Sec. 2. Definitions

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A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

In this Act: The term algorithmic payment stablecoin means a crypto asset that— is represented by the issuer, or is otherwise designed to create the reasonable expectation, that the crypto asset will maintain a stable value relative to the value of a fixed amount of United States dollars; and relies on the use of an algorithm that adjusts the supply of the crypto asset in response to changes in market demand for the crypto asset to maintain the expectation that the crypto asset will maintain a stable value.

The term applicable payment stablecoin regulator means, with respect to a payment stablecoin issuer— in the case of a depository institution that issues a payment stablecoin under section 7, consistent with section 11(s)— the Comptroller or State bank supervisor, as applicable; or the Board; and in the case of a State non-depository trust company that issues a payment stablecoin under section 6, the applicable State bank supervisor and the Board, acting jointly. The term Bank Secrecy Act means— section 21 of the Federal Deposit Insurance Act ( 12 U.S.C. 1829b ); chapter 2 of title I of Public Law 91–508 ( 12 U.S.C. 1951 et seq. ); and subchapter II of chapter 53 of title 31, United States Code.

The term Board means the Board of Governors of the Federal Reserve System. The term Comptroller means the Comptroller of the Currency. The term controlling interest means a circumstance when a person, directly or indirectly, or acting through or in concert with 1 or more persons— owns, controls, or has the power to vote 25 percent or more of any class of voting securities of a depository institution or holding company thereof; controls in any manner the election of a majority of the directors of a depository institution or holding company thereof; or has the power to exercise a controlling influence over the management or policies of the depository institution or holding company thereof.

The term crypto asset means a natively electronic asset that confers economic, proprietary, or access rights or powers and is recorded using cryptographically secured distributed ledger technology, or any similar analog. The term depository institution — has the meaning given that term in section 19(b)(1) of the Federal Reserve Act ( 12 U.S.C. 461(b)(1) ); and includes a depository institution operating under subsection (a)(2) of section 5169 of the Revised Statutes ( 12 U.S.C. 27 ), as amended by this Act, 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 distributed ledger means technology that enables the operation and use of a ledger that— is shared across a set of distributed nodes that participate in a network and store a complete or partial replica of the ledger, which may be public or private; is synchronized between the nodes; has data appended to the ledger by following the specified consensus mechanism of the ledger; may be accessible to anyone or restricted to a subset of participants; and may require participants to have authorization to perform certain actions or require no authorization.

With respect to a payment stablecoin issuer, the term institution-affiliated party means— any director, officer, employee, or person with a controlling interest in, or acting as an agent for, the payment stablecoin issuer; a consultant, joint venture partner, and any other person that participates in the conduct of the affairs of the payment stablecoin issuer; or any independent contractor providing services for the payment stablecoin issuer, including any attorney, appraiser, or accountant.

The term insured depository institution means— an insured depository institution, as defined in section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ); and an insured credit union, as defined in section 101 of the Federal Credit Union Act ( 12 U.S.C. 1752 ). The term national payment stablecoin issuer means a depository institution chartered by the Comptroller or a State bank supervisor which is approved by the Board to conduct payment stablecoin activities under section 7.

The term payment stablecoin means crypto asset— that is, or is designed to be, used as a means of payment or settlement; the issuer of which— is obligated to convert, redeem, or repurchase for a fixed amount of United States dollars; or represents, or creates the reasonable expectation, that the crypto asset will maintain a stable value relative to the value of a fixed amount of United States dollars; and that is not— United States coins, a Federal Reserve note or other lawful money (as that term is used in the Federal Reserve Act ( 12 U.S.C. 411 )), money issued by a central bank, or money issued by an intergovernmental organization pursuant to an agreement by one or more governments; or a security issued by an investment company registered under section 8(a) of the Investment Company Act of 1940 ( 15 U.S.C. 80a–8(a) ).

The term payment stablecoin issuer means— a non-depository trust company chartered by a State bank supervisor that is registered, or required to be registered, with the Board to issue payment stablecoins; or a depository institution chartered by the Comptroller or a State bank supervisor that is authorized, or required to be authorized, to become a national payment stablecoin issuer by the Board to issue payment stablecoins, including a depository institution subsidiary of an insured depository institution or bank holding company.

The term State bank supervisor has the meaning given that term in section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ). The term subcustodian means a person that maintains actual possession or control of the private keys relating to a payment stablecoin and has a contractual relationship with the custodian of record of the payment stablecoin.

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