Sec. 4. Requirements for issuing payment stablecoins
656 words·~3 min read·
/bill/118/hr/4766/ih/section-4A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Permitted payment stablecoin issuers shall— maintain reserves backing the issuer’s payment stablecoins outstanding on an at least one to one basis, with reserves comprising— United States coins and currency (including Federal reserve notes); funds held as insured demand deposits or insured shares at insured depository institutions, subject to limitations established by the Corporation and the National Credit Union Administration, respectively, to address safety and soundness risks of such insured depository institutions;
Treasury bills with a maturity of 90 days or less; repurchase agreements with a maturity of 7 days or less that are backed by Treasury bills with a maturity of 90 days or less; central bank reserve deposits; or such other assets as— the primary Federal payment stablecoin regulator determines appropriate; or in the case of a State qualified payment stablecoin issuer, the State payment stablecoin regulator determines appropriate. publicly disclose the issuer’s redemption policy; establish procedures for timely redemption of outstanding payment stablecoins; and publish the monthly composition of the issuer’s reserves on the website of the issuer, containing— the total number of outstanding payment stablecoins issued by the issuer; and the amount and composition of the reserves described under subparagraph (A).
Reserves described under paragraph (1)(A) may not be pledged, rehypothecated, or reused, except for the purpose of creating liquidity to meet reasonable expectations of requests to redeem payment stablecoins, such that reserves in the form of Treasury bills may be pledged as collateral for repurchase agreements with a maturity of 90 days or less, provided that either— the repurchase agreements are cleared by a central clearing counterparty that is approved by the primary Federal payment stablecoin regulator; or the permitted payment stablecoin issuer receives the prior approval of the primary Federal payment stablecoin regulator.
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. Each month, the Chief Executive Officer and Chief Financial Officer of a permitted payment stablecoin issuer shall submit an certification as to the accuracy of the monthly report to— the primary Federal payment stablecoin regulator; or in the case of a State qualified payment stablecoin issuer, to the State payment stablecoin regulator.
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. The primary Federal payment stablecoin regulators shall, jointly, issue— capital requirements applicable to permitted payment stablecoin issuers, which may not exceed what is sufficient to ensure the permitted payment stablecoin issuer’s ongoing operations; liquidity requirements applicable to permitted payment stablecoin issuers, which may not exceed what is sufficient to ensure the financial integrity of the permitted payment stablecoin issuer and the ability of the issuer to meet the financial obligations of the issuer, including redemptions; and risk management requirements applicable to permitted payment stablecoin issuers, tailored to the business model and risk profile of the permitted payment stablecoin issuer. A permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the Bank Secrecy Act. A permitted payment stablecoin issuer may only issue payment stablecoins, redeem payment stablecoins, manage related reserves (including purchasing and holding reserve assets), provide custodial or safekeeping services for payment stablecoins or private keys of payment stablecoins, and undertake other functions that directly support the work of issuing and redeeming payment stablecoins. The primary Federal payment stablecoin regulators may issue such orders and regulations as may be necessary to administer and carry out the requirements of this section, including to establish conditions, and to prevent evasions thereof. All regulations issued to carry out this section shall be issued jointly by the primary Federal payment stablecoin regulators. Not later than the end of the 180-day period beginning on the date of enactment of this Act, the Federal payment stablecoin regulators shall issue regulations to carry out this section.