGULATION.—All reg12 ulations issued to carry out this section shall be 13 issued jointly by the primary Federal payment 14 stablecoin regulators, if not issued by a State pay15 ment stablecoin regulator. 16 (3) RULEMAKING DEADLINE.—Not later than 17 the end of the 180-day period beginning on the date 18 of enactment of this Act, the Federal payment 19 stablecoin regulators shall issue regulations to carry 20 out this section. 21 SEC. 5. APPROVAL OF SUBSIDIARIES OF INSURED DEPOSI22 TORY INSTITUTIONS AND FEDERAL QUALI23 FIED NONBANK PAYMENT STABLECOIN 24 ISSUERS. 25 (a) APPLICATION.— VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 22. 22 •S 394 IS 1 (1) IN GENERAL.—The primary Federal pay2 ment stablecoin regulator shall receive, review, and 3 approve applications from any insured depository in4 stitution that seeks to issue payment stablecoins 5 through a subsidiary and any nonbank entity that 6 seeks to issue payment stablecoins. The primary 7 Federal payment stablecoin regulator shall establish 8 a process for the licensing and regulation of these 9 entities. 10 (2) AUTHORITY TO ISSUE REGULATIONS AND 11 PROCESS APPLICATIONS.—The primary Federal pay12 ment stablecoin regulators shall, before the effective 13 date described in section 16— 14 (A) issue regulations to carry out this sec15 tion; and 16 (B) pursuant to the regulations described 17 in subparagraph (A), accept and process appli18 cations under this Act. 19 (3) MANDATORY APPROVAL PROCESS.—The pri20 mary Federal payment stablecoin regulator shall, 21 upon receipt of a complete application, evaluate and 22 make a determination on each application based on 23 the criteria established under this Act. 24 (b) EVALUATION OF APPLICATIONS.—A complete ap25 plication received under subsection (a) shall be evaluated VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 23. 23 •S 394 IS 1 by the primary Federal payment stablecoin regulator 2 using the factors described in subsection (c). 3 (c) FACTORS TO BE CONSIDERED.—The factors de4 scribed in this subsection are the ability of the applicant 5 (or, in the case of an applicant that is an insured deposi6 tory institution, the subsidiary of the applicant), based on 7 the financial condition and resources, to meet the require8 ments set forth in section 4. 9 (d) TIMING FOR DECISION; GROUNDS FOR DE10 NIAL.— 11 (1) TIMING.—The primary Federal payment 12 stablecoin regulator shall render a decision on an ap13 plication no later than 120 days after informing the 14 applicant that the application is complete. 15 (2) DENIAL OF APPLICATION.— 16 (A) GROUNDS FOR DENIAL.—The primary 17 Federal payment stablecoin regulator shall only 18 deny a complete application received under sub19 section (a) if the regulator determines that the 20 activities of the applicant would be unsafe or 21 unsound based on the factors described in sub22 section (c). 23 (B) EXPLANATION REQUIRED.—If the pri24 mary Federal payment stablecoin regulator de25 nies a complete application received under subVerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 24. 24 •S 394 IS 1 section (a), not later than 30 days after the 2 date of such denial, the regulator shall provide 3 the applicant with written notice explaining the 4 denial with specificity, including all findings 5 made by the regulator with respect to all identi6 fied material shortcomings in the application, 7 including actionable recommendations on how 8 the applicant could address the identified mate9 rial shortcomings. 10 (C) OPPORTUNITY FOR HEARING; FINAL 11 DETERMINATION.— 12 (i) IN GENERAL.—Not later than 30 13 days after the date of receipt of any notice 14 of the denial of an application under this 15 section, the applicant may request, in writ16 ing, an opportunity for a written or oral 17 hearing before the primary Federal pay18 ment stablecoin regulator to appeal the de19 nial. 20 (ii) TIMING.—Upon receipt of a timely 21 request, the primary Federal payment 22 stablecoin regulator shall notice a time 23 (not later than 30 days after the date of 24 receipt of the request) and place at which 25 the applicant may appear, personally or VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 25. 25 •S 394 IS 1 through counsel, to submit written mate2 rials or provide oral testimony and oral ar3 gument). 4 (iii) FINAL DETERMINATION.—Not 5 later than 60 days after the date of a hear6 ing under this subparagraph, the primary 7 Federal payment stablecoin regulator shall 8 notify the applicant of the final determina9 tion of the Comptroller, which shall con10 tain a statement of the basis for that de11 termination, with specific findings. 12 (iv) NOTICE IF NO HEARING.—If an 13 applicant does not make a timely request 14 for a hearing under this subparagraph, the 15 primary Federal payment stablecoin regu16 lator shall notify the applicant, not later 17 than 10 days after the date by which the 18 applicant may request a hearing under this 19 subparagraph, in writing, that the denial 20 of the application is a final determination 21 of the primary Federal payment stablecoin 22 regulator. 23 (3) FAILURE TO RENDER A DECISION.—If the 24 primary Federal payment stablecoin regulator fails 25 to render a decision on a complete application within VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 26. 26 •S 394 IS 1 the time period specified in paragraph (1), the appli2 cation shall be deemed approved. 3 (4) RIGHT TO REAPPLY.—The denial of an ap4 plication under this section shall not prohibit the ap5 plicant from filing a subsequent application. 6 (e) REPORT ON PENDING APPLICATIONS.—The 7 Comptroller shall annually report to Congress on the ap8 plications that have been pending for 6 months or longer 9 since the date of the initial application filed under sub10 section (a) where the applicant has been informed that the 11 application remains incomplete, including providing docu12 mentation on the status of the application and why the 13 application has not yet been approved. 14 (f) RULEMAKING.—The Comptroller shall issue rules 15 necessary for the regulation of the issuance of payment 16 stablecoins, but may not impose requirements inconsistent 17 with the requirements specified under section 4. 18 SEC. 6. SUPERVISION AND ENFORCEMENT WITH RESPECT 19 TO SUBSIDIARIES OF INSURED DEPOSITORY 20 INSTITUTIONS AND COMPTROLLER-REGU21 LATED ENTITIES. 22 (a) SUPERVISION.— 23 (1) SUBSIDIARY OF AN INSURED DEPOSITORY 24 INSTITUTION.— VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 27. 27 •S 394 IS 1 (A) IN GENERAL.—Each permitted pay2 ment stablecoin issuer that is a subsidiary of an 3 insured depository institution shall be subject to 4 supervision by the primary Federal payment 5 stablecoin regulator in the same manner as 6 such insured depository institution. 7 (B) GRAMM-LEACH-BLILEY ACT.—For 8 purposes of title V of the Gramm-Leach-Bliley 9 Act (15 U.S.C. 6801 et seq.) each permitted 10 payment stablecoin issuer that is a subsidiary 11 of an insured depository institution shall be 12 deemed a financial institution. 13 (2) COMPTROLLER-REGULATED ENTITIES.— 14 (A) SUBMISSION OF REPORTS.—Each 15 Comptroller-regulated entity shall, upon re16 quest, submit reports to the Comptroller as 17 to— 18 (i) the financial condition of the 19 Comptroller-regulated entity, systems for 20 monitoring and controlling financial and 21 operating risks; and 22 (ii) compliance by the Comptroller23 regulated entity (and any subsidiary there24 of) with this Act. VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 28. 28 •S 394 IS 1 (B) EXAMINATIONS.—The Comptroller 2 may make examinations of a Comptroller-regu3 lated entity and each subsidiary of such entity 4 in order to inform the Comptroller of— 5 (i) the nature of the operations and fi6 nancial condition of the Comptroller-regu7 lated entity; 8 (ii) the financial, operational, and 9 other risks within the Comptroller-regu10 lated entity that may pose a threat to— 11 (I) the safety and soundness of 12 the Comptroller-regulated entity; or 13 (II) the stability of the financial 14 system of the United States; and 15 (iii) the systems of the Comptroller16 regulated entity for monitoring and con17 trolling the risks described in clause (ii). 18 (C) REQUIREMENTS FOR EFFICIENCY.— 19 (i) USE OF EXISTING REPORTS.—In 20 supervising and examining a Comptroller21 regulated entity, the Comptroller shall, to 22 the fullest extent possible, use existing re23 ports and other supervisory information. 24 (ii) AVOIDANCE OF DUPLICATION.— 25 The Comptroller shall, to the fullest extent VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 29. 29 •S 394 IS 1 possible, avoid duplication of examination 2 activities, reporting requirements, and re3 quests for information in carrying out this 4 Act with respect to a Comptroller-regu5 lated entity. 6 (iii) CONSIDERATION OF BURDEN.— 7 The Comptroller shall, with respect to any 8 examination or request for the submission 9 of a report under this paragraph, only re10 quest examinations and reports at a ca11 dence and in a format that is similar to 12 those required for similarly situated Comp13 troller-regulated entities. 14 (b) ENFORCEMENT.— 15 (1) SUSPENSION OR REVOCATION OF REGISTRA16 TION.—The primary Federal payment stablecoin 17 regulator may prohibit a permitted payment 18 stablecoin issuer from issuing payment stablecoins, if 19 the primary Federal payment stablecoin regulator 20 determines that such permitted payment stablecoin 21 issuer, or an institution-affiliated party of the per22 mitted payment stablecoin issuer, is— 23 (A) materially violating or has materially 24 violated this Act or any regulation or order 25 issued under this Act; or VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 30. 30 •S 394 IS 1 (B) materially violating or has materially 2 violated any condition imposed in writing by the 3 primary Federal payment stablecoin regulator 4 in connection with a written agreement entered 5 into between the permitted payment stablecoin 6 issuer and the primary Federal payment 7 stablecoin regulator. 8 (2) CEASE-AND-DESIST PROCEEDINGS.—If the 9 primary Federal payment stablecoin regulator has 10 reasonable cause to believe that a permitted payment 11 stablecoin issuer or any institution-affiliated party of 12 a permitted payment stablecoin issuer is violating, 13 has violated, or is attempting to violate this Act, any 14 regulation or order issued under this Act, or any 15 written agreement entered into with the primary 16 Federal payment stablecoin regulator or condition 17 imposed in writing by the primary Federal payment 18 stablecoin regulator in connection with any applica19 tion or other request, the primary Federal payment 20 stablecoin regulator may, by provisions that are 21 mandatory or otherwise, order the permitted pay22 ment stablecoin issuer or institution-affiliated party 23 of the permitted payment stablecoin issuer to— 24 (A) cease and desist from such violation or 25 practice; or VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 31. 31 •S 394 IS 1 (B) take affirmative action to correct the 2 conditions resulting from any such violation or 3 practice. 4 (3) REMOVAL AND PROHIBITION AUTHORITY.— 5 The primary Federal payment stablecoin regulator 6 may remove an institution-affiliated party of a per7 mitted payment stablecoin issuer from their position 8 or office or prohibit further participation in the af9 fairs of the permitted payment stablecoin issuer or 10 all permitted payment stablecoin issuers by such in11 stitution-affiliated party, if the primary Federal pay12 ment stablecoin regulator determines that— 13 (A) the institution-affiliated party has, di14 rectly or indirectly, committed a violation or at15 tempted violation of this Act or any regulation 16 or order issued under this Act; or 17 (B) the institution-affiliated party has 18 committed a violation of any provision of sub19 chapter II of chapter 53 of title 31, United 20 States Code. 21 (4) PROCEDURES.— 22 (A) IN GENERAL.—If the primary Federal 23 payment stablecoin regulator identifies a viola24 tion or attempted violation of this Act or makes 25 a determination under paragraph (1), (2), or VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 32. 32 •S 394 IS 1 (3), the primary Federal payment stablecoin 2 regulator shall comply with the procedures set 3 forth in subsections (b) and (e) of sections 8 of 4 the Federal Deposit Insurance Act (12 U.S.C. 5 1818). 6 (B) JUDICIAL REVIEW.—A person ag7 grieved by a final action under this subsection 8 may obtain judicial review of such action exclu9 sively as provided in section 8(h) of the Federal 10 Deposit Insurance Act (12 U.S.C. 1818(h)). 11 (C) INJUNCTION.—The primary Federal 12 payment stablecoin regulator may, in the dis13 cretion of the regulator, follow the procedures 14 provided in section 8(i)(1) of the Federal De15 posit Insurance Act (12 U.S.C. 1818(i)(1)) for 16 judicial enforcement of any effective and out17 standing notice or order issued under this sub18 section. 19 (D) TEMPORARY CEASE-AND-DESIST PRO20 CEEDINGS.—If the primary Federal payment 21 stablecoin regulator determines that a violation 22 or attempted violation of this Act or an action 23 with respect to which a determination was made 24 under paragraph (1), (2), or (3), or the con25 tinuation thereof, is likely to cause insolvency or VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 33. 33 •S 394 IS 1 significant dissipation of assets or earnings of a 2 permitted payment stablecoin issuer, or is likely 3 to weaken the condition of the permitted pay4 ment stablecoin issuer or otherwise prejudice 5 the interests of the customers of the permitted 6 payment stablecoin issuer prior to the comple7 tion the proceedings conducted under this para8 graph, the primary Federal payment stablecoin 9 regulator may follow the procedures provided in 10 section 8(c) of the Federal Deposit Insurance 11 Act (12 U.S.C. 1818(c)) to issue a temporary 12 cease-and-desist order. 13 (5) CIVIL MONEY PENALTIES.— 14 (A) FAILURE TO BE APPROVED.—Any per15 son who issues a United States dollar-denomi16 nated payment stablecoin and who is not a per17 mitted payment stablecoin issuer, and any insti18 tution-affiliated party of such a person who 19 knowingly participates is issuing such a pay20 ment stablecoin, shall be liable for a civil pen21 alty of not more than $100,000 for each day 22 during which such payment stablecoins are 23 issued. 24 (B) FIRST TIER.—Except as provided in 25 subparagraph (A), a permitted payment VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 34. 34 •S 394 IS 1 stablecoin issuer or institution-affiliated party 2 of such permitted payment stablecoin issuer 3 that materially violates this Act or any regula4 tion or order issued under this Act, or that ma5 terially violates any condition imposed in writ6 ing by the primary Federal payment stablecoin 7 regulator in connection with a written agree8 ment entered into between the permitted pay9 ment stablecoin issuer and the primary Federal 10 payment stablecoin regulator, shall be liable for 11 a civil penalty of up to $100,000 for each day 12 during which the violation continues. 13 (C) SECOND TIER.—Except as provided in 14 subparagraph (A), and in addition to the pen15 alties described under subparagraph (B), a per16 mitted payment stablecoin issuer or institution17 affiliated party of such permitted payment 18 stablecoin issuer who knowingly participates in 19 a violation of any provision of this Act, or any 20 regulation or order issued thereunder, is liable 21 for a civil penalty of up to an additional 22 $100,000 for each day during which the viola23 tion continues. 24 (D) PROCEDURE.—Any penalty imposed 25 under this paragraph may be assessed and colVerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 35. 35 •S 394 IS 1 lected by the primary Federal payment 2 stablecoin regulator pursuant to the procedures 3 set forth in section 8(i)(2) of the Federal De4 posit Insurance Act (12 U.S.C. 1818(i)(2)). 5 (E) NOTICE AND ORDERS AFTER SEPARA6 TION FROM SERVICE.—The resignation, termi7 nation of employment or participation, or sepa8 ration of an institution-affiliated party (includ9 ing a separation caused by the closing of a per10 mitted payment stablecoin issuer) shall not af11 fect the jurisdiction and authority of the pri12 mary Federal payment stablecoin regulator to 13 issue any notice or order and proceed under 14 this subsection against any such party, if such 15 notice or order is served before the end of the 16 6-year period beginning on the date such party 17 ceased to be an institution-affiliated party with 18 respect to such permitted payment stablecoin 19 issuer. 20 (6) NON-APPLICABILITY TO A STATE QUALI21 FIED PAYMENT STABLECOIN ISSUER.—This sub22 section shall not apply to a State qualified payment 23 stablecoin issuer. VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 36. 36 •S 394 IS 1 SEC. 7. STATE QUALIFIED PAYMENT STABLECOIN ISSUERS. 2 (a) IN GENERAL.—A State payment stablecoin regu3 lator shall have supervisory, examination, and enforcement 4 authority over a State qualified payment stablecoin issuer 5 of such State. 6 (b) AUTHORITY TO ENTER INTO AGREEMENTS 7 WITH THE BOARD.—A State payment stablecoin regu8 lator may enter into a memorandum of understanding 9 with the Board, by mutual agreement, under which the 10 Board may carry out the supervision, examination, and 11 enforcement authority with respect to the State qualified 12 payment stablecoin issuers of such State. 13 (c) SHARING OF INFORMATION.—A State payment 14 stablecoin regulator and the Board shall share information 15 on an ongoing basis with respect to a State qualified pay16 ment stablecoin issuer of such State, including a copy of 17 the initial application and any accompanying documents. 18 (d) RULEMAKING.—A State payment stablecoin regu19 lator may issue orders and rules under section 4 applicable 20 to State qualified payment stablecoin issuers to the same 21 extent as the primary Federal payment stablecoin regu22 lators issue orders and rules under section 4 applicable 23 to permitted payment stablecoin issuers that are not a 24 State qualified payment stablecoin issuers. 25 (e) ENFORCEMENT AUTHORITY IN EXIGENT CIR26 CUMSTANCES.— VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 37. 37 •S 394 IS 1 (1) BOARD.— 2 (A) IN GENERAL.—Subject to subpara3 graph (C), in exigent circumstances, the Board 4 may, after not less than 5 days prior written 5 notice to the applicable State payment 6 stablecoin regulator, take an enforcement action 7 against a State qualified payment stablecoin 8 issuer or an institution-affiliated party of such 9 issuer for violations of this Act that are exigent 10 in nature. 11 (B) RULEMAKING.—Not later than the end 12 of the 180-day period beginning on the date of 13 enactment of this Act, the Board shall issue 14 rules to set forth those exigent circumstances in 15 which the Board may act under this paragraph. 16 (C) LIMITATIONS.—If the Board deter17 mines that there is reasonable cause to believe 18 that the continuation by a State qualified pay19 ment stablecoin issuer of any activity con20 stitutes a serious risk to the financial safety, 21 soundness, or stability of the stablecoin issuer, 22 the Board may impose such restrictions as the 23 Board determines to be necessary to address 24 such risk. Such restrictions shall be issued in 25 the form of a directive, with the effect of a VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 38. 38 •S 394 IS 1 cease and desist order that has become final, to 2 the State qualified payment stablecoin issuer 3 and any of its affiliates, limiting— 4 (i) the payment of dividends by the 5 State qualified payment stablecoin issuer; 6 (ii) transactions between the State 7 qualified payment stablecoin issuer, a hold8 ing company, and the subsidiaries or affili9 ates of either the State qualified payment 10 stablecoin issuer or the holding company; 11 and 12 (iii) any activities of the State quali13 fied payment stablecoin issuer that might 14 create a serious risk that the liabilities of 15 a holding company and the affiliates of the 16 holding company may be imposed on the 17 State qualified payment stablecoin issuer. 18 (D) REVIEW OF DIRECTIVE.— 19 (i) ADMINISTRATIVE REVIEW.— 20 (I) IN GENERAL.—After a direc21 tive described in subparagraph (C) is 22 issued, the State qualified payment 23 stablecoin issuer, or any affiliate of 24 the State qualified payment stablecoin 25 issuer subject to the directive, may VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 39. 39 •S 394 IS 1 object and present to the Board, in 2 writing, the reasons why the directive 3 should be modified or rescinded. 4 (II) AUTOMATIC LAPSE OF DI5 RECTIVE.—If, after 10 days after the 6 receipt of a response described in sub7 clause (I), the Board does not affirm, 8 modify, or rescind the directive, the 9 directive shall automatically lapse. 10 (ii) JUDICIAL REVIEW.— 11 (I) IN GENERAL.—If the Board 12 affirms or modifies a directive pursu13 ant to clause (i), any affected party 14 may immediately thereafter petition 15 the United States district court for 16 the district in which the main office of 17 the affected party is located or in the 18 United States District Court for the 19 District of Columbia to stay, modify, 20 terminate, or set aside the directive. 21 (II) RELIEF FOR EXTRAOR22 DINARY CAUSE.—Upon a showing of 23 extraordinary cause, an affected party 24 may petition for relief under subclause 25 (I) without first pursuing or exhaustVerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 40. 40 •S 394 IS 1 ing the administrative remedies under 2 clause (i). 3 (2) COMPTROLLER.— 4 (A) IN GENERAL.—Subject to subpara5 graph (C), in exigent circumstances, the Comp6 troller shall, after not less than 5 days prior 7 written notice to the applicable State payment 8 stablecoin regulator, take an enforcement action 9 against a Comptroller-regulated entity or an in10 stitution-affiliated party of such entity for viola11 tions of this Act. 12 (B) RULEMAKING.—Not later than the end 13 of the 180-day period beginning on the date of 14 enactment of this Act, the Comptroller shall 15 issue rules to set forth those exigent cir16 cumstances in which the Comptroller may act 17 under this paragraph. 18 (C) LIMITATIONS.—If the Comptroller de19 termines that there is reasonable cause to be20 lieve that the continuation by a Comptroller21 regulated entity of any activity constitutes a se22 rious risk to the financial safety, soundness, or 23 stability of the stablecoin issuer, the Comp24 troller shall impose such restrictions as the 25 Comptroller determines to be necessary to adVerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 41. 41 •S 394 IS 1 dress such risk. Such restrictions shall be 2 issued in the form of a directive, with the effect 3 of a cease and desist order that has become 4 final, to the State qualified payment stablecoin 5 issuer and any of its affiliates, limiting— 6 (i) the payment of dividends by the 7 Comptroller-regulated entity; 8 (ii) transactions between the Comp9 troller-regulated entity, a holding company, 10 and the subsidiaries or affiliates of either 11 the Comptroller-regulated entity or the 12 holding company; and 13 (iii) any activities of the Comptroller14 regulated entity that might create a seri15 ous risk that the liabilities of a holding 16 company and the affiliates of the holding 17 company may be imposed on the Comp18 troller-regulated entity. 19 (D) REVIEW OF DIRECTIVE.— 20 (i) ADMINISTRATIVE REVIEW.— 21 (I) IN GENERAL.—After a direc22 tive described in subparagraph (C) is 23 issued, the Comptroller-regulated enti24 ty, or any affiliate of the Comptroller25 regulated entity subject to the direcVerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 42. 42 •S 394 IS 1 tive, may object and present to the 2 Comptroller, in writing, the reasons 3 why the directive should be modified 4 or rescinded. 5 (II) AUTOMATIC LAPSE OF DI6 RECTIVE.—If, after 10 days after the 7 receipt of a response described in sub8 clause (I), the Comptroller does not 9 affirm, modify, or rescind the direc10 tive, the directive shall automatically 11 lapse. 12 (ii) JUDICIAL REVIEW.— 13 (I) IN GENERAL.—If the Comp14 troller affirms or modifies a directive 15 pursuant to clause (i), any affected 16 party may immediately thereafter pe17 tition the United States district court 18 for the district in which the main of19 fice of the affected party is located or 20 in the United States District Court 21 for the District of Columbia to stay, 22 modify, terminate, or set aside the di23 rective. 24 (II) RELIEF FOR EXTRAOR25 DINARY CAUSE.—Upon a showing of VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 43. 43 •S 394 IS 1 extraordinary cause, an affected party 2 may petition for relief under subclause 3 (I) without first pursuing or exhaust4 ing the administrative remedies under 5 clause (i). 6 (f) GRAMM-LEACH-BLILEY ACT.—For purposes of 7 title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 8 et seq.) a State qualified payment stablecoin issuer is 9 deemed a financial institution. 10 (g) EFFECT ON STATE LAW.— 11 (1) HOST STATE LAW.—The consumer protec12 tion laws that generally apply to the operation of a 13 payment stablecoin issuer of the Host State apply to 14 the activities conducted in the Host State by an out15 of-State State qualified payment stablecoin issuer to 16 the same extent as those requirements apply to the 17 activities conducted in the Host State by an out-of18 State Federal qualified nonbank payment stablecoin 19 issuer. 20 (2) HOME STATE LAW.—If any Host State law 21 is determined not to apply under paragraph (1), the 22 laws of the Home State of the payment stablecoin 23 issuer shall govern the activities of the payment 24 stablecoin issuer conducted in the Host State. VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 44. 44 •S 394 IS 1 SEC. 8. CUSTOMER PROTECTION. 2 (a) IN GENERAL.—A person may only engage in the 3 business of providing custodial or safekeeping services for 4 permitted payment stablecoins or private keys of per5 mitted payment stablecoins, if the person— 6 (1) is subject to— 7 (A) supervision or regulation by a primary 8 Federal payment stablecoin regulator or a pri9 mary financial regulatory agency described 10 under subparagraph (B) or (C) of section 2(12) 11 of the Dodd-Frank Wall Street Reform and 12 Consumer Protection Act (12 U.S.C. 13 5301(12)); or 14 (B) supervision by a State bank super15 visor, as defined under section 3 of the Federal 16 Deposit Insurance Act (12 U.S.C. 1813) or a 17 State credit union supervisor, as defined under 18 section 6003 of the Anti-Money Laundering Act 19 of 2020, and such state bank supervisor or 20 state credit union supervisor makes available to 21 the Board such information as the Board deter22 mines necessary and relevant to the categories 23 of information under subsection (d); and 24 (2) complies with the segregation requirements 25 under subsection (b), unless such person complies 26 with similar requirements as required by a primary VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 45. 45 •S 394 IS 1 Federal payment stablecoin regulator, the Securities 2 and Exchange Commission, or the Commodity Fu3 tures Trading Commission. 4 (b) SEGREGATION REQUIREMENT.—A person de5 scribed in subsection (a) shall— 6 (1) treat and deal with the payment stablecoins, 7 private keys, cash, and other property of a person 8 for whom or on whose behalf the person receives, ac9 quires, or holds payment stablecoins, private keys, 10 cash, and other property (hereinafter in this section 11 referred to as the ‘‘customer’’) as belonging to such 12 customer; and 13 (2) take such steps as are appropriate to pro14 tect the payment stablecoins, private keys, cash, and 15 other property of a customer from the claims of 16 creditors of the person. 17 (c) COMMINGLING PROHIBITED.— 18 (1) IN GENERAL.—Payment stablecoins, cash, 19 and other property of a customer shall be separately 20 accounted for by a person described in subsection 21 (a) and shall not be commingled with the funds of 22 the person. 23 (2) EXCEPTION.—Notwithstanding paragraph 24 (1)— VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 46. 46 •S 394 IS 1 (A) the payment stablecoins, cash, and 2 other property of a customer may, for conven3 ience, be commingled and deposited in an omni4 bus account holding the payment stablecoins, 5 cash, and other property of more than 1 cus6 tomer at an insured depository institution or 7 trust company; 8 (B) such share of the payment stablecoins, 9 cash, and other property of the customer that 10 shall be necessary to transfer, adjust, or settle 11 a transaction or transfer of assets may be with12 drawn and applied to such purposes, including 13 the payment of commissions, taxes, storage, 14 and other charges lawfully accruing in connec15 tion with the provision of services by a person 16 described in subsection (a); and 17 (C) in accordance with such terms and 18 conditions as the Board may prescribe by rule, 19 regulation, or order, any customer payment 20 stablecoin, cash, and other property described 21 in this subsection may be commingled and de22 posited in customer accounts with payment 23 stablecoins, cash, and other property received 24 by the person and required by the Board to be VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 47. 47 •S 394 IS 1 separately accounted for, treated, and dealt 2 with as belonging to customers. 3 (d) REGULATORY INFORMATION.—A person de4 scribed under subsection (a) shall submit to the applicable 5 primary regulator information concerning the person’s 6 business operations and processes to protect customer as7 sets, in such form and manner as the primary regulator 8 shall determine. 9 (e) EXCLUSION.—The requirements of this section 10 shall not apply to any person solely on the basis that such 11 person engages in the business of providing hardware or 12 software to facilitate a customer’s own custody or safe13 keeping of the customer’s payment stablecoins or private 14 keys. 15 SEC. 9. TREATMENT OF INSOLVENT PAYMENT STABLECOIN 16 ISSUERS. 17 (a) IN GENERAL.—In any insolvency proceeding, in18 cluding any proceeding under title 11, United States Code, 19 or any insolvency proceeding by a primary Federal pay20 ment stablecoin regulator or a State banking supervisor 21 with respect to a payment stablecoin issuer, the claim of 22 a person holding payment stablecoins issued by the pay23 ment stablecoin issuer shall have priority over all other 24 claims against the payment stablecoin issuer. VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 48. 48 •S 394 IS 1 (b) PRIORITY IN BANKRUPTCY PROCEEDINGS.—Sec2 tion 507 of title 11, United States Code, is amended— 3 (1) in subsection (a), by striking ‘‘The fol4 lowing’’ and inserting ‘‘Subject to subsection (e), the 5 following’’; and 6 (2) by adding at the end the following: 7 ‘‘(e) Notwithstanding subsection (a), any claim of a 8 person holding payment stablecoins, as defined in section 9 2 of the Guiding and Establishing National Innovation for 10 U.S. Stablecoins of 2025, issued by a debtor shall have 11 first priority over any other claim against the debtor under 12 this title.’’. 13 (c) DEBTOR.—A payment stablecoin issuer that is 14 not a depository institution (as defined in section 3 of the 15 Federal Deposit Insurance Act (12 U.S.C. 1813)) may be 16 considered a debtor under title 11, United States Code. 17 SEC. 10. INTEROPERABILITY STANDARDS. 18 The primary Federal payment stablecoin regulators, 19 in consultation with the National Institute of Standards 20 and Technology, other relevant standard setting organiza21 tions, and State governments, shall assess and, if nec22 essary, may, pursuant to section 553 of title 5 and in a 23 manner consistent with the National Technology Transfer 24 and Advancement Act of 1995 (Public Law 104–113), VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 49. 49 •S 394 IS 1 prescribe standards for payment stablecoin issuers to pro2 mote compatibility and interoperability. 3 SEC. 11. STUDY ON ENDOGENOUSLY COLLATERALIZED 4 STABLECOINS. 5 (a) STUDY BY TREASURY.— 6 (1) STUDY.—The Secretary of the Treasury, in 7 consultation with the Board, the Comptroller, the 8 Corporation, and the Securities and Exchange Com9 mission, shall carry out a study of endogenously 10 collateralized stablecoins. 11 (2) REPORT.—Not later than 365 days after 12 the date of the enactment of this Act, the Secretary 13 shall provide to the Committee on Financial Services 14 of the House of Representatives and the Committee 15 on Banking, Housing, and Urban Affairs of the Sen16 ate a report that contains all findings made in car17 rying out the study under paragraph (1), including 18 an analysis of— 19 (A) the categories of non-payment 20 stablecoins, including the benefits and risks of 21 technological design features; 22 (B) the participants in non-payment 23 stablecoin arrangements; 24 (C) utilization and potential utilization of 25 non-payment stablecoins; VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 50. 50 •S 394 IS 1 (D) nature of reserve compositions; 2 (E) types of algorithms being employed; 3 (F) governance structure, including aspects 4 of decentralization; 5 (G) nature of public promotion and adver6 tising; and 7 (H) clarity and availability of consumer 8 notices disclosures. 9 (b) ENDOGENOUSLY COLLATERALIZED STABLECOIN 10 DEFINED.—In this section, the term ‘‘endogenously 11 collateralized stablecoin’’ means any digital asset— 12 (1) in which its originator has represented will 13 be converted, redeemed, or repurchased for a fixed 14 amount of monetary value; and 15 (2) that relies solely on the value of another 16 digital asset created or maintained by the same 17 originator to maintain the fixed price. 18 SEC. 12. REPORTS. 19 (a) RULEMAKING STATUS.—Not later than 6 months 20 after the date of enactment of this Act, the primary Fed21 eral payment stablecoin regulators shall provide a status 22 update on the development of the rulemaking under this 23 Act to the Committee on Financial Services of the House 24 of Representatives and the Committee on Banking, Hous25 ing, and Urban Affairs of the Senate. VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 51. 51 •S 394 IS 1 (b) ANNUAL REPORTING REQUIREMENT.—Begin2 ning on the date that is 1 year after the date of enactment 3 of this Act, and annually thereafter, the Board and Comp4 troller shall submit to the Committee on Banking, Hous5 ing, and Urban Affairs of the Senate, the Committee on 6 Financial Services of the House of Representatives, and 7 the Director of the Office of Financial Research a report 8 on the status of the payment stablecoin industry, includ9 ing— 10 (1) an overview of trends in payment stablecoin 11 activities; 12 (2) a summary of the number of applications 13 for permitted payment stablecoin issuer under sec14 tion 5, including aggregate approvals and rejections 15 of applications; and 16 (3) a description of the potential financial sta17 bility risks posed to the safety and soundness of the 18 broader financial system by payment stablecoin ac19 tivities. 20 (c) FSOC REPORT.—The Financial Stability Over21 sight Council shall incorporate the findings in the report 22 under subsection (b) into the annual report of the Council 23 required under section 112(a)(2)(N) of the Dodd-Frank 24 Wall Street Reform and Consumer Protection Act (12 25 U.S.C. 5322). VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 52. 52 •S 394 IS 1 SEC. 13. AUTHORITY OF BANKING INSTITUTIONS. 2 (a) RULE OF CONSTRUCTION.—Nothing in this Act 3 may be construed to limit the authority of a depository 4 institution, Federal credit union, State credit union, or 5 trust company to engage in activities permissible pursuant 6 to applicable State and Federal law, including— 7 (1) accepting or receiving deposits and issuing 8 digital assets that represent deposits; 9 (2) utilizing a distributed ledger for the books 10 and records of the entity and to affect intrabank 11 transfers; and 12 (3) providing custodial services for payment 13 stablecoins, private keys of payment stablecoins, or 14 reserves backing payment stablecoins. 15 (b) TREATMENT OF CUSTODY ACTIVITIES.—The ap16 propriate Federal banking agency (as defined under sec17 tion 3 of the Federal Deposit Insurance Act (12 U.S.C. 18 1813)), the National Credit Union Administration (in the 19 case of a credit union), and the Securities and Exchange 20 Commission may not require a depository institution, na21 tional bank, Federal credit union, State credit union, or 22 trust company, or any affiliate thereof— 23 (1) to include assets held in custody as a liabil24 ity on any financial statement or balance sheet, in25 cluding payment stablecoin custody or safekeeping 26 activities; VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 53. 53 •S 394 IS 1 (2) to hold additional regulatory capital against 2 assets in custody or safekeeping, except as necessary 3 to mitigate against operational risks inherent with 4 the custody or safekeeping services, as determined 5 by— 6 (A) the appropriate Federal banking agen7 cy; 8 (B) the National Credit Union Administra9 tion (in the case of a credit union); 10 (C) a State bank supervisor (as defined 11 under section 3 of the Federal Deposit Insur12 ance Act (12 U.S.C. 1813)); or 13 (D) a State credit union supervisor (as de14 fined under section 6003 of the Anti-Money 15 Laundering Act of 2020); 16 (3) to recognize a liability for any obligations 17 related to activities or services performed for digital 18 assets that the entity does not own if that liability 19 would exceed the expense recognized in the income 20 statement as a result of the corresponding obliga21 tion. 22 (c) DEFINITIONS.—In this section: 23 (1) DEPOSITORY INSTITUTION.—The term ‘‘de24 pository institution’’ has the meaning given that VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00053 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 54. 54 •S 394 IS 1 term under section 3 of the Federal Deposit Insur2 ance Act (12 U.S.C. 1813). 3 (2) CREDIT UNION TERMS.—The terms ‘‘Fed4 eral credit union’’ and ‘‘State credit union’’ have the 5 meaning given those terms, respectively, under sec6 tion 101 of the Federal Credit Union Act. 7 SEC. 14. AMENDMENTS TO CLARIFY THAT PAYMENT 8 STABLECOINS ARE NOT SECURITIES OR COM9 MODITIES. 10 (a) INVESTMENT ADVISERS ACT OF 1940.—Section 11 202(a)(18) of the Investment Advisers Act of 1940 (15 12 U.S.C. 80b–2(a)(18)) is amended by adding at the end 13 the following: ‘‘The term ‘security’ does not include a pay14 ment stablecoin issued by a permitted payment stablecoin 15 issuer, as such terms are defined, respectively, in section 16 2 of the Clarity for Payment Stablecoins Act of 2023.’’. 17 (b) INVESTMENT COMPANY ACT OF 1940.—Section 18 2(a)(36) of the Investment Company Act of 1940 (15 19 U.S.C. 80a–2(a)(36)) is amended by adding at the end 20 the following: ‘‘The term ‘security’ does not include a pay21 ment stablecoin issued by a permitted payment stablecoin 22 issuer, as such terms are defined, respectively, in section 23 2 of the Clarity for Payment Stablecoins Act of 2023.’’. 24 (c) SECURITIES ACT OF 1933.—Section 2(a)(1) of 25 the Securities Act of 1933 (15 U.S.C. 77b(a)(1)) is VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 55. 55 •S 394 IS 1 amended by adding at the end the following: ‘‘The term 2 ‘security’ does not include a payment stablecoin issued by 3 a permitted payment stablecoin issuer, as such terms are 4 defined, respectively, in section 2 of the Clarity for Pay5 ment Stablecoins Act of 2023.’’. 6 (d) SECURITIES EXCHANGE ACT OF 1934.—Section 7 3(a)(10) of the Securities Exchange Act of 1934 (15 8 U.S.C. 78c(a)(10)) is amended by adding at the end the 9 following: ‘‘The term ‘security’ does not include a payment 10 stablecoin issued by a permitted payment stablecoin 11 issuer, as such terms are defined, respectively, in section 12 2 of the Clarity for Payment Stablecoins Act of 2023.’’. 13 (e) SECURITIES INVESTOR PROTECTION ACT OF 14 1970.—Section 16(14) of the Securities Investor Protec15 tion Act of 1970 (15 U.S.C. 78lll(14)) is amended by add16 ing at the end the following: ‘‘The term ‘security’ does 17 not include a payment stablecoin issued by a permitted 18 payment stablecoin issuer, as such terms are defined, re19 spectively, in section 2 of the Clarity for Payment 20 Stablecoins Act of 2023.’’. 21 SEC. 15. RECIPROCITY FOR STABLECOINS ISSUED IN OVER22 SEAS JURISDICTIONS. 23 The Federal Reserve, in collaboration with the Sec24 retary of the Treasury, shall create and implement recip25 rocal arrangements or other bilateral agreements between VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 56. 56 •S 394 IS 1 the United States and jurisdictions with substantially 2 similar payment stablecoin regulatory regimes to facilitate 3 international transactions and interoperability with United 4 States dollar-denominated stablecoins issued overseas. 5 SEC. 16. EFFECTIVE DATE. 6 (a) IN GENERAL.—This Act shall take effect on the 7 earlier of— 8 (1) 18 months after the date of enactment of 9 this Act; or 10 (2) the date that is 120 days after the date on 11 which the primary Federal payment stablecoin regu12 lators issue any final regulations implementing this 13 Act. 14 (b) NOTICE TO CONGRESS.—The primary Federal 15 payment stablecoin regulators shall notify Congress upon 16 beginning to process applications under this Act. 17 (c) SAFE HARBOR FOR PENDING APPLICATIONS.— 18 The primary Federal payment stablecoin regulators may 19 waive the application of the requirements of this Act for 20 a period not to exceed 12 months beginning on the effec21 tive date described under subsection (a), with respect to— 22 (1) a subsidiary of an insured depository insti23 tution, if the insured depository institution has an 24 application pending for the subsidiary to become a VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS

• 57. 57 •S 394 IS 1 permitted payment stablecoin issuer on that effective 2 date; or 3 (2) a nonbank entity with an application pend4 ing to become a Comptroller-regulated entity on that 5 effective date. Æ VerDate Sep 11 2014 17:41 Mar 05, 2025 Jkt 059200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6301 E:\BILLS\S394.IS S394 ssavage on LAPJG3WLY3PROD with BILLS