Sec. 601. Issuance of payment stablecoins
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Subtitle C of title VII of the Gramm-Leach-Bliley Act ( Public Law 106–102 ; 113 Stat. 1470) is amended by adding at the end the following: A depository institution may issue, redeem, and conduct all incidental activities relating to payment stablecoins in accordance with this section. A depository institution shall maintain high-quality liquid assets under this section equal to not less than 100 percent of the face amount of the liabilities of the institution on payment stablecoins issued by the institution.
In the case of an insured depository institution described in subsection (m)(1)(A) that engages in on-balance sheet lending activities, assets under this subsection shall equal not less than 100 percent of the face amount of the liabilities of the institution on payment stablecoins issued by the institution, with the assets held in balances at a Federal Reserve bank (which may include a segregated balance account), or, in the case of foreign withdrawable reserves, at a foreign central bank, in a special, custodial, or trust account, other off-balance sheet account, or in another equivalent manner that ensures the segregation of the assets in the event of receivership.
An insured depository institution may segregate the issuance and management of payment stablecoins into a separate depository institution affiliate under the same holding company structure. Eligible high-quality liquid assets under this section shall be comprised of the following: United States coins and currency and any other instrument that is legal tender, as defined in section 5103 of title 31, United States Code. Demand deposits at a depository institution, except that deposits in an insured depository institution shall not exceed the limit of deposit or share insurance available for that account, which may include pass through insurance, or shall be maintained in a special, custodial, or trust account or other off-balance sheet account held by the insured depository institution.
Balances held at a Federal Reserve bank, which may be held in a master account or segregated balance account. Foreign withdrawable reserves, as defined in section 249.3 of title 12, Code of Federal Regulations, consistent with any foreign unit of account in which the payment stablecoin is denominated or pegged. A security that is issued by, or unconditionally guaranteed as to the timely payment of principal and interest by, the Department of the Treasury, with an original maturity of 1 year or less.
A reserve repurchase agreement relating to a security described in paragraph (5). Any other high-quality, liquid asset determined to be consistent with safe and sound banking practices, as determined by the appropriate Federal banking agency or State bank supervisor. Not later than 10 business days after the end of each month, a depository institution shall disclose, in a publicly accessible manner, a summary description of the assets backing the payment stablecoin, the value of the assets, and the number of outstanding payment stablecoins, as of the last day of the month.
Such explanation shall be filed with the appropriate Federal banking agency or State bank supervisor under penalty of perjury by the chief financial officer of the institution. The depository institution shall also report on the summary description any instances in which the institution failed to comply with any requirement of subsection (b). As applicable, the appropriate Federal banking agency or State bank supervisor shall, as part of a regular examination of the depository institution, at the frequency otherwise required by law, verify the composition of the assets and the accuracy of the summary descriptions made under this subsection and reports under subsection (d).
As applicable, the appropriate Federal banking agency or State bank supervisor shall require a depository institution that issues a payment stablecoin to report, in detail, on the composition of the assets in each periodic report of condition, or in an alternative format approved by the Federal Financial Institutions Examination Council, at the frequency otherwise required by law. A depository institution shall, as applicable, obtain permission from the appropriate Federal banking agency or State bank supervisor, with an application submitted not less than 6 months before intended issuance of the payment stablecoin, but which may be submitted as part of a charter application.
As part of an application under this section, a depository institution shall develop a tailored recovery and resolution plan, consistent with the standards adopted under subsection (k)(1)(F), that would permit the orderly resumption of a safe and sound operation or the orderly wind-down of operations in the event of distress, including the redemption of all outstanding payment stablecoins. The application shall also contain a draft customer agreement, flow of funds explanation, a robust information technology plan and operational design of the payment stablecoin.
As applicable, the appropriate Federal banking agency or State bank supervisor shall render a decision on the application within 4 months of the date of filing, and shall approve the application unless— the payment stablecoin activities are not likely to be able to operate in a safe and sound manner; the depository institution does not have the required resources and expertise to manage the operation of the payment stablecoin, commensurate with the size and scale of projected operations; or the depository institution does not have required policies and procedures relating to material areas of the operation of the payment stablecoin activities.
Upon the demand of a customer, a depository institution shall redeem an outstanding payment stablecoin at par in the coins, currency, or other instruments that are legal tender, as defined in section 5103 of title 31, United States Code, or the similar laws of the jurisdiction of the unit of account in which the payment stablecoin is denominated or to which the value of the payment stablecoin is pegged. A depository institution may redeem a payment stablecoin issued by another depository institution at par, upon demand.
The Board of Governors of the Federal Reserve System, through the Federal Reserve banks, shall provide for the clearing and settlement of payment stablecoin liabilities among depository institutions under this section and shall ensure competitive equality in all clearing, settlement and related services. A depository institution shall also assess its ability to fulfill large redemptions without placing downward pressure on the market value of the payment stablecoin. The appropriate Federal banking agencies, in consultation with State bank supervisors, the Securities and Exchange Commission, and Commodity Futures Trading Commission, shall monitor use of the high-quality liquid assets authorized under subsection
(b)and the impact on collateral availability and the efficient functioning of the capital markets. In the event of the receivership of a depository institution that has issued a payment stablecoin under this section, a person that has a valid claim on a payment stablecoin issued by that institution shall have priority over all other claims on the institution with respect to any required payment stablecoin assets, including claims with respect to insured deposits, other than administrative costs incurred by the appropriate Federal banking agency or State bank supervisor, as applicable, relating to the receivership of the institution, if applicable. Consistent with subsection (f), a depository institution that redeems a payment stablecoin issued by a depository institution in receivership shall be considered to have a valid claim, with corresponding priority under this subsection, on a payment stablecoin issued by the institution in receivership. A depository institution may conduct all incidental activities relating to the issuance and redemption of payment stablecoins, which shall include the following: Management of required payment stablecoin assets in accordance with subsection (b). Making a market in payment stablecoins. Custodial services. Settlement and clearing. Post-trade services. All other activities consistent with a safe and sound operation, as determined by the appropriate Federal banking agency or State bank supervisor. Title V of the Gramm-Leach-Bliley Act ( 12 U.S.C. 6801 et seq. ) shall apply to the payment stablecoin activities of a depository institution under this section. The appropriate Federal banking agencies, in consultation with State bank supervisors, shall adopt rules to implement this section, including— capital treatment for depository institutions described in subsection (m)(1) in accordance with paragraph (2); liquidity, leverage, and interest rate risk; third-party service provider activities— including custodial wallet providers; and not including licensing or capital requirements for third-party service providers; management practices with respect to required payment stablecoin assets; appropriate operational, compliance, and information technology risk management; tailored recovery and resolution standards relating to payment stablecoins; and any other material topic. In accordance with section 5169(c)(3)(A) of the Revised Statutes, in determining capital and leverage requirements applicable to a depository institution that has no material assets other than required payment stablecoin assets under this section— the depository institution shall not be subject to section 171 of the Financial Stability Act of 2010 ( 12 U.S.C. 5371 ); and the appropriate Federal banking agencies shall take into account the significant differences between the risks of the assets of the institution and those of depository institutions with assets that consist primarily of commercial or consumer loans. Nothing in this section shall be construed to prohibit an entity operating under a State or Federal charter or license that is not a depository institution from issuing and redeeming a payment stablecoin and conducting all activities related to the management of such payment stablecoin consistent with a safe and sound operation, as determined by the appropriate regulator of the entity. The entity shall— be subject to the requirements of subsections
(b)and (c); and redeem an outstanding payment stablecoin at par in the coins, currency, or other instruments that are legal tender, as defined in section 5103, or the similar laws of the jurisdiction of the unit of account in which the payment stablecoin is denominated or to which the value of the payment stablecoin is pegged. In this section: The term depository institution has the meaning given the term in section 19(b)(1) of the Federal Reserve Act ( 12 U.S.C. 461(b)(1) ) and includes— an insured depository institution; or a depository institution operating under subsection
(c)of section 5169 of the Revised Statutes ( 12 U.S.C. 27 ), or a substantially similar State law, which is exclusively engaged in issuing payment stablecoins, providing safekeeping, trust or custodial services, or activities incidental to the foregoing. The term payment stablecoin has the meaning given the term in section 9801 of title 31, United States Code. The term segregated balance account includes an account of a depository institution with a Federal Reserve bank or a foreign central bank to which only required payment stablecoin assets are credited. .
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- Pub. L. 106-102
- 113 Stat. 1470
- 12 USC 6801
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Sec. 601
Issuance of payment stablecoins
Pub. L.Pub. L. 106-102
Stat.113 Stat. 1470
Cite12 USC 6801
Cites 6Cited by 0 across 0 sources