Sec. 11. Treatment of payment stablecoin issuers in insolvency proceedings
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Subject to section 507(e) of title 11, United States Code, as added by subsection (d), in any insolvency proceeding of a permitted payment stablecoin issuer under Federal or State law, including any proceeding under that title and any insolvency proceeding administered by a State payment stablecoin regulator with respect to a permitted payment stablecoin issuer— the claim of a person holding payment stablecoins issued by the permitted payment stablecoin issuer shall have priority, on a ratable basis with the claims of other persons holding such payment stablecoins, over the claims of the permitted payment stablecoin issuer and any other holder of claims against the permitted payment stablecoin issuer, with respect to required payment stablecoin reserves; notwithstanding any other provision of law, including the definition of claim under section 101(5) of title 11, United States Code, any person holding a payment stablecoin issued by the permitted payment stablecoin issuer shall be deemed to hold a claim; and the priority under paragraph
(1)shall not apply to claims other than those arising directly from the holding of payment stablecoins. Section 101 of title 11, United States Code, is amended by adding after paragraph
(40B)the following: The terms payment stablecoin and permitted payment stablecoin issuer have the meanings given those terms in section 2 of the GENIUS Act . . Section 362 of title 11, United States Code, is amended— in subsection (a)— in paragraph (7), by striking and ; in paragraph (8), by striking the period and inserting ; and ; and by adding at the end the following: the redemption of payment stablecoins issued by the permitted payment stablecoin issuer, from payment stablecoin reserves required to be maintained under section 4 of the GENIUS Act . ; and in subsection (d)— in paragraph (3)(B)(ii), by striking or at the end; in paragraph (4)(B), by striking the period at the end and inserting ; or ; and by inserting after paragraph
(4)the following: with respect to the redemption of payment stablecoins held by a person, if the court finds, subject to the motion and attestation of the permitted payment stablecoin issuer, which shall be filed on the petition date or as soon as practicable thereafter, there are payment stablecoin reserves available for distribution on a ratable basis to similarly situated payment stablecoin holders, provided that the court shall use best efforts to enter a final order to begin distributions under this paragraph not later than 14 days after the date of the required hearing. . Section 507 of title 11, United States Code, is amended— in subsection (a), in the matter preceding paragraph (1), by striking The following and inserting Subject to subsection (e), the following ; and by adding at the end the following: Notwithstanding subsection (a), if a payment stablecoin holder is not able to redeem all outstanding payment stablecoin claims from required payment stablecoin reserves maintained by the permitted payment stablecoin issuer, any such remaining claim arising from a person's holding of a payment stablecoin issued by the permitted payment stablecoin issuer shall be a claim against the estate and shall have first priority over any other claim, including over any expenses and claims that have priority under that subsection, to the extent compliance with section 4 of the GENIUS Act would have required additional reserves to be maintained by the permitted payment stablecoin issuer for payment stablecoin holders. . Section 541(b) of title 11, United States Code, is amended— in paragraph (9), in the matter following subparagraph (B), by striking or at the end; in paragraph (10)(C), by striking the period and inserting ; or ; and by inserting after paragraph
(10)the following: required payment stablecoin reserves under section 4 of the GENIUS Act , provided that notwithstanding the exclusion of such reserves from the property of the estate, section 362 of this title shall apply to such reserves. . Section 1109 of title 11, United States Code, is amended by adding at the end the following: The Comptroller of the Currency or State payment stablecoin regulator (as defined in section 2 of the GENIUS Act ) shall raise, and shall appear and be heard on, any issue, including the protection of customers, in a case under this chapter in which the debtor is a permitted payment stablecoin issuer. . In accordance with otherwise applicable law, an insolvency proceeding with respect to a permitted payment stablecoin issuer shall occur as follows: A depository institution (as defined in section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 )) shall be resolved by the Federal Deposit Insurance Corporation, National Credit Union Administration, or State payment stablecoin regulator, as applicable. A subsidiary of a depository institution (as defined in section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 )) or a nonbank entity may be considered a debtor under title 11, United States Code. The primary Federal payment stablecoin regulators shall perform a study of the potential insolvency proceedings of permitted payment stablecoin issuers, including an examination of— existing gaps in the bankruptcy laws and rules for permitted payment stablecoin issuers; the ability of payment stablecoin holders to be paid out in full in the event a permitted payment stablecoin issuer is insolvent; and the utility of orderly insolvency administration regimes and whether any additional authorities are needed to implement such regimes. Not later than 3 years after the date of enactment of this Act, the primary Federal payment stablecoin regulators shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report that contains all findings of the study under paragraph (1), including any legislative recommendations.
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Sec. 11
Treatment of payment stablecoin issuers in insolvency proceedings
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