,,ib ,union ,calendar ,no4 #fh #aaith ,,congress #ast ,session ,h4 ,r4 #bcib ,report ,no4 #aai-id ,,in ,,the ,,house ,,of ,,representatives ,march #bf1 #bjbe,mr4 ,steil 7for himself1 ,mr4 ,hill of ,arkansas1 ,mr4 ,torres of ,new ,york1 ,mr4 ,emmer1 ,mr4 ,huizenga1 ,mr4 ,meuser1 ,mrs4 ,kim1 ,mr4 ,moore of ,north ,carolina1 ,mr4 ,downing1 ,mr4 ,haridopolos1 ,mr4 ,gottheimer1 and ,mr4 ,liccardo7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,may #f1 #bjbe;,additional sponsors3 ,mr4 ,timmons1 ,mr4 ,lawler1 ,mr4 ,nunn of ,iowa1 ,mr4 ,rose1 ,mr4 ,stutzman1 and ,mr4 ,thanedar ,may #f1 #bjbe,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed,strike out all after the enacting clause and insert the part printed in italic,for text of introduced bill1 see copy of bill as introduced on ,march #bf1 #bjbe ,a ,,bill ,to provide for the regulation of payment stablecoins1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,stablecoin ,transparency and ,accountability for a ,better ,ledger ,economy ,act of #bjbe or the ,,stable ,act of #bjbe4 #b4 ,definitions ,in this ,act3 7#a7 ,appropriate ,federal banking agency ,the term appropriate ,federal banking agency has the meaning given that term under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7#b7 ,bank ,secrecy ,act ,the term ,bank ,secrecy ,act means-- 7,a7 section #ba of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahbi;b72 7,b7 chapter #b of title ,i of ,public ,law #ia-ejh 7#ab ,u4,s4,c4 #aiea et seq472 and 7,c7 subchapter ,,ii of chapter #ec of title #ca1 ,united ,states ,code4 7#c7 ,board ,the term ,board means the ,board of ,governors of the ,federal ,reserve ,system4 7#d7 ,comptroller ,the term ,comptroller means the ,comptroller of the ,currency4 7#e7 ,corporation ,the term ,corporation means the ,federal ,deposit ,insurance ,corporation4 7#f7 ,credit union terms ,the terms ,federal credit union1 insured credit union1 and ,state credit union have the meanings given those terms1 respectively1 in section #aja of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageb74 7#g7 ,digital asset ,the term digital asset means any digital representation of value which is recorded on a cryptographically-secured distributed ledger4 7#h7 ,distributed ledger ,the term distributed ledger means technology where data is shared across a network that creates a public digital ledger of verified transactions or information among network participants and the data is linked using cryptography to maintain the integrity of the public digital ledger and execute other functions4 7#i7 ,federal qualified nonbank payment stablecoin issuer ,the term ,federal qualified nonbank payment stablecoin issuer means a subsidiary of a nonbank entity approved by the primary ,federal payment stablecoin regulator1 pursuant to section #e1 to issue payment stablecoins4 7#aj7 ,institution-affiliated party ,with respect to a permitted payment stablecoin issuer1 the term institution-affiliated party means any director1 officer1 employee1 or person in control of1 or agent for1 the permitted payment stablecoin issuer4 7#aa7 ,insured depository institution ,the term insured depository institution means-- 7,a7 an insured depository institution1 as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac72 and 7,b7 an insured credit union4 7#ab7 ,monetary value ,the term monetary value-- 7,a7 means-- 7i7 a national currency2 7ii7 a deposit 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac77 that is denominated in a national currency2 or 7iii7 an account 7as defined in section #aja of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageb772 and 7,b7 does not include any agricultural or other physical commodity 7as defined in section #a;a of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a;a774 7#ac7 ,national currency ,the term national currency means a ,federal ,reserve note 7as the term is used in the first undesignated paragraph of section #af of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #daa771 money standing to the credit of an account with a ,federal reserve bank1 money issued by a central bank1 and money issued by an intergovernmental organization pursuant to an agreement by one or more governments4 7#ad7 ,nonbank entity ,the term nonbank entity means a person that is not an insured depository institution or subsidiary of an insured depository institution4 7#ae7 ,payment stablecoin ,the term payment stablecoin means a digital asset-- 7,a7 that is or is designed to be used as a means of payment or settlement2 7,b7 that is denominated in a national currency2 7,c7 the issuer of which-- 7i7 is obligated to convert1 redeem1 or repurchase for a fixed amount of monetary value2 or 7ii7 represents that the digital asset will maintain or creates the reasonable expectation that the digital asset will maintain a stable value relative to the value of a fixed amount of monetary value2 and 7,d7 that is not-- 7i7 a national currency2 7ii7 a security issued by-- 7,i7 an investment company registered under section #h7;a7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#h7;a772 or 7,,ii7 a person that would be an investment company under the ,investment ,company ,act of #aidj but for paragraphs 7#a7 and 7#g7 of section #c7;c7 of that ,act 7#ae ,u4,s4,c4 #hj;a-#c7;c772 7iii7 a deposit 7as defined under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac771 regardless of the technology used to record such deposit2 or 7iv7 an account 7as defined in section #aja of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageb771 regardless of the technology used to record such account4 7#af7 ,permitted payment stablecoin issuer ,the term permitted payment stablecoin issuer means-- 7,a7 a subsidiary of an insured depository institution that has been approved to issue payment stablecoins under section #e2 7,b7 a ,federal qualified nonbank payment stablecoin issuer2 or 7,c7 a ,state qualified payment stablecoin issuer4 7#ag7 ,person ,the term person means an individual1 partnership1 company1 corporation1 association 7incorporated or unincorporated71 trust1 estate1 cooperative organization1 or other entity4 7#ah7 ,primary ,federal payment stablecoin regulator 7,a7 ,in general ,the term primary ,federal payment stablecoin regulator means-- 7i7 with respect to an insured depository institution 7other than an insured credit union7 or a subsidiary of an insured depository institution 7other than an insured credit union71 the appropriate ,federal banking agency of such insured depository institution2 7ii7 with respect to an insured credit union or a subsidiary of an insured credit union1 the ,national ,credit ,union ,administration2 7iii7 with respect to a ,federal qualified nonbank payment stablecoin issuer and any nonbank entity that seeks to have a subsidiary approved as a ,federal qualified nonbank payment stablecoin issuer1 the ,comptroller2 and 7iv7 with respect to any entity chartered by the ,comptroller1 the ,comptroller4 7,b7 ,primary ,federal payment stablecoin regulators ,the term primary ,federal payment stablecoin regulators means the ,comptroller1 the ,board1 the ,corporation1 and the ,national ,credit ,union ,administration4 7#ai7 ,registered public accounting firm ,the term registered public accounting firm has the meaning given that term under section #b of the ,sarbanes-,oxley ,act of #bjjb 7#ae ,u4,s4,c4 #gbja74 7#bj7 ,state ,the term ,state means each of the several ,states1 the ,district of ,columbia1 and each territory of the ,united ,states4 7#ba7 ,state qualified payment stablecoin issuer ,the term ,state qualified payment stablecoin issuer means an entity that-- 7,a7 is approved to issue payment stablecoins by a ,state payment stablecoin regulator2 7,b7 issues a payment stablecoin in compliance with the laws and regulations of a ,state regulatory regime certified under section #d7;b72 and 7,c7 is not-- 7i7 chartered by the ,comptroller2 7ii7 a ,federal credit union2 or 7iii7 a subsidiary of a ,state credit union that-- 7,i7 has at least a partial ownership interest or loan from a ,federal credit union2 or 7,,ii7 has at least a partial ownership interest or loan from a ,state credit union that is organized in a different ,state than such subsidiary4 7#bb7 ,state payment stablecoin regulator ,the term ,state payment stablecoin regulator means-- 7,a7 a ,state agency that has primary regulatory and supervisory authority in such ,state over entities that issue payment stablecoins2 and 7,b7 with respect to a ,state qualified payment stablecoin issuer that is a subsidiary of a ,state-chartered depository institution 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac77 or a ,state credit union1 the ,state agency that has primary regulatory and supervisory authority over entities that issue payment stablecoins in the ,state in which such ,state-chartered depository institution or ,state credit union is chartered4 7#bc7 ,subsidiary of an insured credit union ,with respect to an insured credit union1 the term subsidiary of an insured credit union means-- 7,a7 an organization providing services to the insured credit union that are associated with the routine operations of credit unions1 as described under section #ajg7g77;,i7 of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageg7g77;,i772 7,b7 a credit union service organization1 as such term is used under part #gab of title #ab1 ,code of ,federal ,regulations1 with respect to which the insured credit union has an ownership interest or to which the insured credit union has extended a loan2 and 7,c7 any subsidiary of the insured credit union that is a ,state credit union4 #c4 ,limitation on who may issue a payment stablecoin 7a7 ,limitation on issuers ,it shall be unlawful for any person other than a permitted payment stablecoin issuer to issue a payment stablecoin in the ,united ,states4 7b7 ,limitation on offering or selling 7#a7 ,in general ,after the end of the #ah-month period beginning on the date of enactment of this ,act1 it shall be unlawful for any custodial intermediary to offer or sell a payment stablecoin in the ,united ,states unless the payment stablecoin was issued by a permitted payment stablecoin issuer4 7#b7 ,exceptions for comparable payment stablecoin regimes 7,a7 ,in general ,paragraph 7#a7 and subsection 7a7 shall not apply to the offer or sale of a payment stablecoin if-- 7i7 the payment stablecoin was issued by a foreign payment stablecoin issuer2 7ii7 the foreign payment stablecoin issuer is subject to regulation by a foreign payment stablecoin regulator of a nation with a payment stablecoin regulatory regime that the ,secretary of the ,treasury determines under subparagraph 7,b7 is comparable to the requirements under this ,act2 and 7iii7 the foreign payment stablecoin issuer consents to be subject to reporting and examination requirements1 as determined by-- 7,i7 the ,comptroller1 if the foreign payment stablecoin issuer is a nonbank2 or 7,,ii7 the ,board1 if the foreign payment stablecoin issuer is a banking institution or subsidiary thereof4 7,b7 ,determination ,with respect to a foreign nation1 the ,secretary of the ,treasury shall determine1 upon request of a foreign payment stablecoin issuer1 a foreign payment stablecoin regulator1 or on the ,secretary's own initiative1 and in consultation with the ,federal payment stablecoin regulators1 whether the payment stablecoin regulatory regime of such nation is comparable to the requirements under this ,act4 7,c7 ,public notice ,the ,secretary shall make the list of nations for which a determination has been made under subparagraph 7,b7 available to the public1 and keep such list current4 7,d7 ,rescinding determinations 7i7 ,secretarial action ,the ,secretary may1 in consultation with the primary ,federal payment stablecoin regulators1 rescind a determination made under subparagraph 7,b7 with respect to a foreign nation1 if the ,secretary determines that the regulatory regime of such nation is no longer comparable to the requirements under this ,act4 7ii7 ,safeharbors ,if the ,secretary rescinds a determination pursuant to clause 7i71 a custodial intermediary shall not be in violation of this subsection by reason of the offer or sale of a payment stablecoin issued by such nation's foreign payment stablecoin issuer until #ij days after the determination is rescinded4 7#c7 ,penalty ,any person who violates this subsection shall be subject to a civil penalty of not more than #ajj1jjj for each day during which such violation continues4 7c7 ,rulemaking ,not later than #ab months after the date of enactment of this ,act1 the ,secretary shall issue such rules as may be required to carry out this section4 7d7 ,rule of construction ,this section does not apply to transactions in digital assets for an individual's own lawful purposes by means of a software or hardware wallet that facilitates such individual's own custody of digital assets4 #d4 ,requirements for issuing payment stablecoins 7a7 ,standards for the issuance of payment stablecoins 7#a7 ,in general ,each permitted payment stablecoin issuer shall-- 7,a7 maintain reserves backing the issuer's outstanding payment stablecoins on an at least #a to #a basis1 with reserves comprising-- 7i7 ,united ,states currency 7including ,federal reserve notes7 or money standing to the credit of an account with a ,federal reserve bank2 7ii7 funds held as demand deposits 7or other deposits that may be withdrawn upon request at any time7 at insured depository institutions 7including foreign branches and agencies of insured depository institutions7 or approved foreign depository institutions 7as determined in paragraph 7#e77;,a77v77 or share drafts 7or other deposits that may be withdrawn upon request at any time7 at insured credit unions1 subject to limitations established by the ,corporation and the ,national ,credit ,union ,administration1 respectively1 to address safety and soundness risks of such insured depository institutions2 7iii7 ,treasury bills1 notes1 or bonds-- 7,i7 with a remaining maturity of #ic days or less2 or 7,,ii7 issued with a maturity of #ic days or less2 7iv7 repurchase agreements1 wherein the permitted payment stablecoin issuer is acting as a seller of securities1 or reverse repurchase agreements1 wherein the permitted payment stablecoin issuer is acting as a purchaser of securities1 with an overnight maturity and that are backed by ,treasury bills with a maturity of #ic days or less that are-- 7,i7 centrally cleared through a clearing agency registered with the ,securities and ,exchange ,commission2 or 7,,ii7 bilateral1 settling either through delivery versus payment or through a tri-party control account1 with a counterparty that the issuer has determined to be adequately credit worthy even in the event of severe market stress2 or 7v7 securities issued by an investment company under section #h7;a7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#h7 that operates as a money market fund in compliance with ,rule #b;a-#g under the ,investment ,company ,act of #aidj 7or any successor rule7 and that are invested solely in the underlying assets described in clauses 7i7 through 7iv72 7,b7 publicly disclose the issuer's redemption policy2 7,c7 establish procedures for timely redemption of the issuer's outstanding payment stablecoins2 and 7,d7 publish a report on the monthly composition of the issuer's reserves on the website of the issuer1 containing-- 7i7 the total number of outstanding payment stablecoins issued by the issuer2 and 7ii7 the amount and composition of the reserves described under subparagraph 7,a74 7#b7 ,eligibility ,nothing in this ,act shall be construed as expanding or contracting legal eligibility to make deposits1 or hold an account1 at a ,federal reserve bank4 7#c7 ,prohibition on rehypothecation ,reserves described under paragraph 7#a77;,a7 may not be pledged1 rehypothecated1 or reused1 except for the purpose of satisfying obligations associated with reserves described under paragraph 7#a77;,a77iv74 7#d7 ,monthly certification2 examination of reports by registered public accounting firm 7,a7 ,in general ,a permitted payment stablecoin issuer shall1 each month1 have the information disclosed in the previous month-end report required under paragraph 7#a77;,d7 examined by an independent registered public accounting firm4 7,b7 ,certification ,each month1 the ,chief ,executive ,officer and ,chief ,financial ,officer of a permitted payment stablecoin issuer shall submit to1 as applicable1 the primary ,federal payment stablecoin regulator or1 in the case of a ,state qualified payment stablecoin issuer1 the ,state payment stablecoin regulator1 a certification that1 based on such officers' knowledge1 the previous month-end report required under paragraph 7#a77;,d7-- 7i7 does not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made1 in light of the circumstances under which such statements were made1 not misleading2 and 7ii7 fairly presented in all material respects the information required under paragraph 7#a77;,d7 for the period presented in such report4 7,c7 ,criminal ,penalties ,whoever-- 7i7 submits a certification set forth in subparagraph 7,b7 knowing that the report to which the certification relates does not fairly present1 in all material respects1 the information required to be contained in such report shall be fined not more than #a1jjj1jjj or imprisoned not more than #aj years1 or both2 or 7ii7 willfully submits a certification set forth in subparagraph 7,b7 knowing that the report to which the certification relates does not fairly present1 in all material respects1 the information required to be contained in such report shall be fined not more than #e1jjj1jjj1 or imprisoned not more than #bj years1 or both4 7#e7 ,capital1 liquidity1 risk management1 and other requirements 7,a7 ,in general ,the primary ,federal payment stablecoin regulators shall1 jointly and in consultation with the ,state payment stablecoin regulators1 issue rules to establish-- 7i7 capital requirements applicable to a permitted payment stablecoin issuer that-- 7,i7 are tailored to the business model and risk profile of a permitted payment stablecoin issuer2 7,,ii7 do not exceed requirements which are sufficient to ensure the ongoing operations of a permitted payment stablecoin issuer2 and 7,,iii7 if such regulators determine that a capital buffer is necessary to ensure the ongoing operations of a permitted payment stablecoin issuer1 may include capital buffers that are tailored to the business model and risk profile of a permitted payment stablecoin issuer2 7ii7 requirements implementing liquidity standards applicable to reserves described in paragraph 7#a7 for a permitted payment stablecoin issuer1 which may not exceed an amount that is sufficient to ensure the financial integrity of a permitted payment stablecoin issuer and the ability of the issuer to meet the financial obligations of the issuer1 including redemptions2 7iii7 reserve asset diversification and interest rate risk management standards applicable to a permitted payment stablecoin issuer that-- 7,i7 are tailored to the business model and risk profile of a permitted payment stablecoin issuer2 and 7,,ii7 do not exceed standards which are sufficient to ensure the ongoing operations of a permitted payment stablecoin issuer2 and 7iv7 appropriate operational1 compliance1 information technology1 and cybersecurity risk management standards that are tailored to the business model and risk profile of a permitted payment stablecoin issuer2 and 7v7 requirements regarding the approval of foreign depository institutions that may hold demand deposits of a permitted payment stablecoin issuer4 7,b7 ,rule of construction ,nothing in this paragraph may be construed to limit-- 7i7 the authority of the primary ,federal payment stablecoin regulators1 in prescribing standards under this paragraph1 to tailor or differentiate among permitted payment stablecoin issuers on an individualized basis or by category1 taking into consideration the capital structure1 business model risk profile1 complexity1 financial activities1 size1 and any other risk related factors of permitted payment stablecoin issuers that the primary ,federal payment stablecoin regulators determine appropriate2 or 7ii7 the supervisory1 regulatory1 or enforcement authority of a ,federal banking agency 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac77 or the ,national ,credit ,union ,administration to further the ability of an institution under the supervision of the ,federal banking agency or the ,national ,credit ,union ,administration to maintain safe and sound operations or comply with this ,act4 7,c7 ,applicability of existing capital standards 7i7 ,applicability of the ,financial ,stability ,act of #bjaj ,section #aga of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecga7 shall not apply to requirements issued under this paragraph4 7ii7 ,rules relating to leverage capital requirements or risk-based capital requirements ,where an insured depository institution or depository institution holding company1 as defined under section #aga7;a77#c7 of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecga7;a77#c771 includes1 on a consolidated basis1 a permitted payment stablecoin issuer1 any rule issued by an appropriate ,federal banking agency that imposes1 on a consolidated basis1 a leverage capital requirement or risk-based capital requirement on such insured depository institution or depository institution holding company1 shall not require such insured depository institution or depository institution holding company to hold1 with respect to the permitted payment stablecoin issuer and its assets and operations1 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 subparagraph 7,a77i74 7iii7 ,rulemaking ,not later than the date the primary ,federal payment stablecoin regulators issue regulations to carry out this section1 each ,federal banking agency1 as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac71 shall amend or otherwise modify any rule described in clause 7ii7 so that it complies with such clause 7ii74 7#f7 ,treatment ,under the ,bank ,secrecy ,act 7,a7 ,in general ,a permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the ,bank ,secrecy ,act4 7,b7 ,regulations ,the ,secretary of the ,treasury1 acting through the ,director of the ,financial ,crimes ,enforcement ,network1 and in consultation with the primary ,federal payment stablecoin regulators1 shall issue regulations to apply the ,bank ,secrecy ,act to permitted payment stablecoin issuers that are tailored to the size and complexity of such issuers1 including by requiring each permitted payment stablecoin issuer to-- 7i7 establish and maintain an anti-money laundering and countering the financing of terrorism program1 which shall include-- 7,i7 an appropriate risk assessment2 7,,ii7 the development of internal policies1 procedures1 and controls2 7,,iii7 the designation of a compliance officer2 7,,iv7 an ongoing employee training program2 and 7,v7 an independent audit function to test such program2 7ii7 retain appropriate records of payment stablecoin transactions2 7iii7 monitor and report suspicious activity1 which may include use of appropriate distributed ledger analytics2 and 7iv7 maintain an effective customer identification program to identify and verify initial holders of a payment stablecoin for the purposes of carrying out appropriate customer due diligence4 7#g7 ,compliance with sanctions ,a permitted payment stablecoin issuer shall comply with all laws and regulations related to ,united ,states sanctions administered by the ,office of ,foreign ,assets ,control4 7#h7 ,limitation on payment stablecoin activities ,a permitted payment stablecoin issuer may only-- 7,a7 issue payment stablecoins2 7,b7 redeem payment stablecoins2 7,c7 manage related reserves 7including purchasing1 selling1 and holding reserve assets72 7,d7 provide custodial or safekeeping services for payment stablecoins and private keys of payment stablecoins2 7,e7 provide custodial or safekeeping services for reserves1 consistent with this ,act2 7,f7 undertake other functions that directly support activities described in subparagraphs 7,a7 through 7,e72 and 7,g7 undertake such non-payment stablecoin activities that are allowed by the primary ,federal payment stablecoin regulator4 7#i7 ,prohibition on yield ,a permitted payment stablecoin issuer may not pay interest or yield to holders of its payment stablecoins4 7#aj7 ,regulation of ,federal qualified nonbank payment stablecoin issuers by the ,comptroller ,a ,federal qualified nonbank payment stablecoin issuer shall be regulated and supervised exclusively by the ,comptroller4 7b7 ,state-level regulatory regimes 7#a7 ,in general ,a ,state qualified payment stablecoin issuer may only issue payment stablecoins pursuant to the regulation of a ,state payment stablecoin regulator of a ,state with a regulatory regime for issuing payment stablecoins that is certified under this subsection as meeting or exceeding the standards and requirements described in subsection 7a74 7#b7 ,certification 7,a7 ,in general ,beginning on the date that is #a year after the date of enactment of this ,act or #fj days after the rulemaking described in subsection 7d7 is completed1 whichever is earlier1 a ,state payment stablecoin regulator may submit to the ,secretary of the ,treasury a certification that the regulatory regime of the ,state for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection 7a74 7,b7 ,validity of certification ,a certification under subparagraph 7,a7 shall be valid upon submission and remain valid unless the ,secretary of the ,treasury rejects the certification under paragraph 7#f74 7#c7 ,form of certification ,a certification described under paragraph 7#b7-- 7,a7 shall contain an attestation that the regulatory regime of the ,state for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection 7a72 and 7,b7 may include supporting information1 such as a copy of any ,state law or regulation implementing such standards and requirements4 7#d7 ,report and attestation 7,a7 ,in general ,a ,state payment stablecoin regulator with a valid certification under this subsection that has made subsequent material changes to its ,state regulatory regime and wishes to maintain a valid certification shall submit to the ,secretary of the ,treasury an explanation of all such material changes4 7,b7 ,form of material changes explanation ,with respect to a ,state payment stablecoin regulator that submits an explanation of material changes to the ,state regulatory regime under subparagraph 7,a71 the payment stablecoin regulator shall make such explanation in the same manner1 and containing the same attestation1 as described under paragraph 7#c7 for a certification4 7#e7 ,advisory opinions on proposed laws or regulations ,upon request of any ,state payment stablecoin regulator1 the ,secretary of the ,treasury shall-- 7,a7 review any proposed law or regulation of the ,state provided by the ,state payment stablecoin regulator2 and 7,b7 not later than #cj days after being provided the proposed law or regulation1 either-- 7i7 inform the ,state payment stablecoin regulator that the proposed law or regulation is consistent with a ,state regulatory regime for issuing payment stablecoins that meets or exceeds the standards and requirements described in subsection 7a72 or 7ii7 provide the ,state payment stablecoin regulator with a detailed explanation of why the proposed law or regulation is not consistent with a ,state regulatory regime for issuing payment stablecoins that meets or exceeds the standards and requirements described in subsection 7a74 7#f7 ,regimes that are not substantially similar 7,a7 ,in general ,the ,secretary of the ,treasury may reject a certification under paragraph 7#b7 or a certification with respect to which a ,state payment stablecoin regulator has submitted an explanation of material changes under paragraph 7#d71 if the ,secretary1 not later than #cj days after the date on which the initial certification or explanation of material changes is submitted-- 7i7 determines that the ,state regulatory regime does not meet or exceed the standards and requirements described in subsection 7a72 and 7ii7 provides the ,state payment stablecoin regulator with a written explanation for the rejection1 describing the reasoned basis for the rejection with sufficient detail such that the ,state can bring the ,state regulatory regime into compliance based on the explanation4 7,b7 ,opportunity to cure 7i7 ,in general ,with respect to a rejection described under subparagraph 7,a71 the ,secretary of the ,treasury shall provide the ,state payment stablecoin regulator with not less than a #ahj-;day period from the date on which the ,state payment stablecoin regulator is notified of such rejection to-- 7,i7 make such changes as may be necessary to ensure the regulatory regime of the ,state for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection 7a72 and 7,,ii7 resubmit the certification or explanation of material changes4 7ii7 ,rejection ,if1 after a ,state payment stablecoin regulator makes changes described under clause 7i7 during the period described in clause 7i71 the ,secretary of the ,treasury determines that the certification should be rejected1 the ,secretary of the ,treasury shall1 not later than #cj days after such determination1 provide the ,state payment stablecoin regulator with a written explanation for the determination1 describing the reasoned basis for the determination with sufficient detail such that the ,state can bring its regime into compliance based on the explanation4 7,c7 ,appeal of rejection 7i7 ,in general ,a ,state payment stablecoin regulator that has had a certification rejected under this paragraph may1 after the cure period described under subparagraph 7,b77i71 appeal such rejection to the ,united ,states ,court of ,appeals for the ,district of ,columbia ,circuit1 which shall1 upon a determination that the regulatory regime of the ,state for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection 7a71 reverse such rejection4 7ii7 ,review by the ,supreme ,court ,the judgment and decree of the ,court of ,appeals shall be final1 except that the same shall be subject to review by the ,supreme ,court upon certiorari1 as provided in section #abed of title #bh1 ,united ,states ,code4 7,d7 ,right to resubmit ,a ,state payment stablecoin regulator that has had a certification rejected under this paragraph may resubmit a new certification under paragraph 7#b74 7#g7 ,appropriate exemptive relief ,the ,secretary of the ,treasury shall issue such rules and orders as are necessary to provide appropriate exemptive relief and safe harbors for ,state qualified payment stablecoin issuers to continue operations during such periods in which any rules promulgated pursuant to subsection 7a7 materially affect a previously certified ,state regulatory regime's ability to meet or exceed the standards and requirements described in subsection 7a74 7c7 ,not insured by the ,federal ,government2 misrepresentation of insured status 7#a7 ,in general ,payment stablecoins are not backed by the full faith and credit of the ,united ,states1 guaranteed by the ,united ,states ,government1 subject to deposit insurance by the ,corporation1 or subject to share insurance by the ,national ,credit ,union ,administration4 7#b7 ,misrepresentation of insured status ,it shall be unlawful to represent that a payment stablecoin is backed by the full faith and credit of the ,united ,states1 guaranteed by the ,united ,states ,government1 or subject to ,federal deposit insurance or ,federal share insurance4 7#c7 ,disclosure ,permitted payment stablecoin issuers shall clearly and prominently disclose on their website that payment stablecoins issued by such permitted payment stablecoin issuer are not guaranteed by the ,united ,states ,government1 covered by deposit insurance by the ,federal ,deposit ,insurance ,corporation1 or covered by share insurance of the ,national ,credit ,union ,administration4 7#d7 ,penalties ,any person who violates this subsection may be prosecuted to the fullest extent of the law1 including1 as applicable1 under-- 7,a7 section #ah7;a77#d7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahbh7;a77#d72 relating to the prohibition on false advertising in connection with deposit insurance1 the misuse of ,,fdic names1 and misrepresentations of insured status72 7,b7 section #gji of title #ah1 ,united ,states ,code 7relating to false advertising or misuse of names to indicate a ,federal agency72 7,c7 criminal penalties under title #ah1 ,united ,states ,code1 related to fraud2 and 7,d7 other remedies available under the law4 7d7 ,officers and directors convicted of certain felonies ,no individual who has been convicted of a felony offense involving insider trading1 embezzlement1 cybercrime1 money laundering1 financing of terrorism1 or financial fraud may serve as-- 7#a7 an officer of a payment stablecoin issuer2 or 7#b7 a director of a payment stablecoin issuer4 7e7 ,rulemaking 7#a7 ,in general ,the primary ,federal payment stablecoin regulators may issue such orders and regulations as may be necessary to administer and carry out the requirements of this section1 including to establish conditions1 and to prevent evasions thereof4 7#b7 ,joint issuance of regulation ,all regulations issued to carry out this section by the primary ,federal payment stablecoin regulators shall be issued jointly1 after consultation with ,state payment stablecoin regulators4 7#c7 ,rulemaking deadline ,not later than the end of the #ahj-;day period beginning on the date of enactment of this ,act1 the ,federal payment stablecoin regulators shall issue regulations to carry out this section4 #e4 ,approval of subsidiaries of insured depository institutions and subsidiaries of nonbank entities 7a7 ,in general 7#a7 ,application 7,a7 ,in general ,the primary ,federal payment stablecoin regulator shall receive1 review1 and consider for approval applications from any insured depository institution that seeks to issue payment stablecoins through a subsidiary and any nonbank entity that seeks to issue payment stablecoins through a subsidiary4 7,b7 ,sharing of information ,with respect to applications submitted by ,state-chartered insured depository institutions1 the primary ,federal payment stablecoin regulator shall share such applications with the relevant ,state bank or ,state credit union supervisor4 7,c7 ,completion of application 7i7 ,in general ,the primary ,federal payment stablecoin regulator shall consider an application complete if such application contains sufficient information for the primary ,federal payment stablecoin regulator to render a decision on whether the application meets the requirements set forth in section #d4 7ii7 ,material change in circumstances ,an application described under clause 7i7 that is considered complete shall remain complete unless the primary ,federal payment stablecoin regulator determines that a material change in circumstances requires otherwise4 7#b7 ,evaluation of applications ,a complete application received under paragraph 7#a7 shall be evaluated by the primary ,federal payment stablecoin regulator based on the ability of the subsidiary of the applicant to meet the requirements set forth in section #d4 7#c7 ,timing for decision2 grounds for denial 7,a7 ,timing ,the primary ,federal payment stablecoin regulator shall-- 7i7 not later than #cj days after receiving the application-- 7,i7 inform the applicant whether the applicant has submitted a complete application2 and 7,,ii7 if the application is not complete1 inform the applicant of the additional information the applicant must provide in order for the application to be considered complete2 and 7ii7 not later than #abj days after informing the applicant that the application is complete1 render a decision on an application4 7,b7 ,denial of application 7i7 ,grounds for denial 7,i7 ,in general ,the primary ,federal payment stablecoin regulator may only deny a complete application received under paragraph 7#a7 if the regulator determines that the activities of the applicant would be unsafe or unsound based on the ability of the subsidiary of the applicant to meet the requirements set forth in section #d4 7,,ii7 ,treatment of certain issuances ,the issuance of a payment stablecoin on an open1 public1 and decentralized network shall not be a valid ground for denial of an application received under paragraph 7#a74 7ii7 ,explanation required ,if the primary ,federal payment stablecoin regulator denies a complete application received under paragraph 7#a71 the regulator shall1 not later than #cj days after the date of such denial1 provide the applicant with-- 7,i7 written notice explaining the denial with specificity1 including all findings made by the regulator with respect to all identified material shortcomings in the application2 and 7,,ii7 actionable recommendations on how the applicant could address the identified material shortcomings4 7iii7 ,opportunity for hearing2 final determination 7,i7 ,in general ,not later than #cj days after the date of receipt of any notice of the denial of an application under this subsection1 the applicant may request1 in writing1 an opportunity for a written or oral hearing before the primary ,federal payment stablecoin regulator to appeal the denial4 7,,ii7 ,timing ,upon receipt of a timely request1 the primary ,federal payment stablecoin regulator shall notice a time 7not later than #cj days after the date of receipt of the request7 and place at which the applicant may appear1 personally or through counsel1 to appeal the denial1 to submit written materials1 or to provide oral testimony and oral argument4 7,,iii7 ,final determination ,not later than #fj days after the date of a hearing under this clause1 the primary ,federal payment stablecoin regulator shall notify the applicant of the final determination of the primary ,federal payment stablecoin regulator with respect to the appeal1 which shall contain a statement of the basis for such determination1 with specific findings4 7,,iv7 ,notice if no hearing ,if an applicant does not make a timely request for a hearing under this clause1 the primary ,federal payment stablecoin regulator shall notify the applicant1 not later than #aj days after the date by which the applicant may request a hearing under this clause1 in writing1 that the denial of the application is a final determination of the primary ,federal payment stablecoin regulator4 7,c7 ,failure to render a decision ,if the primary ,federal payment stablecoin regulator fails to render a decision on a complete application within the time period specified in subparagraph 7,a71 the application shall be deemed approved4 7,d7 ,right to reapply ,the denial of an application under this subsection shall not prohibit the applicant from filing a subsequent application4 7#d7 ,report on pending applications ,each of the primary ,federal payment stablecoin regulators shall annually report to ,congress on-- 7,a7 the number of calendar days each applicant waited for either an approval or denial of an application under this subsection2 7,b7 the number of calendar days each applicant with an outstanding application has waited for a decision2 and 7,c7 the number of applications that have been pending for #f months or longer since the date of the initial application filed under paragraph 7#a7 where the applicant has been informed that the application remains incomplete1 including providing documentation on the status of the application and why the application has not yet been approved4 7#e7 ,rulemaking 7,a7 ,in general ,not later than #ahj days after the date of enactment of this ,act1 the primary ,federal payment stablecoin regulators shall1 jointly1 issue rules to carry out this section1 which may only relate to the application process under this subsection and may not implement the requirements set forth in section #d4 7,b7 ,tailoring of rules ,the joint rulemaking required under subparagraph 7,a7 shall be tailored so as to minimize any incremental burden placed on well capitalized and highly-rated insured depository institutions4 7b7 ,effective date 7#a7 ,in general ,this section shall take effect on the earlier of-- 7,a7 #ab months after the date of enactment of this ,act2 or 7,b7 the date that is #abj days after the date on which the primary ,federal payment stablecoin regulators issue final regulations implementing this section4 7#b7 ,notice to ,congress ,each of the primary ,federal payment stablecoin regulators shall notify ,congress upon receiving their first application4 7c7 ,effect on ,state law for payment stablecoin issuers approved by ,federal payment stablecoin regulators under this section ,the provisions of this section preempt any conflicting ,state law and supersede any ,state licensing requirement for any nonbank entity or subsidiary of an insured depository institution or credit union that is approved under this section to be a permitted payment stablecoin issuer4 #f4 ,supervision and enforcement with respect to subsidiaries of insured depository institutions and ,federal qualified nonbank payment stablecoin issuers 7a7 ,supervision 7#a7 ,subsidiary of an insured depository institution 7,a7 ,in general ,each permitted payment stablecoin issuer that is a subsidiary of an insured depository institution shall be subject to supervision by the primary ,federal payment stablecoin regulator in the same manner as such insured depository institution4 7,b7 ,gramm-,leach-,bliley ,act ,for purposes of title ,v of the ,gramm-,leach-,bliley ,act 7#ae ,u4,s4,c4 #fhja et seq47 each permitted payment stablecoin issuer that is a subsidiary of an insured depository institution shall be deemed a financial institution4 7#b7 ,federal qualified nonbank payment stablecoin issuer 7,a7 ,submission of reports ,each ,federal qualified nonbank payment stablecoin issuer shall1 upon request1 submit reports to the ,comptroller as to-- 7i7 the financial condition of the ,federal qualified nonbank payment stablecoin issuer2 7ii7 the systems of the ,federal qualified nonbank payment stablecoin issuer for monitoring and controlling financial and operating risks2 and 7iii7 compliance with this ,act and regulations issued pursuant to this ,act by the ,federal qualified nonbank payment stablecoin issuer4 7,b7 ,examinations ,the ,comptroller may examine a ,federal qualified nonbank payment stablecoin issuer in order to inform the ,comptroller of-- 7i7 the nature of the operations and financial condition of the ,federal qualified nonbank payment stablecoin issuer2 7ii7 the financial1 operational1 and other risks within the ,federal qualified nonbank payment stablecoin issuer that may pose a threat to-- 7,i7 the safety and soundness of the ,federal qualified nonbank payment stablecoin issuer2 or 7,,ii7 the stability of the financial system of the ,united ,states2 7iii7 the systems of the ,federal qualified nonbank payment stablecoin issuer for monitoring and controlling the risks described in clause 7ii72 7iv7 the compliance of the ,federal qualified nonbank payment stablecoin issuer with this ,act and regulations issued pursuant to this ,act2 and 7v7 the compliance of the ,federal qualified nonbank payment stablecoin issuer with the requirements of the ,bank ,secrecy ,act and laws authorizing the imposition of sanctions and implemented by the ,secretary of the ,treasury4 7,c7 ,requirements for efficiency ,in supervising and examining a ,federal qualified nonbank payment stablecoin issuer1 the ,comptroller shall1 to the fullest extent possible1 use existing reports and other supervisory information4 7,d7 ,avoidance of duplication ,the ,comptroller shall1 to the fullest extent possible1 avoid duplication of examination activities1 reporting requirements1 and requests for information in carrying out this ,act with respect to a ,federal qualified nonbank payment stablecoin issuer4 7,e7 ,gramm-,leach-,bliley ,act ,for purposes of title ,v of the ,gramm-,leach-,bliley ,act 7#ae ,u4,s4,c4 #fhja et seq47 each ,federal qualified nonbank payment stablecoin issuer shall be deemed a financial institution4 7b7 ,enforcement 7#a7 ,suspension or revocation of registration ,the primary ,federal payment stablecoin regulator may prohibit a permitted payment stablecoin issuer from issuing payment stablecoins1 if the primary ,federal payment stablecoin regulator determines that such permitted payment stablecoin issuer1 or an institution-affiliated party of the permitted payment stablecoin issuer1 is-- 7,a7 materially violating or has materially violated this ,act or any regulation or order issued under this ,act1 including the issuer's obligations under the section #d7;a77#f72 or 7,b7 materially violating or has materially violated any condition imposed in writing by the primary ,federal payment stablecoin regulator in connection with a written agreement entered into between the permitted payment stablecoin issuer and the primary ,federal payment stablecoin regulator4 7#b7 ,cease-and-desist proceedings ,if the primary ,federal payment stablecoin regulator has reasonable cause to believe that a permitted payment stablecoin issuer or any institution-affiliated party of a permitted payment stablecoin issuer is violating1 has violated1 or is attempting to violate this ,act1 any regulation or order issued under this ,act1 or any written agreement entered into with the primary ,federal payment stablecoin regulator or condition imposed in writing by the primary ,federal payment stablecoin regulator in connection with any application or other request1 the primary ,federal payment stablecoin regulator may order the permitted payment stablecoin issuer or institution-affiliated party of the permitted payment stablecoin issuer to-- 7,a7 cease and desist from such violation or practice2 or 7,b7 take affirmative action to correct the conditions resulting from any such violation or practice4 7#c7 ,removal and prohibition authority ,the primary ,federal payment stablecoin regulator may remove an institution-affiliated party of a permitted payment stablecoin issuer from their position or office or prohibit further participation in the affairs of the permitted payment stablecoin issuer or all permitted payment stablecoin issuers by such institution-affiliated party1 if the primary ,federal payment stablecoin regulator determines that-- 7,a7 the institution-affiliated party has1 directly or indirectly1 committed a violation or attempted violation of this ,act or any regulation or order issued under this ,act2 or 7,b7 the institution-affiliated party has committed a violation of any provision of subchapter ,,ii of chapter #ec of title #ca1 ,united ,states ,code4 7#d7 ,procedures 7,a7 ,in general ,if the primary ,federal payment stablecoin regulator identifies a violation or attempted violation of this ,act or makes a determination under paragraph 7#a71 7#b71 or 7#c71 the primary ,federal payment stablecoin regulator shall comply with the procedures set forth1 as applicable1 in-- 7i7 subsections 7b7 and 7e7 of sections #h of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah72 or 7ii7 subsections 7e7 and 7g7 of section #bjf of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghf74 7,b7 ,judicial review ,a person aggrieved by a final action under this subsection may obtain judicial review of such action exclusively as provided1 as applicable1 in-- 7i7 section #h7;h7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah7;h772 or 7ii7 section #bjf7;j7 of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghf7;j774 7,c7 ,injunction ,the primary ,federal payment stablecoin regulator may1 in the discretion of the regulator1 follow the procedures for judicial enforcement of any effective and outstanding notice or order issued under this subsection provided1 as applicable1 in-- 7i7 section #h7;i77#a7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah7;i77#a772 or 7ii7 section #bjf7k77#a7 of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghf7k77#a774 7,d7 ,temporary cease-and-desist proceedings ,if the primary ,federal payment stablecoin regulator determines that a violation or attempted violation of this ,act or an action with respect to which a determination was made under paragraph 7#a71 7#b71 or 7#c71 or the continuation thereof1 is likely to cause insolvency or significant dissipation of assets or earnings of a permitted payment stablecoin issuer1 or is likely to weaken the condition of the permitted payment stablecoin issuer or otherwise prejudice the interests of the customers of the permitted payment stablecoin issuer prior to the completion of the proceedings conducted under this paragraph1 the primary ,federal payment stablecoin regulator may follow the procedures provided1 as applicable1 in-- 7i7 section #h7;c7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah7;c77 to issue a temporary cease-and-desist order2 or 7ii7 section #bjf7;f7 of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghf7;f77 to issue a temporary cease-and-desist order4 7#e7 ,civil money penalties 7,a7 ,failure to be approved ,any person who issues a payment stablecoin and who is not a permitted payment stablecoin issuer1 and any institution-affiliated party of such a person who knowingly participates in issuing such a payment stablecoin1 shall be liable for a civil penalty of not more than #ajj1jjj for each day during which such payment stablecoins are outstanding4 7,b7 ,first tier ,except as provided in subparagraph 7,a71 a permitted payment stablecoin issuer or institution-affiliated party of such permitted payment stablecoin issuer that materially violates this ,act or any regulation or order issued under this ,act1 or that materially violates any condition imposed in writing by the primary ,federal payment stablecoin regulator in connection with a written agreement entered into between the permitted payment stablecoin issuer and the primary ,federal payment stablecoin regulator1 shall be liable for a civil penalty of up to #ajj1jjj for each day during which the violation continues4 7,c7 ,second tier ,except as provided in subparagraph 7,a71 and in addition to the penalties described under subparagraph 7,b71 a permitted payment stablecoin issuer or institution-affiliated party of such permitted payment stablecoin issuer who knowingly participates in a violation of any provision of this ,act1 or any regulation or order issued thereunder1 is liable for a civil penalty of up to an additional #ajj1jjj for each day during which the violation continues4 7,d7 ,procedure ,any penalty imposed under this paragraph may be assessed and collected by the primary ,federal payment stablecoin regulator pursuant to the procedures set forth1 as applicable1 in-- 7i7 section #h7;i77#b7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah7;i77#b772 or 7ii7 section #bjf7k77#b7 of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghf7k77#b774 7,e7 ,notice and orders after separation from service ,the resignation1 termination of employment or participation1 or separation of an institution-affiliated party 7including a separation caused by the closing of a permitted payment stablecoin issuer7 shall not affect the jurisdiction and authority of the primary ,federal payment stablecoin regulator to issue any notice or order and proceed under this subsection against any such party1 if such notice or order is served before the end of the #f-year period beginning on the date such party ceased to be an institution-affiliated party with respect to such permitted payment stablecoin issuer4 7#f7 ,non-applicability to a ,state qualified payment stablecoin issuer ,this subsection shall not apply to a ,state qualified payment stablecoin issuer1 except as described in section #g7;e74 7c7 ,sharing of information ,a ,state payment stablecoin regulator and the primary ,federal payment stablecoin regulator shall share information on an ongoing basis with respect to a permitted payment stablecoin issuer that is a subsidiary of a ,state-chartered insured depository institution4 #g4 ,state qualified payment stablecoin issuers 7a7 ,in general ,with respect to a ,state1 a ,state payment stablecoin regulator shall have supervisory1 examination1 and enforcement authority over a ,state qualified payment stablecoin issuer of such ,state4 7b7 ,authority to enter into agreements 7#a7 ,in general ,a ,state payment stablecoin regulator may enter into a memorandum of understanding with the primary ,federal banking agency and ,comptroller setting out the manner in which the primary ,federal banking agency and ,comptroller may participate in the supervision1 examination1 and enforcement authority with respect to the ,state qualified payment stablecoin issuers of such ,state4 7#b7 ,rule of construction ,nothing in this subsection or a memorandum entered into under this subsection may be construed to limit the authority of the primary ,federal banking agency or ,comptroller under subsection 7e7 or any other provision of law4 7c7 ,sharing of information 7#a7 ,in general ,a ,state payment stablecoin regulator and1 as applicable1 the ,comptroller1 the ,board1 the ,corporation1 or the ,national ,credit ,union ,administration shall share information on an ongoing basis with respect to each ,state qualified payment stablecoin issuer of such ,state1 including a copy of all initial applications and any accompanying documents4 7#b7 ,privileges not affected by sharing of information ,the sharing of information under paragraph 7#a7 shall not be construed as waiving1 destroying1 or otherwise affecting any privilege applicable to such information under ,federal or ,state law as to any person or entity other than the ,state payment stablecoin regulator1 the ,comptroller1 the ,board1 the ,corporation1 and the ,national ,credit ,union ,administration4 7d7 ,rulemaking ,a ,state payment stablecoin regulator may1 to the same extent as the primary ,federal payment stablecoin regulators issue orders and rules under section #d applicable to a permitted payment stablecoin issuer that is not a ,state qualified payment stablecoin issuer1 issue orders and rules related to the requirements under section #d applicable to ,state qualified payment stablecoin issuers4 7e7 ,back-up enforcement authority 7#a7 ,by the primary ,federal banking agency 7,a7 ,in general ,subject to subparagraph 7,c71 the primary ,federal banking agency may1 after not less than #dh hours prior written notice to any applicable ,state payment stablecoin regulator1 take an enforcement action against a ,state qualified payment stablecoin issuer that is a subsidiary of an insured depository institution or an institution-affiliated party thereof for violations of this ,act if-- 7i7 the applicable ,state payment stablecoin regulator has not commenced an enforcement action to correct such violation2 and 7ii7 failure to take such action would create a material risk of loss to holders of such issuer's stablecoins or create a material threat to ,u4,s4 financial stability4 7,b7 ,rulemaking ,not later than the end of the #ahj-;day period beginning on the date of enactment of this ,act1 the primary ,federal banking agencies shall issue rules to set forth the standards that would be used by the primary ,federal banking agencies to exercise the back-up authority under this paragraph4 7,c7 ,back-up authority under section #f7;b7 ,solely for purposes of carrying out this paragraph1 section #f7;b7 shall apply to a ,state qualified payment stablecoin issuer that is a subsidiary of an insured depository institution as if the primary ,federal banking agency were the primary ,federal payment stablecoin regulator with respect to the ,state qualified payment stablecoin issuer4 7,d7 ,primary ,federal banking agency defined ,in this section-- 7i7 the term primary ,federal banking agency means-- 7,i7 the appropriate ,federal banking agency2 and 7,,ii7 the ,national ,credit ,union ,administration1 in the case of an insured credit union2 and 7ii7 the term primary ,federal banking agencies means the ,board1 the ,comptroller1 the ,corporation1 and the ,national ,credit ,union ,administration4 7#b7 ,by the ,comptroller 7,a7 ,in general ,subject to subparagraph 7,c71 the ,comptroller may1 after not less than #dh hours prior written notice to any applicable ,state payment stablecoin regulator1 take an enforcement action against a ,state qualified payment stablecoin issuer that is a nonbank entity or an institution-affiliated party thereof for violations of this ,act if-- 7i7 the applicable ,state payment stablecoin regulator has not commenced an enforcement action to correct such violation2 and 7ii7 failure to take such action would create a material risk of loss to holders of such issuer's stablecoins or create a material threat to ,u4,s4 financial stability4 7,b7 ,rulemaking ,not later than the end of the #ahj-;day period beginning on the date of enactment of this ,act1 the ,comptroller shall issue rules to set forth the standards that would be used by the ,comptroller to exercise the back-up authority under this paragraph4 7,c7 ,back-up authority under section #f7;b7 ,solely for purposes of carrying out this paragraph1 section #f7;b7 shall apply to a ,state qualified payment stablecoin issuer that is a nonbank entity as if the ,comptroller were the primary ,federal payment stablecoin regulator with respect to the ,state qualified payment stablecoin issuer4 7f7 ,gramm-,leach-,bliley ,act ,for purposes of title ,v of the ,gramm-,leach-,bliley ,act 7#ae ,u4,s4,c4 #fhja et seq47 a ,state qualified payment stablecoin issuer is deemed a financial institution4 7g7 ,interstate payment stablecoin market 7#a7 ,definitions ,for the purposes of this subsection-- 7,a7 the term home ,state means the ,state of a ,state qualified payment stablecoin issuer's ,state payment stablecoin regulator2 and 7,b7 the term host ,state means a ,state other than that of the ,state qualified payment stablecoin issuer's ,state payment stablecoin regulator4 7#b7 ,authority to issue payment stablecoins in host ,states ,subject to the requirements of paragraph 7#c71 a ,state qualified payment stablecoin issuer may issue payment stablecoins in a host ,state without a charter or license to issue payment stablecoins from such host ,state4 7#c7 ,state obligations ,where a ,state qualified payment stablecoin issuer issues a payment stablecoin in a host ,state pursuant to paragraph 7#b7-- 7,a7 such ,state qualified payment stablecoin issuer shall notify any ,state payment stablecoin regulator in such host ,state of the issuer's intention to do business in the host ,state not less than #cj days before such issuer commences business in the host ,state and in a manner prescribed by the host ,state's ,state payment stablecoin regulator or ,state banking regulator if such ,state does not have a regime certified under section #d7;b71 provided that such notice does not impose a de facto licensure or chartering requirement on such ,state qualified payment stablecoin issuer2 7,b7 such ,state qualified payment stablecoin issuer shall comply with all requirements of the issuer's home ,state regulatory regime when conducting business in the host ,state1 and where the host ,state maintains a payment stablecoin regulatory regime that is certified under section #d7;b71 such issuer shall comply with any obligations of the host ,state's payment stablecoin regulatory regime that exceed those of such issuer's home ,state regulatory regime2 7,c7 where the host ,state does not maintain a payment stablecoin regulatory regime that is certified under section #d7;b71 such ,state qualified payment stablecoin issuer shall remain subject to all applicable consumer protection laws of such host ,state2 and 7,d7 where the host ,state maintains a payment stablecoin regulatory regime that is certified under section #d7;b71 such ,state qualified payment stablecoin issuer shall remain subject to applicable consumer protection laws of such host ,state1 but only to the same extent as ,state qualified payment stablecoin issuers chartered or licensed in that host ,state4 #h4 ,customer protection 7a7 ,in general ,a person may only engage in the business of providing custodial or safekeeping services for payment stablecoins issued by permitted payment stablecoin issuers1 reserves described in section #d7;a77#a77;,a71 or private keys of payment stablecoins issued by permitted payment stablecoin issuers1 if the person-- 7#a7 is subject to-- 7,a7 supervision or regulation by a primary ,federal payment stablecoin regulator or a primary financial regulatory agency described under subparagraph 7,b7 or 7,c7 of section #b7ab7 of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #ecja7ab772 or 7,b7 supervision by a ,state bank supervisor1 as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7 or a ,state credit union supervisor1 as defined in section #fjjc of the ,anti-,money ,laundering ,act of #bjbj 7#ca ,u4,s4,c4 #ecaa note71 and such ,state bank supervisor or ,state credit union supervisor makes available to the ,board such information as the ,board determines necessary and relevant to the categories of information under subsection 7d72 and 7#b7 complies with the segregation requirements under subsections 7b71 7c71 and 7d71 unless such person complies with similar requirements as required by the ,board1 the ,comptroller1 the ,corporation1 the ,securities and ,exchange ,commission1 or the ,commodity ,futures ,trading ,commission1 as applicable4 7b7 ,customer property requirements ,a person described in subsection 7a7 shall-- 7#a7 treat and deal with the payment stablecoins1 private keys1 cash1 and other property of another person for whom or on whose behalf the person receives1 acquires1 or holds payment stablecoins1 private keys1 cash1 and other property 7hereinafter in this section referred to as the customer7 as belonging to such customer and not as the property of such person2 and 7#b7 take such steps as are appropriate to protect the payment stablecoins1 private keys1 cash1 and other property of a customer from the claims of creditors of the person4 7c7 ,commingling prohibited 7#a7 ,in general ,payment stablecoins1 cash1 and other property of a customer shall be separately accounted for by a person described in subsection 7a7 and shall not be commingled with the funds of the person4 7#b7 ,customer priority ,in any insolvency1 claims against reserves of a payment stablecoin issuer from persons holding payment stablecoins issued by the payment stablecoin issuer shall have priority over all other claims1 other than for administrative expenses1 against the payment stablecoin issuer4 7#c7 ,exception ,notwithstanding paragraph 7#a7-- 7,a7 the payment stablecoins1 cash1 and other property of a customer may be commingled and deposited in an omnibus account holding the payment stablecoins1 cash1 and other property of more than #a customer at a depository institution 7as defined in section #c of the ,federal ,deposit ,insurance ,act71 trust company1 ,federal credit union1 or ,state credit union2 7,b7 such share of the payment stablecoins1 cash1 and other property of the customer that shall be necessary to transfer1 adjust1 or settle a transaction or transfer of assets may be withdrawn and applied to such purposes1 including the payment of commissions1 taxes1 storage1 and other charges lawfully accruing in connection with the provision of services by a person described in subsection 7a72 7,c7 in accordance with such terms and conditions as the ,board may prescribe by rule1 regulation1 or order1 any customer payment stablecoin1 cash1 and other property described in this subsection may be commingled and deposited in customer accounts with payment stablecoins1 cash1 and other property received by the person and required by the ,board to be separately accounted for1 treated1 and dealt with as belonging to customers2 and 7,d7 an insured depository institution that provides custodial or safekeeping services for payment stablecoin reserves shall be permitted to hold payment stablecoin reserves in the form of cash on deposit4 7d7 ,regulatory information ,a person described under subsection 7a7 shall submit to the primary ,federal payment stablecoin regulator 7or1 if the person does not have a primary ,federal payment stablecoin regulator1 to the ,board7 information concerning the person's business operations and processes to protect customer payment stablecoins1 cash1 and other property1 in such form and manner as the primary ,federal payment stablecoin regulator 7or1 if the person does not have a primary ,federal payment stablecoin regulator1 the ,board7 shall determine4 7e7 ,exclusion ,the requirements of this section shall not apply to any person solely on the basis that such person engages in the business of providing hardware or software to facilitate a customer's own custody or safekeeping of the customer's payment stablecoins or private keys4 #i4 ,rule of construction ,a digital asset shall not be construed to be a payment stablecoin if it is-- 7#a7 redeemable exclusively for other digital assets1 provided that such digital assets for which it is redeemable are not primarily-- 7,a7 payment stablecoins2 or 7,b7 representations of permissible reserves described under section #d7;a77#a77;,a7 or similar such assets2 or 7#b7 primarily used within a system controlled by such digital asset's issuer as a means of accessing products1 services1 or loyalty rewards4 #aj4 ,interoperability standards 7a7 ,in general ,the primary ,federal payment stablecoin regulators1 in consultation with the ,national ,institute of ,standards and ,technology1 other relevant standard setting organizations1 and ,state governments-- 7#a7 shall assess compatibility and interoperability standards for permitted payment stablecoin issuers2 and 7#b7 if necessary1 may1 pursuant to section #eec of title #e1 ,united ,states ,code1 and in a manner consistent with the ,national ,technology ,transfer and ,advancement ,act of #aiie 7,public ,law #ajd-aac71 prescribe standards for payment stablecoin issuers to promote compatibility and interoperability4 7b7 ,agreements with foreign regulators ,the ,secretary of the ,treasury shall seek to enter into agreements with foreign jurisdictions with comparable payment stablecoin regulatory regimes to facilitate international transactions and interoperability with any ,united ,states dollar-denominated payment stablecoins issued overseas4 #aa4 ,moratorium on endogenously collateralized stablecoins 7a7 ,moratorium ,during the #b-year period beginning on the date of enactment of this ,act1 it shall be unlawful to issue an endogenously collateralized stablecoin not in existence on the date of enactment of this ,act4 7b7 ,endogenously collateralized stablecoin defined ,in this section1 the term endogenously collateralized stablecoin means any digital asset-- 7#a7 in which its issuer has represented will be converted1 redeemed1 or repurchased for a fixed amount of monetary value2 and 7#b7 that relies solely on the value of another digital asset created or maintained by the same originator to maintain the fixed price4 #ab4 ,studies and reports 7a7 ,study by ,treasury ,the ,secretary of the ,treasury1 in consultation with the ,board1 the ,comptroller1 the ,corporation1 the ,national ,credit ,union ,administration1 and the ,securities and ,exchange ,commission1 shall carry out a study of non-payment stablecoins1 including decentralized stablecoins4 7b7 ,report ,not later than #cfe days after the date of the enactment of this ,act1 the ,secretary shall provide to the ,committee on ,financial ,services of the ,house of ,representatives and the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate a report that contains all findings made in carrying out the study under subsection 7a71 including an analysis of-- 7#a7 the categories of non-payment stablecoins1 including the benefits and risks of technological design features2 7#b7 the participants in non-payment stablecoin arrangements2 7#c7 utilization and potential utilization of non-payment stablecoins2 7#d7 nature of reserve compositions2 7#e7 governance structure1 including aspects of decentralization2 7#f7 nature of public promotion and advertising2 and 7#g7 clarity and availability of consumer notices and disclosures4 7c7 ,impact study 7#a7 ,in general ,the ,secretary of the ,treasury1 in consultation with the ,board1 the ,comptroller1 the ,corporation1 the ,national ,credit ,union ,administration1 and the ,securities and ,exchange ,commission1 shall carry out a study on the impact of payment stablecoins4 7#b7 ,report ,not later than #cfe days after the date of enactment of this ,act1 the ,secretary shall provide the ,committee on ,financial ,services of the ,house of ,representatives and the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate a report containing all findings made in carrying out the study under paragraph 7#a71 including an analysis of-- 7,a7 the impact of payment stablecoins on the cost of domestic and cross-border payments and remittances2 7,b7 the role of payment stablecoins in providing access to a stable currency in the ,global ,south2 7,c7 the use of payment stablecoins by populations in the ,global ,south to mitigate exposure to the effects of inflation2 7,d7 the extent to which payment stablecoin adoption reinforces the role of the ,united ,states dollar as the world's reserve currency2 and 7,e7 the extent to which payment stablecoins may expand demand for ,united ,states ,treasury securities and reduce the cost of ,united ,states ,government borrowing4 #ac4 ,report on rulemaking status ,not later than #f months after the date of enactment of this ,act1 the primary ,federal payment stablecoin regulators shall provide a status update on the development of the rulemaking under this ,act to the ,committee on ,financial ,services of the ,house of ,representatives and the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate4 #ad4 ,authority of banking institutions 7a7 ,rule of construction ,nothing in this ,act may be construed to limit the authority of a depository institution1 national bank1 ,federal credit union1 ,state credit union1 or trust company to engage in activities permissible pursuant to applicable ,state and ,federal law1 including-- 7#a7 accepting or receiving deposits and issuing digital assets that represent deposits2 7#b7 utilizing a distributed ledger for the books and records of the entity and to affect intrabank transfers2 and 7#c7 providing custodial services for payment stablecoins1 private keys of payment stablecoins1 or reserves backing payment stablecoins4 7b7 ,regulatory review ,the primary ,federal payment stablecoin regulators shall review all existing regulations and guidance and1 if necessary1 amend such regulations or guidance or issue new regulations or guidance to clarify that regulated entities can engage in the payment stablecoin activities contemplated in1 and in accordance with1 this ,act4 7c7 ,treatment of custody activities ,the appropriate ,federal banking agency1 the ,national ,credit ,union ,administration 7in the case of a credit union71 and the ,securities and ,exchange ,commission may not require a depository institution1 national bank1 ,federal credit union1 ,state credit union1 or trust company1 or any affiliate thereof 7the entity7-- 7#a7 to include assets held in custody that are not owned by the entity as a liability on the financial statement or balance sheet of the entity1 including payment stablecoin custody or safekeeping services2 7#b7 to hold regulatory capital against assets1 including reserves backing such assets described in section #d7;a77#a77;,a71 in custody or safekeeping1 except as necessary to mitigate against operational risks inherent with the custody or safekeeping services1 as determined by-- 7,a7 the appropriate ,federal banking agency2 7,b7 the ,national ,credit ,union ,administration 7in the case of a credit union72 7,c7 a ,state bank supervisor 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac772 or 7,d7 a ,state credit union supervisor 7as defined in section #fjjc of the ,anti-,money ,laundering ,act of #bjbj 7#ca ,u4,s4,c4 #ecaa note772 and 7#c7 to recognize a liability for any obligations related to activities or services performed with respect to digital assets that the entity does not own if that liability would exceed the expense recognized in the income statement as a result of the corresponding obligation4 7d7 ,depository institution defined ,in this section1 the term depository institution has the meaning given that term in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 #ae4 ,amendments to clarify that payment stablecoins are not securities 7a7 ,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 stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined1 respectively1 in section #b of the ,,stable ,act of #bjbe44 7b7 ,investment ,company ,act of #aidj ,the ,investment ,company ,act of #aidj is amended-- 7#a7 in section #b7;a77#cf7 7#ae ,u4,s4,c4 #hj;a-#b7;a77#cf771 by adding at the end the following3 ,the term security does not include a payment stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined1 respectively1 in section #b of the ,,stable ,act of #bjbe42 and 7#b7 in section #c7;c7 7#ae ,u4,s4,c4 #hj;a-#c7;c771 by adding at the end the following3 7#ae7 ,any permitted payment stablecoin issuer1 as such term is defined in section #b of the ,,stable ,act of #bjbe4 4 7c7 ,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 stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined1 respectively1 in section #b of the ,,stable ,act of #bjbe44 7d7 ,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 at the end the following3 ,the term security does not include a payment stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined1 respectively1 in section #b of the ,,stable ,act of #bjbe44 7e7 ,securities ,investor ,protection ,act of #aigj ,section #af7ad7 of the ,securities ,investor ,protection ,act of #aigj 7#ae ,u4,s4,c4 #ghlll7#ad77 is amended by adding at the end the following3 ,the term security does not include a payment stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined1 respectively1 in section #b of the ,,stable ,act of #bjbe44 ,may #f1 #bjbe,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed