Sec. 4. Prudential requirements applicable to all payment stablecoin issuers
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/bill/118/s/4155/is/section-4·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
A person who provides custodial services, including subcustodian or other safekeeping services, for payment stablecoins shall— treat and deal with the payment stablecoins and cash of a customer as belonging to the customer; and take appropriate steps to protect the payment stablecoins and cash of a customer from any claims of creditors of the person. A person described in subsection
(a)may, for convenience, commingle and deposit the payment stablecoins and cash of a customer in an account holding the payment stablecoins and cash of more than 1 customer, but which is separate from the proprietary assets of the issuer. Such share of the payment stablecoins and cash of a customer in an account described in paragraph
(1)that shall be necessary to transfer, adjust, or settle a transaction or transfer of assets may be withdrawn and applied to such purposes, including the payment of commissions, taxes, storage fees, and other charges lawfully accruing in connection with the provision of custodial services. The Board, in consultation with the Comptroller and State bank supervisors, may prescribe, by rule or order, that customer payment stablecoins or cash may be commingled and deposited in customer accounts with any other assets received by a person described in subsection
(a)and required by the Board to be separately accounted for, treated as, and dealt with as belonging to customers. Payment stablecoin reserves required under sections 6(f) and 7(e) shall 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, bonds, or notes may be pledged as collateral for repurchase agreements with a maturity of not more than 7 days, if— the repurchase agreements are cleared by a central clearing counterparty that is approved by the Board; or the payment stablecoin issuer has obtained the approval of the Board and the Comptroller or State bank supervisor, as applicable. Not later than 10 business days after the end of each month, a payment stablecoin issuer shall disclose, in a publicly accessible manner, a summary description that includes— 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; and a report of all instances in which the payment stablecoin issuer failed to comply with any requirement under section 6(f) or 7(e). At the time of disclosure of the summary description under paragraph (1), the chief financial officer of a payment stablecoin issuer shall also file the summary description with the Board under penalty of perjury. Not later than 10 business days after receiving a filing under paragraph (2), the Board shall make the filing available on a website of the Board. The Comptroller or State bank supervisor shall, as part of the regular examination of the payment stablecoin issuer, verify the composition of the assets and the accuracy of the summary description under paragraph (1). A payment stablecoin issuer shall clearly disclose to customers that a payment stablecoin is not guaranteed by the United States Government and is not subject to deposit or share insurance by the Federal Deposit Insurance Corporation or the National Credit Union Administration. A payment stablecoin issuer that misrepresents a disclosure under subsection
(d)or
(e)shall be subject to the penalty under section 18(a)(4) of the Federal Deposit Insurance Act ( 12 U.S.C. 1828(a)(4) ) or section 709 of title 18, United States Code, as applicable. Not later than 1 business day after the receipt of a redemption request of a customer, a payment stablecoin issuer shall redeem an outstanding payment stablecoin of that payment stablecoin issuer at par in legal tender, as defined in section 5103 of title 31, United States Code. As determined by the Comptroller or State bank supervisor, in consultation with the Board, a payment stablecoin issuer may conduct only the following activities: Management of required payment stablecoin reserves under sections 6(f) and 7(e). Custodial services. Settlement and clearing. Post-trade services. Incidental activities relating to the issuance and redemption of payment stablecoins and management of required reserves. Except as otherwise provided under paragraph (2), whenever a payment stablecoin issuer, or an affiliate thereof, relies on or causes to be performed for itself, by contract, any services or activities authorized under this Act or that are necessary to the functioning of the payment stablecoin, whether on or off its premises— the person that performs such services or activities shall be subject to regulation and supervision by the Comptroller or State bank supervisor that supervises the payment stablecoin issuer, as applicable, and the Board, solely with respect to the limited scope of the performance of such services and activities; the person that performs such services or activities shall be subject to minimum financial resource requirements established by the Board, in consultation with the Comptroller and State bank supervisors, and shall be deemed a financial institution for purposes of title V of the Gramm-Leach-Bliley Act ( 15 U.S.C. 6801 et seq. ); not later than the sooner of 30 days after making a contract for the performance of such services or activities or the date of the performance of such services or activities, the payment stablecoin issuer shall notify the Comptroller or State bank supervisor, as applicable, and the Board of the existence of the relationship; for the purpose of ensuring compliance with the requirements under this subsection, the Board, after making best efforts to obtain necessary information from public sources and existing regulators, including the primary Federal or State regulator of the person performing such services or activities, if applicable, may conduct examinations of and require reports from such person solely with respect to the limited scope of the performance of services and activities subject to this subsection; and the Board shall enforce the requirements of this subsection as if the person providing such services or activities was a payment stablecoin issuer. Paragraph
(1)shall not apply to— a person performing the services or activities described in that paragraph that is subject to supervision or regulation by a primary financial regulatory agency described in subparagraph (A), (B), or
(C)of section 2(12) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5301(12) ), or a State bank supervisor; and a person that primarily engages in the business of providing hardware or software to facilitate the custody or safekeeping by a customer of the payment stablecoins of that customer. A payment stablecoin issuer or a person providing contracted services under subsection
(i)shall be treated as a financial institution for purposes of the Bank Secrecy Act. This subsection shall not apply to any person that primarily engages in the business of providing hardware or software to facilitate the custody or safekeeping by a customer of the payment stablecoins of that customer. The Board, in consultation with the Comptroller, State bank supervisors, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, shall monitor the use of assets authorized as payment stablecoin reserves under sections 6(f) and 7(e), including United States Treasury bills, bonds, and notes, and the impact of the use of such assets on collateral availability and the efficient functioning of the capital markets. Nothing in this subsection shall be construed as giving the Board supervisory or regulatory authority not otherwise granted under this Act.
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Sec. 4
Prudential requirements applicable to all payment stablecoin issuers
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