Sec. 4. Requirements for issuing payment stablecoins
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/bill/119/s/919/is/section-4·A 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 outstanding payment stablecoins of the permitted payment stablecoin issuer on an at least a 1 to 1 basis, with reserves comprising— United States coins and currency (including Federal reserve notes) or money standing to the credit of an account with a Federal Reserve Bank; funds held as demand deposits (or other deposits that may be withdrawn upon request at any time) or insured shares at an insured depository institution (including any foreign branches and agencies of an insured depository institution), subject to limitations established by the Corporation and the National Credit Union Administration, as applicable, to address safety and soundness risks of such insured depository institution;
Treasury bills, notes, or bonds— with a remaining maturity of 93 days or less; or issued with a maturity of 93 days or less; repurchase agreements with the permitted payment stablecoin issuer acting as a seller of securities and with an overnight maturity that are backed by Treasury bills with a maturity of 93 days or less; reverse repurchase agreements with the permitted payment stablecoin issuer acting as a purchaser of securities and with an overnight maturity that are collateralized by Treasury notes, bills, or bonds on an overnight basis, subject to overcollateralization in line with standard market terms, that are— tri-party; centrally cleared through a clearing house registered with the Securities and Exchange Commission; or bilateral with a counterparty that the issuer has determined to be adequately creditworthy even in the event of severe market stress; securities issued by an investment company registered under section 8(a) of the Investment Company Act of 1940 ( 15 U.S.C. 80a–8(a) ) that operates as a money market fund in compliance with rule 2a–7 issued under that Act (or any successor rule) and that are invested solely in underlying assets described in clauses
(i)through
(iv)of subparagraph (A); any other similarly liquid asset approved by the primary Federal payment stablecoin regulator, in consultation with the State payment stablecoin regulator, if applicable, of the permitted payment stablecoin issuer; or any reserve described in clauses
(i)through
(vii)in tokenized form, provided that such reserves comply with all applicable laws and regulations; 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 required under paragraph (1)(A) may not be pledged, rehypothecated, or reused by the permitted payment stablecoin issuer, either directly or indirectly, except for the purpose of— satisfying margin obligations in connection with investments in permitted reserves under clauses
(iv)and
(v)of paragraph (1)(A); satisfying obligations associated with the use or receipt of provision of standard custodial services; or creating liquidity to meet reasonable expectations of requests to redeem payment stablecoins, such that reserves in the form of Treasury bills may be sold as purchased securities for repurchase agreements with a maturity of 93 days or less, provided that either— the repurchase agreements are cleared by a clearing agency registered with the Securities and Exchange Commission; or the permitted payment stablecoin issuer receives the prior approval of its primary Federal payment stablecoin regulator or State payment stablecoin regulator, as applicable. 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 a certification as to the accuracy of the monthly report to, as applicable— the primary Federal payment stablecoin regulator of the permitted payment stablecoin issuer; or the State payment stablecoin regulator of the permitted payment stablecoin issuer. 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, or in the case of a State qualified payment stablecoin issuer, the State payment stablecoin regulator shall, consistent with section 18, issue— capital requirements applicable to permitted payment stablecoin issuers that— are tailored to the business model and risk profile of permitted payment stablecoin issuers; do not exceed requirements which are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers; and in the case of the primary Federal payment stablecoin regulators, if the primary Federal payment stablecoin regulators determine that a capital buffer is necessary to ensure the ongoing operations of permitted payment stablecoin issuers, may include capital buffers that are tailored to the business model and risk profile of permitted payment stablecoin issuers; regulations implementing the liquidity standard under clause (i); reserve asset diversification and interest rate risk management standards applicable to permitted payment stablecoin issuers that— are tailored to the business model and risk profile of permitted payment stablecoin issuers; and do not exceed standards which are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers; and appropriate operational, compliance, and information technology risk management standards, including Bank Secrecy Act and sanctions compliance, that— are tailored to the business model and risk profile of permitted payment stablecoin issuers; and are consistent with applicable law. Nothing in this paragraph shall be construed to limit— the authority of the primary Federal regulators, in prescribing standards under this paragraph, to tailor or differentiate among issuers on an individual basis or by category, taking into consideration the capital structure, business model risk profile, complexity, financial activities (including financial activities of subsidiaries), size, and any other risk related factors of permitted payment stablecoin issuers that the primary Federal regulator determines appropriate, provided that such tailoring or differentiation occurs without respect to whether a permitted payment stablecoin issuer is regulated by a State payment stablecoin regulator; or the supervisory, regulatory, or enforcement authority of a Federal banking agency to further the safe and sound operation of an institution for which the Federal banking agency is the appropriate Federal banking agency (as defined under section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 )). In this subparagraph— appropriate Federal banking agency has the meaning given that term in section 3(q) of the Federal Deposit Insurance Act ( 12 U.S.C. 1813(q) ); and depository institution holding company has the meaning given that term under section 171(a)(3) of the Financial Stability Act of 2010 ( 12 U.S.C. 5371(a)(3) ). With respect to the promulgation of rules under subparagraph
(A)and clauses
(iii)and
(iv)of this subparagraph, section 171 of the Financial Stability Act of 2010 ( 12 U.S.C. 5371 ) shall not apply. Any rule issued by an appropriate Federal banking agency that imposes, on a consolidated basis, a leverage capital requirement or risk-based capital requirement with respect to an insured depository institution or depository institution holding company shall provide that, for purposes of such leverage capital requirement or risk-based capital requirement, any insured depository institution or depository institution holding company that includes, on a consolidated basis, a permitted payment stablecoin issuer shall not be required to hold, with respect to such permitted payment stablecoin issuer and its assets and operations, any amount of regulatory capital in excess of the capital that such permitted payment stablecoin issuer must maintain under the capital requirements promulgated pursuant to paragraph (1)(A)(i). Not later than the earlier of the rulemaking deadline under section 18 or the date the Federal payment stablecoin regulators issue regulations to carry out this section, each appropriate Federal banking agency shall amend or otherwise modify any regulation of the Federal banking agency described in clause
(iii)so that such regulation, as amended or otherwise modified, complies with clause
(iii)of this subparagraph. A permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the Bank Secrecy Act, and as such, shall be subject to all Federal laws applicable to a financial institution located in the United States relating to economic sanctions, prevention of money laundering, customer identification, and due diligence, including— maintenance of an effective anti-money laundering and economic sanctions compliance program, which shall include appropriate risk assessments, verification of sanctions lists and designation of an officer to supervise the programs; retention of appropriate records of payment stablecoin transactions; monitoring and reporting suspicious activity; policies and procedures to block, freeze, and reject specific or impermissible transactions that violate Federal or State laws, rules, or regulations; and maintenance of an effective customer identification program, including identification and verification of account holders with the permitted payment stablecoin issuer, high value transactions and appropriate enhanced due diligence. The Financial Crimes Enforcement Network shall adopt rules, tailored to the size and complexity of the permitted payment stablecoin issuer, to implement subparagraph (A). The Secretary of the Treasury— shall, to the best of the Secretary’s ability, coordinate with a permitted payment stablecoin issuer before taking any action to block and prohibit transactions in property and interests in property of a foreign person to ensure that the permitted payment stablecoin issuer is able to effectively block a digital asset of the foreign person upon issue of the digital asset; and is not required to notify any permitted payment stablecoin issuer of any intended action described in clause
(i)prior to taking such action. A permitted payment stablecoin issuer may issue payment stablecoins only if the issuer has the technological capability to comply and will comply with the terms of any lawful order. A foreign payment stablecoin that is not licensed under this Act may not be publicly offered, sold, or otherwise made available for trading in the United States unless the payment stablecoin issuer has the technological capability to comply and will comply with the terms of any lawful order. In this paragraph, the term lawful order means any final and valid writ, process, order, rule, decree, command, or other requirement issued or promulgated under Federal law, issued by a court of competent jurisdiction or by an authorized Federal agency pursuant to its statutory authority, that— requires the permitted payment stablecoin issuer to seize, freeze, burn, or prevent the transfer of payment stablecoins issued by the permitted payment stablecoin issuer; specifies the digital assets or accounts subject to blocking with reasonable particularity; and is subject to judicial or administrative review or appeal as provided by law. Not later than 1 year after the date of enactment of this Act, the Secretary of the Treasury 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 on the coordination with permitted payment stablecoin issuers required under subparagraph (A). A permitted payment stablecoin issuer may only— issue payment stablecoins; redeem payment stablecoins; manage related reserves, including purchasing, selling, and holding reserve assets or providing custodial services for reserve assets, consistent with State and Federal law; provide custodial or safekeeping services for payment stablecoins, required reserves, or private keys of payment stablecoins, consistent with this Act; and undertake other activities that directly support any of the activities described in clauses
(i)through (iv). Nothing in subparagraph
(A)shall prevent a permitted payment stablecoin issuer from engaging in non-payment stablecoin activities that are allowed by the primary Federal payment stablecoin regulator or the State payment stablecoin regulator, as applicable. A permitted payment stablecoin issuer may not provide services to a customer on the condition that the customer obtain an additional paid product or service from the permitted payment stablecoin issuer, or any of its subsidiaries, or agree to not obtain an additional product or service from a competitor. The Board may issue such regulations as are necessary to carry out this subparagraph, and, in consultation with the Comptroller and the Corporation, may by regulation or order, permit such exceptions to clause
(i)as the Board considers will not be contrary to the purpose of this Act. A Federal qualified nonbank payment stablecoin issuer shall be regulated and supervised exclusively by the Comptroller, which shall have authority, in coordination with other relevant primary Federal payment stablecoin regulators and State payment stablecoin regulators, to issue such regulations and orders as necessary to ensure financial stability and implement this subsection. Section 324(b) of the Revised Statutes ( 12 U.S.C. 1(b) ) is amended by adding at the end the following: The Comptroller of the Currency shall, in coordination with other relevant regulators and consistent with section 18 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 , issue such regulations and orders as necessary to ensure financial stability and implement section 4(a) of that Act. . A permitted payment stablecoin issuer with more than $50,000,000,000 in consolidated total outstanding issuance, that is not subject to the reporting requirements under sections 13(a) or 15(d) of the Securities and Exchange Act of 1934 ( 15 U.S.C. 78m , 78o(d)), shall prepare, in accordance with generally accepted accounting principles, an annual financial statement, which shall include the disclosure of any related party transactions, as defined by such generally accepted accounting principles. A registered public accounting firm shall perform an audit of the annual financial statements described in clause (i). An audit described in clause
(ii)shall be conducted in accordance with all applicable auditing standards established by the Public Company Accounting Oversight Board, including those relating to auditor independence, internal controls, and related party transactions. Nothing in this subparagraph shall be construed to limit, alter, or expand the jurisdiction of the Public Company Accounting Oversight Board over permitted payment stablecoin issuers or registered public accounting firms. Each permitted payment stablecoin issuer required to prepare an audited annual financial statement under subparagraph
(A)shall: make such audited financial statements publicly available on the website of the permitted payment stablecoin issuer; and submit such audited financial statements annually to their primary Federal payment stablecoin regulator. The primary Federal payment stablecoin regulators may consult with the Public Company Accounting Oversight Board to determine best practices for determining audit oversight and to detect fraud, material misstatements, and other financial misrepresentations that could mislead permitted payment stablecoin holders. Notwithstanding the Federal regulatory framework established under subsection (a), a State qualified payment stablecoin issuer with a consolidated total outstanding issuance of not more than $10,000,000,000 may opt for regulation under a State-level regulatory regime, provided that the State-level regulatory regime is substantially similar to the Federal regulatory framework under that subsection. The Secretary of the Treasury shall, through notice and comment rulemaking, establish broad based principles for determining whether a State-level regulatory regime is substantially similar to the Federal regulatory framework under subsection (a). State payment stablecoin regulators shall review State-level regulatory regimes according to the principles established by the Secretary of the Treasury under paragraph
(2)and for the purposes of establishing any necessary cooperative agreements to implement section 7(f). Subject to subparagraph (B), not later than 1 year after the effective date of this Act, a State payment stablecoin regulator shall submit to the Secretary of the Treasury an initial certification that the State-level regulatory regime meets the criteria for substantial similarity established pursuant to paragraph (2). The initial certification required under subparagraph
(A)shall contain, in a form prescribed by the Secretary of the Treasury, an attestation that the State-level regulatory regime meets the criteria for substantial similarity established pursuant to paragraph (2). Not later than a date to be determined by the Secretary each year, a State payment stablecoin regulator shall submit to the Secretary of the Treasury an additional certification that confirms the accuracy of initial certification submitted under subparagraph (A). If a State payment stablecoin regulator determines that the criteria established under paragraph
(2)are not met and the State payment stablecoin regulator does not submit a certification under paragraph (4), then a permitted payment stablecoin issuer operating under this subsection shall be subject to the Federal regulatory framework as described in subsection (c), notwithstanding the total issuance threshold therein. Not later than 30 days after the date of receipt of a certification under paragraph (4), the Secretary may reject the certification if the Secretary determines that the State-level regulatory regime is not substantially similar to the Federal regulatory framework under subsection (a), and the permitted payment stablecoin issuer shall be subject to the Federal regulatory framework as described in subsection (c), notwithstanding the total issuance threshold therein. A State payment stablecoin regulator may challenge the determination of the Secretary of the Treasury under this paragraph in the United States Court of Appeals for the District of Columbia Circuit. The Secretary of the Treasury shall publish and maintain in the Federal Register and on the website of the Department of the Treasury a list of States that have submitted initial certifications and recertifications under paragraph (4). A State chartered depository institution that is a State qualified payment stablecoin issuer with a payment stablecoin with a consolidated total outstanding issuance of more than $10,000,000,000 shall— not later than 360 days after the payment stablecoin reaches such threshold, transition to the Federal regulatory framework of the primary Federal payment stablecoin regulator of the State chartered depository institution, which shall be administered by the State payment stablecoin regulator of the State chartered depository institution and the primary Federal payment stablecoin regulator acting jointly; or beginning on the date the payment stablecoin reaches such threshold, cease issuing new payment stablecoins until the payment stablecoin is under the $10,000,000,000 consolidated total outstanding issuance threshold. A State qualified payment stablecoin issuer not described in paragraph
(1)with a payment stablecoin with a consolidated total outstanding issuance of more than $10,000,000,000 shall— not later than 360 days after the payment stablecoin reaches such threshold, transition to the Federal regulatory framework under subsection
(a)administered by the State payment stablecoin regulator of the State qualified payment stablecoin issuer; or beginning on the date the payment stablecoin reaches such threshold, cease issuing new payment stablecoins until the payment stablecoin is under the $10,000,000,000 consolidated total outstanding issuance threshold. Notwithstanding paragraphs
(1)and (2), the applicable primary Federal payment stablecoin regulator may permit a State qualified payment stablecoin issuer with a payment stablecoin with a consolidated total outstanding issuance of more than $10,000,000,000 to remain solely supervised by a State payment stablecoin regulator. The primary Federal payment stablecoin regulator shall consider the following exclusive criteria in determining whether to issue a waiver under this paragraph: The capital maintained by the State qualified payment stablecoin issuer. The past operations and examination history of the State qualified payment stablecoin issuer. The experience of the State payment stablecoin regulator in supervising payment stablecoin and digital asset activities. The laws and rules applicable to, and the supervisory framework of, the State qualified payment stablecoin issuer with respect to payment stablecoins and digital assets. A State qualified payment stablecoin issuer subject to Federal oversight under paragraph
(1)or
(2)of this subsection that does not receive a waiver under this paragraph shall continue to be supervised by the State payment stablecoin regulator of the State qualified payment stablecoin issuer along jointly with the primary Federal payment stablecoin regulator. Nothing in this subsection shall require the State qualified payment stablecoin issuer to convert to a Federal charter. Payment stablecoins shall not be backed by the full faith and credit of the United States, guaranteed by the United States Government, subject to deposit insurance by the Federal Deposit Insurance Corporation, or subject to share insurance by the National Credit Union Administration. It shall be unlawful to represent that payment stablecoins are backed by the full faith and credit of the United States, guaranteed by the United States Government, or subject to Federal deposit insurance or Federal share insurance. A violation of subparagraph
(A)shall be considered a violation of 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. It shall be unlawful to market a digital asset in the United States as a payment stablecoin unless the digital asset is issued pursuant to this Act. No individual who has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud may serve as— an officer of a payment stablecoin issuer; or a director of a payment stablecoin issuer. Whoever knowingly participates in a violation of paragraph
(1)shall be fined not more than $1,000,000 for each such violation, imprisoned for not more than 5 years; or both. If a Federal payment stablecoin regulator has reason to believe that any person has knowingly violated paragraph (1), the Federal payment stablecoin regulator shall refer the matter to the Attorney General. Consistent with section 18, the primary Federal payment stablecoin regulators and State payment stablecoin regulators shall issue such regulations as may be necessary to establish a payment stablecoin regulatory framework 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, if not issued by a State payment stablecoin regulator.
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- 15 USC 80a–8(a)
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Sec. 4
Requirements for issuing payment stablecoins
Cite15 USC 80a–8(a)
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