Sec. 7. Issuance of payment stablecoins by depository institutions
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A depository institution may issue and redeem payment stablecoins and conduct other activities in accordance with this section and section 4(g). An insured depository institution or bank holding company shall charter a separate depository institution to issue a payment stablecoin. A payment stablecoin issuer with the nominal value of all outstanding units of the stablecoin which exceeds $10,000,000,000 (as adjusted under section 3(b)) shall be a depository institution under this section, but nothing shall be construed as prohibiting a payment stablecoin issuer with less than $10,000,000,000 of nominal value of outstanding payment stablecoins from obtaining a depository institution charter under this section.
A depository institution shall submit, separately or as part of a charter application, to the Comptroller or a State bank supervisor, as applicable, an application for authorization to issue payment stablecoins. At the same time as the filing of an application under paragraph (1), a depository institution shall submit to the Board an application for authorization as a national payment stablecoin issuer. The following exclusive set of standards shall govern the decision of the Comptroller or State bank supervisor, as applicable, with respect to an application under paragraph (1):
The ability of the applicant to maintain required reserves backing the payment stablecoins required under this section. The financial resources, managerial or technical expertise, and governance of the applicant, including risk management and compliance. The benefit to the public, including relating to innovation and competition. The stability of the financial system of the United States. Not later than 180 days after the date of enactment of this Act, the Board, in consultation with the Comptroller and State bank supervisors, shall issue rules describing the content, documents, and materials required to be submitted to the Board that constitute a complete application, which shall include— a tailored recovery and resolution plan, consistent with the standards adopted under subsection (h)(1)(E), 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; a draft customer agreement; a flow of funds explanation; an information technology operations and security plan; and all materials required to comply with the standards under paragraph (2).
If the Comptroller or State bank supervisor, as applicable, determines that an applicant has submitted all of the materials required under this paragraph, the application shall be deemed complete. The Board shall provide a copy of each application under this section to the public (with any confidential information redacted) and provide for a 60-day public comment period during which the public may submit written comments on the application. The Board may waive the public comment requirement under subparagraph
(A)if the Board determines that it must act immediately to prevent the failure of a depository institution or the probable failure of an affiliate of the institution. Not later than 180 days after receiving a complete application pursuant to paragraph (3), the Board shall render a written decision to approve or deny the national payment stablecoin issuer application under paragraph (1), with appropriate findings, and the Comptroller or State bank supervisor shall render a decision on the charter application as otherwise provided by Federal or State law. The Board shall not approve an application under paragraph
(1)unless a majority of its members vote to approve. Upon the request of an applicant, the Board may extend the decision deadline of the Board under subparagraph (A). Nothing in this subsection shall be construed as prohibiting the Board from requesting further information from an applicant, but any request by the Board for further information from an applicant shall not affect the status of the application as complete, as provided under paragraph (3)(B). Upon authorization as a national payment stablecoin issuer under this section, a depository institution shall be subject to prudential supervision and regulation by the Comptroller or State bank supervisor, as applicable, and the Board, as specified under this Act. A depository institution that issues a payment stablecoin under this section shall maintain reserves of not less than 100 percent of the nominal value of all outstanding payment stablecoins, as of the end of each business day. A depository institution may maintain reserves comprised of— United States coins, currency, or other instrument that is legal tender described 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; balances held at a Federal Reserve bank; United States Treasury bills, notes, or bonds with a maturity date of 90 days or less after the date of purchase; and repurchase agreements with a maturity date of 7 days or less, that are backed by United States Treasury bills with a maturity date of 1 year or less from the date of the repurchase agreement. As applicable, the Comptroller or State bank supervisor and the Board shall require a depository institution that issues a payment stablecoin to report, in detail, on the composition of the assets and liabilities 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 for depository institutions. In supervising a depository institution under this section, the Comptroller or State bank supervisor, as applicable, and the Board shall, to the fullest extent possible, use existing reports and other supervisory information and avoid duplication of examination activities, reporting requirements, and requests for information. The Comptroller or State bank supervisor, as applicable, and the Board shall make regular examinations of a depository institution under this section on a regular basis in order to inform the Comptroller or State bank supervisor, as applicable, and the Board of— the nature of the operations and financial condition of the depository institution and any affiliates; the financial, operational, and other risks within the depository institution that may pose a threat to— the safety and soundness of the depository institution; or the stability of the financial system of the United States; and the systems of the depository institution for monitoring and controlling the risks described in subparagraph (B). A depository institution that issues a payment stablecoin under this section shall be deemed to be a financial institution for the purposes of title V of the Gramm-Leach-Bliley Act ( 15 U.S.C. 6801 et seq. ). The Board, in consultation with the Comptroller, State bank supervisors, and the Financial Crimes Enforcement Network, shall adopt rules to implement this section, including— capital treatment for depository institutions under this section, which shall be not greater than the total sum of— the greater of— projected receivership costs; or projected costs of operation over a 3-year period; and the sum of— operational risk, as provided under paragraph (2)(C); and collateral reasonably needed to address payment system risk; managing liquidity, leverage, and market and interest rate risk; management practices with respect to required payment stablecoin assets; appropriate operational, compliance, and information technology risk management, including Bank Secrecy Act and sanctions compliance; tailored recovery and resolution standards relating to payment stablecoins; and third-party risk management, including appropriate governance of relationships with crypto asset exchanges. In determining capital 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 ); the Board, in consultation with the Comptroller and State bank supervisors, 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; and assessment of operational risk shall occur commensurate with the size and complexity of the depository institution. Nothing in this Act may be construed as— preventing the Comptroller or a State bank supervisor which charters a depository institution from imposing additional or more strict regulatory standards on the institution for issuing payment stablecoins; making inapplicable the provisions of section 24(j) of the Federal Deposit Insurance Act ( 12 U.S.C. 1831a(j) ) to a depository institution, including the ability of a depository institution to operate under home State law on an interstate basis without further licensure, registration, or authorization, as provided in that Act; or requiring a depository institution to obtain deposit insurance to issue a payment stablecoin under this section or to conduct incidental activities under this section. Not later than 2 years after the date of enactment of this Act, the Board, in consultation with the Comptroller and State bank supervisors, shall issue rules— establishing a process for a non-depository trust company registered under section 6 to convert to a depository institution under this section; setting forth an expedited process for approval that is consistent with this section; and providing for the implementation of the plan required to be developed under subsection
(l)of section 6 of this Act. A bank holding company or insured depository institution shall only conduct payment stablecoin activities authorized by this Act within a depository institution subsidiary of the insured depository institution or a bank holding company.
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Sec. 7
Issuance of payment stablecoins by depository institutions
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