,,ii #aagth ,,congress #b;d ,session ,s4 #ecdj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #ba1 #bjbb,mr4 ,toomey introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to provide a regulatory framework and consumer protections for the issuance of payment stablecoins1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,stablecoin ,transparency of ,reserves and ,uniform ,safe ,transactions ,act of #bjbb or the ,stablecoin ,,trust ,act of #bjbb4 #b4 ,definitions ,in this ,act3 7#a7 ,appropriate ,federal banking agency ,the term appropriate ,federal banking agency-- 7,a7 has the meaning given the term in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac72 and 7,b7 includes the ,national ,credit ,union ,administration4 7#b7 ,deposit ,the term deposit has the meaning given the term in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7#c7 ,digital asset ,the term digital asset means any digital representation of value that is recorded on a cryptographically secured distributed ledger4 7#d7 ,insured depository institution ,the term insured depository institution has the meaning given the term in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7#e7 ,level #a high-quality liquid asset ,the term level #a high-quality liquid asset means an asset described in section #bdi4bj7;a7 of title #ab1 ,code of ,federal ,regulations4 7#f7 ,money transmitting business ,the term money transmitting business has the meaning given the term in section #eccj of title #ca1 ,united ,states ,code4 7#g7 ,national limited payment stablecoin issuer ,the term national limited payment stablecoin issuer means a person that-- 7,a7 issues payment stablecoins2 and 7,b7 receives a license from1 and becomes subject to the regulatory standards established by1 the ,office of the ,comptroller of the ,currency under section #ebdd;,a of the ,revised ,statutes1 as added by section #f of this ,act4 7#h7 ,non-depository trust company ,the term non-depository trust company means a trust company that does not receive deposits other than trust funds4 7#i7 ,payment stablecoin ,the term payment stablecoin means a digital asset that-- 7,a7 is designed to maintain a stable value relative to a fiat currency or currencies2 7,b7 is convertible directly to fiat currency by the issuer2 7,c7 is designed to be widely used as a medium of exchange2 7,d7 is issued by a centralized entity2 7,e7 does not inherently pay interest to the holder2 and 7,f7 is recorded on a public distributed ledger4 7#aj7 ,payment stablecoin issuer ,the term payment stablecoin issuer means a person that issues a payment stablecoin under section #c7;b7 of this ,act4 7#aa7 ,registered public accounting firm ,the term registered public accounting firm has the meaning given the term in section #b7;a7 of the ,sarbanes-,oxley ,act of #bjjb 7#ae ,u4,s4,c4 #gbja7;a774 7#ab7 ,state banking supervisor ,the term ,state banking supervisor means the commissioner1 superintendent1 or similar official of a ,state who is responsible for the chartering1 regulation1 and examination of depository institutions1 trust companies1 money transmitting businesses1 and similar entities within the ,state4 #c4 ,issuance of payment stablecoins 7a7 ,in general ,except as provided in subsection 7b71 it shall be unlawful for any person to issue a payment stablecoin4 7b7 ,exceptions ,subsection 7a7 shall not apply to-- 7#a7 a money transmitting business1 a non-depository trust company1 or any other person that is authorized by a ,state banking supervisor to issue payment stablecoins2 7#b7 a national limited payment stablecoin issuer2 7#c7 a depository institution1 as defined in section #ai7;b77#a7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c #dfa7;b77#a772 or 7#d7 a national trust bank4 7c7 ,joint supervision 7#a7 ,in general ,if a person is authorized by the appropriate ,federal banking agency and the applicable ,state banking supervisor to issue payment stablecoins1 the person shall be jointly supervised by the appropriate ,federal banking agency and the ,state banking supervisor4 7#b7 ,depository institutions ,a depository institution described in subsection 7b77#c7-- 7,a7 may become a member bank of the ,federal ,reserve ,system or obtain deposit or share insurance2 and 7,b7 shall not be required to satisfy subparagraph 7,a7 as a condition to operate4 7d7 ,injunctive relief ,the ,comptroller of the ,currency may bring an action in the appropriate district court of the ,united ,states or the court of any territory of the ,united ,states for the enforcement of this section and such courts shall have jurisdiction and power to order and require compliance herewith1 including through injunctive relief4 7e7 ,federal reserve accounts and services ,each ,federal ,reserve bank shall1 upon application from a national limited payment stablecoin issuer or a payment stablecoin issuer that only engages in the business of issuing and redeeming payment stablecoins and engaging in activities incidental to such issuance or redemption-- 7#a7 establish and maintain an account for the payment stablecoin issuer2 and 7#b7 provide to the payment stablecoin issuer-- 7,a7 the services listed in section #aa;,a7b7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #bdh;a7b772 and 7,b7 a deposit account in accordance with the first undesignated paragraph of section #ac of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #cdb74 #d4 ,disclosures1 redemption policies1 attestations1 and permissible assets for payment stablecoin issuers 7a7 ,in general ,any person described in section #c7;b7 that issues a payment stablecoin shall-- 7#a7 publicly disclose the assets backing the payment stablecoin on a monthly basis2 7#b7 adopt and publicly disclose policies for redeeming the payment stablecoin1 including whether redemption requests will be met on demand or with a time lag2 7#c7 undergo quarterly attestations by a registered public accounting firm and publicly disclose the results2 and 7#d7 attest that the assets backing the payment stablecoin do not materially diverge from those disclosed4 7b7 ,filing of disclosures ,disclosures described in subsection 7a7 shall-- 7#a7 be filed with the ,secretary of the ,treasury2 and 7#b7 made publicly available on a ,department of the ,treasury website on a form which shall include an executive summary not longer than #a page in length4 7c7 ,rulemaking ,the ,secretary of the ,treasury may promulgate regulations under section #eec of title #e1 ,united ,states ,code1 to develop a template form for ensuring that the disclosures described in subsection 7a7 are complete1 clear1 and understandable4 7d7 ,permissible assets ,payment stablecoins issued by a payment stablecoin issuer shall be backed by assets-- 7#a7 with a market value equal to not less than #ajj percent of the par value of the payment stablecoins outstanding2 and 7#b7 that are-- 7,a7 level #a high-quality liquid assets1 denominated in ,united ,states dollars2 7,b7 ,united ,states coins and currency1 as described in section #eajc of title #ca1 ,united ,states ,code2 and 7,c7 any deposit with an insured depository institution4 #e4 ,equal treatment for depository institutions 7a7 ,national banking associations ,section #eacf of the ,revised ,statutes 7#ab ,u4,s4,c4 #bd7 is amended by adding at the end the following3 ,twelfth4 ,to issue payment stablecoins4 4 7b7 ,segregation ,a depository institution1 as defined in section #ai7;b77#a7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #dfa7;b77#a77-- 7#a7 may segregate into a separate legal entity the issuance of payment stablecoins and management of such payment stablecoin reserve assets from other activities2 and 7#b7 that elects to segregate under paragraph 7#a71 or which only issues payment stablecoins or manages payment stablecoin reserve assets-- 7,a7 shall be subject to the same tailored regulatory standards as a national limited payment stablecoin issuer for that activity2 and 7,b7 shall remain subject to regulation1 examination1 and supervision by the same regulator as the depository institution4 #f4 ,national limited payment stablecoin issuers ,the ,revised ,statutes are amended by inserting after section #ebdd 7#ab ,u4,s4,c4 #dc7 the following3 #ebdd;,a4 ,national limited payment stablecoin issuers 7a7 ,application ,an entity may submit to the ,comptroller of the ,currency an application for a national limited payment stablecoin issuer license4 7b7 ,authority ,a license for a national limited payment stablecoin issuer shall authorize the national limited payment stablecoin issuer to issue and redeem payment stablecoins and engage in any activities incidental to such issuance or redemption1 including making a market in such payment stablecoin and holding and managing the reserve assets of such payment stablecoins4 7c7 ,limitation on other activities ,a national limited payment stablecoin issuer shall not engage in any activities1 such as making loans or other extensions of credit1 other than those authorized by subsection 7b74 7d7 ,review 7#a7 ,in general ,except as provided in paragraph 7#b71 the ,comptroller of the ,currency shall grant applications for national limited payment stablecoin issuer licenses not later than #ij days after the date on which the application is submitted4 7#b7 ,considerations 7,a7 ,in general ,the ,comptroller of the ,currency may deny an application for a license under this subsection only if the ,comptroller determines that the activities of the applicant would be unsafe or unsound based on the factors described in subparagraph 7,b74 7,b7 ,factors ,the factors described in this subparagraph are as follows3 7i7 ,the financial condition and business plan of the applicant4 7ii7 ,the general character and fitness of the management of the applicant4 7iii7 ,the risks presented and the potential benefits that could be delivered to consumers4 7#c7 ,default ,if the ,comptroller of the ,currency fails to approve or deny an application before the expiration of the #ij-;day period under paragraph 7#a71 the application shall be deemed to have been approved4 7#d7 ,response ,if the ,comptroller of the ,currency denies an application under this section1 the ,comptroller shall respond to the applicant with a detailed written explanation for such denial4 7e7 ,corporate governance ,a national limited payment stablecoin issuer may elect1 by designating in the bylaws of the issuer1 to follow the corporate governance provisions of-- 7#a7 the law of the ,state in which the issuer is incorporated2 7#b7 the law of the ,state in which the main office of the issuer is located2 7#c7 chapter #a of title #h of the ,delaware ,code2 or 7#d7 the ,model ,business ,corporation ,act4 7f7 ,supervision ,a license for a national limited payment stablecoin issuer shall permit supervision1 examination1 and regulation by the ,comptroller of the ,currency of only the legal entity that issues payment stablecoins4 7g7 ,regulations ,the ,office of the ,comptroller of the ,currency may establish only the following regulations1 in accordance with section #eec of title #e1 ,united ,states ,code1 for national limited payment stablecoin issuers3 7#a7 ,capital requirements which shall not exceed #f months of operating expenses4 7#b7 ,liquidity requirements4 7#c7 ,governance and risk-management requirements tailored to the business model and risk profile of national limited payment stablecoin issuers4 7h7 ,enforcement ,if the ,comptroller of the ,currency determines that a national limited payment stablecoin issuer has violated the requirements of this subsection or any other applicable law 7including regulations71 the ,comptroller of the ,currency may issue a temporary order requiring the national limited payment stablecoin issuers to-- 7#a7 cease and desist from any such violation2 and 7#b7 take affirmative action to prevent or remedy such violation4 4 #g4 ,exemption from securities requirements 7a7 ,securities 7#a7 ,securities act of #aicc ,section #b7;a77#a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#a77 is amended by adding at the end the following3 ,the term security does not include a payment stablecoin1 as that term is defined in section #b of the ,stablecoin ,,trust ,act of #bjbb44 7#b7 ,securities exchange act of #aicd ,section #c7;a77#aj7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a77#aj77 is amended by adding before the period at the end the following3 1 and shall also not include a payment stablecoin1 as that term is defined in section #b of the ,stablecoin ,,trust ,act of #bjbb4 7#c7 ,investment company act of #aidj ,section #b7;a77#cf7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#b7;a77#cf77 is amended by adding at the end the following3 ,the term security does not include a payment stablecoin1 as that term is defined in section #b of the ,stablecoin ,,trust ,act of #bjbb44 7#d7 ,investment advisers act of #aidj ,section #bjb7;a77#ah7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a77#ah77 is amended by adding at the end the following3 ,the term security does not include a payment stablecoin1 as that term is defined in section #b of the ,stablecoin ,,trust ,act of #bjbb44 7b7 ,investment company ,section #c7;c7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#c7;c77 is amended by adding at the end the following3 7#ae7 ,any payment stablecoin issuer1 as that term is defined in section #b of the ,stablecoin ,,trust ,act of #bjbb4 4 7c7 ,investment adviser ,section #bjb7;a77#aa7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a77#aa77 is amended-- 7#a7 by striking 22 7,g7 and inserting 2 7,g72 7#b7 by striking or 7,h7 and inserting 7,h72 and 7#c7 by inserting 2 or 7,i7 any payment stablecoin issuer1 defined in section #b of the ,stablecoin ,,trust ,act of #bjbb before the period at the end4 #h4 ,privacy protections for digital assets and payment stablecoin users 7a7 ,exemption from reporting requirements ,the ,secretary of the ,treasury may not collect or mandate the collection of nonpublic information about digital asset transactions unless the information is-- 7#a7 particularly described in a search warrant granted by a judge upon a finding of probable cause that #a or more of the participants to the transaction committed or is committing a crime2 or 7#b7 voluntarily provided by a customer of a financial institution1 business1 or other third party and held for a legitimate business purpose by that financial institution1 business1 or third party4 7b7 ,applicability of other laws ,a national limited payment stablecoin issuer shall be subject to title ,v of the ,gramm-,leach-,bliley ,act 7#ae ,u4,s4,c4 #fhja et seq474 7c7 ,rule of construction ,nothing in this section may be construed to limit-- 7#a7 any duty to report taxable income2 7#b7 any duty to disclose foreign account ownership2 or 7#c7 the ability of the ,internal ,revenue ,service to conduct investigations pursuant to a warrant or other regular legal process4 #i4 ,treatment of insolvent payment stablecoin issuers ,in any insolvency proceeding1 including any proceeding under title #aa1 ,united ,states ,code1 or any insolvency proceeding by an appropriate ,federal banking agency or a ,state banking supervisor with respect to a payment stablecoin issuer1 a claim of a person holding payment stablecoins issued by the payment stablecoin issuer shall have priority over all other claims against the payment stablecoin issuer4 #aj4 ,rules of construction 7a7 ,applicability to other instruments ,nothing in sections #b through #f may be construed as restricting activities involving instruments other than payment stablecoins4 7b7 ,relation to ,state and ,federal authority ,nothing in this ,act may be construed as-- 7#a7 preventing a ,state banking supervisor from imposing additional or stricter regulatory standards on a person licensed by the ,state banking supervisor to issue payment stablecoins2 7#b7 superseding any requirement of ,state law relating to money transmitting businesses operating in that ,state1 other than for payment stablecoin issuers2 or 7#c7 limiting the authority of an insured depository institution to engage in activities permissible pursuant to applicable ,state and ,federal law1 including accepting or receiving deposits and issuing digital assets that represent deposits4