,,ii ,calendar ,no4 #ff #aaith ,,congress #ast ,session ,s4 #aehb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #a1 #bjbe,mr4 ,hagerty 7for himself1 ,ms4 ,lummis1 and ,mr4 ,scott of ,south ,carolina7 introduced the following bill2 which was read the first time ,may #e1 #bjbe,read the second time and placed on the calendar ,a ,,bill ,to provide for the regulation of payment stablecoins1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act or the ,,genius ,act4 #b4 ,definitions ,in this ,act3 7#a7 ,appropriate ,federal banking agency ,the term appropriate ,federal banking agency has the meaning given that term in 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 ,office of the ,comptroller of the ,currency4 7#e7 ,corporation ,the term ,corporation means the ,federal ,deposit ,insurance ,corporation4 7#f7 ,digital asset ,the term digital asset means any digital representation of value that is recorded on a cryptographically secured distributed ledger4 7#g7 ,digital asset service provider ,the term digital asset service provider-- 7,a7 means a person that1 for compensation or profit1 engages in the business in the ,united ,states 7including on behalf of customers or users in the ,united ,states7 of-- 7i7 exchanging digital assets for monetary value2 7ii7 exchanging digital assets for other digital assets2 7iii7 transferring digital assets to a third party2 7iv7 acting as a digital asset custodian2 or 7v7 participating in financial services relating to digital asset issuance2 and 7,b7 does not include-- 7i7 a distributed ledger protocol2 7ii7 developing1 operating1 or engaging in the business of developing distributed ledger protocols or self-custodial software interfaces2 7iii7 an immutable and self-custodial software interface2 7iv7 developing1 operating1 or engaging in the business of validating transactions or operating a distributed ledger node2 or 7v7 participating in a liquidity pool or other similar mechanism for the provisioning of liquidity for peer-to-peer transactions4 7#h7 ,distributed ledger ,the term distributed ledger means technology in which data is shared across a network that creates a public digital ledger of verified transactions or information among network participants and cryptography is used to link the data to maintain the integrity of the public ledger and execute other functions4 7#i7 ,distributed ledger protocol ,the term distributed ledger protocol means publicly available and accessible executable software deployed to a distributed ledger1 including smart contracts or networks of smart contracts4 7#aj7 ,federal branch ,the term ,federal branch has the meaning given that term in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7#aa7 ,federal qualified payment stablecoin issuer ,the term ,federal qualified payment stablecoin issuer means-- 7,a7 a nonbank entity1 other than a ,state qualified payment stablecoin issuer1 approved by the ,comptroller1 pursuant to section #e1 to issue payment stablecoins2 7,b7 an uninsured national bank-- 7i7 that is chartered by the ,comptroller1 pursuant to title ,,lxii of the ,revised ,statutes2 and 7ii7 that is approved by the ,comptroller1 pursuant to section #e1 to issue payment stablecoins2 and 7,c7 a ,federal branch that is approved by the ,comptroller1 pursuant to section #e1 to issue payment stablecoins4 7#ab7 ,foreign payment stablecoin issuer ,the term foreign payment stablecoin issuer means an issuer of a payment stablecoin that is-- 7,a7 organized under the laws of or domiciled in a foreign country1 a territory of the ,united ,states1 ,puerto ,rico1 ,guam1 ,american ,samoa1 or the ,virgin ,islands2 and 7,b7 not a permitted payment stablecoin issuer4 7#ac7 ,institution-affiliated party ,with respect to a permitted payment stablecoin issuer1 the term institution-affiliated party means any director1 officer1 employee1 or controlling stockholder of the permitted payment stablecoin issuer4 7#ad7 ,insured credit union ,the term insured credit union has the meaning given that term in section #aja of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageb74 7#ae7 ,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#af7 ,lawful order ,the term lawful order means any final and valid writ1 process1 order1 rule1 decree1 command1 or other requirement issued or promulgated under ,federal law1 issued by a court of competent jurisdiction or by an authorized ,federal agency pursuant to its statutory authority1 that-- 7,a7 requires a person to seize1 freeze1 burn1 or prevent the transfer of payment stablecoins issued by the person2 7,b7 specifies the payment stablecoins or accounts subject to blocking with reasonable particularity2 and 7,c7 is subject to judicial or administrative review or appeal as provided by law4 7#ag7 ,monetary value ,the term monetary value means a national currency or deposit 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac77 denominated in a national currency4 7#ah7 ,money ,the term money-- 7,a7 means a medium of exchange currently authorized or adopted by a domestic or foreign government2 and 7,b7 includes a monetary unit of account established by an intergovernmental organization or by agreement between #b or more countries4 7#ai7 ,national currency ,the term national currency means each of the following3 7,a7 ,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 #daa774 7,b7 ,money standing to the credit of an account with a ,federal ,reserve ,bank4 7,c7 ,money issued by a foreign central bank4 7,d7 ,money issued by an intergovernmental organization pursuant to an agreement by #b or more governments4 7#bj7 ,nonbank entity ,the term nonbank entity means a person that is not a depository institution or subsidiary of a depository institution4 7#ba7 ,offer ,the term offer means to make available for purchase1 sale1 or exchange4 7#bb7 ,payment stablecoin ,the term payment stablecoin-- 7,a7 means a digital asset-- 7i7 that is1 or is designed to be1 used as a means of payment or settlement2 and 7ii7 the issuer of which-- 7,i7 is obligated to convert1 redeem1 or repurchase for a fixed amount of monetary value1 not including a digital asset denominated in a fixed amount of monetary value2 and 7,,ii7 represents that such issuer will maintain1 or create the reasonable expectation that it will maintain1 a stable value relative to the value of a fixed amount of monetary value2 and 7,b7 does not include a digital asset that-- 7i7 is a national currency2 7ii7 is a deposit 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac771 including a deposit recorded using distributed ledger technology2 or 7iii7 is a security1 as defined in section #b of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b71 section #c of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c71 or section #b of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#b71 except that1 for the avoidance of doubt1 no bond1 note1 evidence of indebtedness1 or investment contract that was issued by a permitted payment stablecoin issuer shall qualify as a security solely by virtue of its satisfying the conditions described in subparagraph 7,a71 consistent with section #ag of this ,act4 7#bc7 ,permitted payment stablecoin issuer ,the term permitted payment stablecoin issuer means a person formed in the ,united ,states that-- 7,a7 is-- 7i7 a subsidiary of an insured depository institution that has been approved to issue payment stablecoins under section #e2 7ii7 a ,federal qualified payment stablecoin issuer2 or 7iii7 a ,state qualified payment stablecoin issuer2 and 7,b7 does not offer a payment of yield or interest on its issued payment stablecoin4 7#bd7 ,person ,the term person means an individual1 partnership1 company1 corporation1 association1 trust1 estate1 cooperative organization1 or other business entity1 incorporated or unincorporated4 7#be7 ,primary ,federal payment stablecoin regulator ,the term primary ,federal payment stablecoin regulator means-- 7,a7 with respect to a subsidiary of an insured depository institution 7other than an insured credit union71 the appropriate ,federal banking agency of such insured depository institution2 7,b7 with respect to an insured credit union or a subsidiary of an insured credit union1 the ,national ,credit ,union ,administration2 7,c7 with respect to a ,state chartered depository institution not specified under subparagraph 7,a71 the ,corporation1 the ,comptroller1 or the ,board2 and 7,d7 with respect to a ,federal qualified payment stablecoin issuer1 the ,comptroller4 7#bf7 ,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#bg7 ,state ,the term ,state means each of the several ,states of the ,united ,states1 the ,district of ,columbia1 and each territory of the ,united ,states4 7#bh7 ,state chartered depository institution ,the term ,state chartered depository institution has the meaning given the term ,state depository institution in section #c7;c7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7;c774 7#bi7 ,state payment stablecoin regulator ,the term ,state payment stablecoin regulator means a ,state agency that has primary regulatory and supervisory authority in such ,state over entities that issue payment stablecoins4 7#cj7 ,state qualified payment stablecoin issuer ,the term ,state qualified payment stablecoin issuer means an entity that-- 7,a7 is legally established under the laws of a ,state and approved to issue payment stablecoins by a ,state payment stablecoin regulator2 and 7,b7 is not an uninsured national bank chartered by the ,comptroller pursuant to title ,,lxii of the ,revised ,statutes1 a ,federal branch1 an insured depository institution1 or a subsidiary of such national bank1 ,federal branch1 or insured depository institution4 7#ca7 ,subsidiary ,the term subsidiary has the meaning given that term in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7#cb7 ,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 in 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 a subsidiary of a ,state chartered insured credit union authorized under ,state law4 #c4 ,issuance and treatment of payment stablecoins 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 ,prohibition on offers or sales 7#a7 ,in general ,except as provided in subsection 7c7 and section #ah1 beginning on the date that is #c years after the date of enactment of this ,act1 it shall be unlawful for any digital asset service provider to offer or sell a payment stablecoin to a person in the ,united ,states1 unless the payment stablecoin is issued by a permitted payment stablecoin issuer4 7#b7 ,foreign payment stablecoin issuers ,it shall be unlawful for any person to offer1 sell1 or otherwise make available in the ,united ,states a payment stablecoin issued by a foreign payment stablecoin issuer unless the foreign payment stablecoin issuer has the technological capability to comply1 and will comply1 with the terms of any lawful order or reciprocal arrangement pursuant to section #ah4 7c7 ,limited safe harbors 7#a7 ,in general ,the ,secretary of the ,treasury may issue regulations providing safe harbors from subsection 7a7 that are-- 7,a7 consistent with the purposes of the ,act2 7,b7 limited in scope2 and 7,c7 apply to a de minimis volume of transactions1 as determined by the ,secretary of the ,treasury4 7#b7 ,unusual and ,exigent ,circumstances ,if the ,secretary of the ,treasury determines that unusual and exigent circumstances exist1 the ,secretary may provide limited safe harbors from subsection 7a74 7d7 ,rulemaking ,the ,secretary of the ,treasury may1 as the ,secretary determines appropriate1 issue regulations to implement this section1 including regulations to define statutory terms4 7e7 ,extraterritorial effect ,this section is intended to have extraterritorial effect if conduct involves the offer or sale of a payment stablecoin to a person located in the ,united ,states4 7f7 ,penalty for violation 7#a7 ,in general ,whoever knowingly participates in a violation of subsection 7a7 shall be fined not more than #a1jjj1jjj for each such violation1 imprisoned for not more than #e years1 or both4 7#b7 ,referral to ,attorney ,general ,if a primary ,federal payment stablecoin regulator has reason to believe that any person has knowingly violated subsection 7a71 the primary ,federal payment stablecoin regulator may refer the matter to the ,attorney ,general4 7g7 ,treatment ,a payment stablecoin that is not issued by a permitted payment stablecoin issuer shall not be-- 7#a7 treated as cash or a cash equivalent for accounting purposes2 7#b7 eligible as cash or a cash equivalent margin and collateral for futures commission merchants1 derivative clearing organizations1 broker-dealers1 registered clearing agencies1 and swap dealers2 or 7#c7 acceptable as a settlement asset to facilitate wholesale payments between banking organizations or by a payment infrastructure to facilitate exchange and settlement among banking organizations4 7h7 ,rule of construction ,this section shall not apply to-- 7#a7 the direct transfer of digital assets between #b individuals acting on their own behalf and for their own lawful purposes1 without the involvement of an intermediary2 7#b7 to any transaction involving the receipt of digital assets by an individual between an account owned by the individual in the ,united ,states and an account owned by the individual abroad that are offered by the same parent company2 or 7#c7 to any transaction by means of a software or hardware wallet that facilitates an 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 ,a permitted payment stablecoin issuer shall-- 7,a7 maintain reserves backing the outstanding payment stablecoins of the permitted payment stablecoin issuer on an at least #a to #a basis1 with reserves comprising-- 7i7 ,united ,states coins and 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 or insured shares at an insured depository institution 7including any foreign branches or agents1 including correspondent banks1 of an insured depository institution71 subject to limitations established by the ,corporation and the ,national ,credit ,union ,administration1 as applicable1 to address safety and soundness risks of such insured depository institution2 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 money received under repurchase agreements1 with the permitted payment stablecoin issuer acting as a seller of securities and with an overnight maturity1 that are backed by ,treasury bills with a maturity of #ic days or less2 7v7 reverse repurchase agreements1 with the permitted payment stablecoin issuer acting as a purchaser of securities and with an overnight maturity1 that are collateralized by ,treasury notes1 bills1 or bonds on an overnight basis1 subject to overcollateralization in line with standard market terms1 that are-- 7,i7 tri-party2 7,,ii7 centrally cleared through a clearing agency registered with the ,securities and ,exchange ,commission2 or 7,,iii7 bilateral with a counterparty that the issuer has determined to be adequately creditworthy even in the event of severe market stress2 7vi7 securities issued by an investment company registered under section #h7;a7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#h7;a771 or other registered ,government money market fund1 and that are invested solely in underlying assets described in clauses 7i7 through 7v72 7vii7 any other similarly liquid ,federal ,government-issued asset approved by the primary ,federal payment stablecoin regulator1 in consultation with the ,state payment stablecoin regulator1 if applicable1 of the permitted payment stablecoin issuer2 or 7viii7 any reserve described in clause 7i7 through 7iii7 or clause 7vi7 through 7vii7 in tokenized form1 provided that such reserves comply with all applicable laws and regulations2 7,b7 publicly disclose the issuer's redemption policy1 which shall-- 7i7 establish clear and conspicuous procedures for timely redemption of outstanding payment stablecoins1 provided that any discretionary limitations on timely redemptions can only be imposed by a ,state qualified payment stablecoin regulator1 the ,corporation1 the ,comptroller1 or the ,board1 consistent with section #g2 and 7ii7 publicly1 clearly1 and conspicuously disclose in plain language all fees associated with purchasing or redeeming the payment stablecoins1 provided that such fees can only be changed upon not less than #g days' prior notice to consumers2 and 7,c7 publish 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 in subparagraph 7,a71 including the average tenor and geographic location of custody of each category of reserve instruments4 7#b7 ,prohibition on rehypothecation ,reserves required under paragraph 7#a77;,a7 may not be pledged1 rehypothecated1 or reused by the permitted payment stablecoin issuer1 either directly or indirectly1 except for the purpose of-- 7,a7 satisfying margin obligations in connection with investments in permitted reserves under clauses 7iv7 and 7v7 of paragraph 7#a77;,a72 7,b7 satisfying obligations associated with the use1 receipt1 or provision of standard custodial services2 or 7,c7 creating liquidity to meet reasonable expectations of requests to redeem payment stablecoins1 such that reserves in the form of ,treasury bills may be sold as purchased securities for repurchase agreements with a maturity of #ic days or less1 provided that either-- 7i7 the repurchase agreements are cleared by a clearing agency registered with the ,securities and ,exchange ,commission2 or 7ii7 the permitted payment stablecoin issuer receives the prior approval of its primary ,federal payment stablecoin regulator or ,state payment stablecoin regulator1 as applicable4 7#c7 ,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 a 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 a certification as to the accuracy of the monthly report to1 as applicable-- 7i7 the primary ,federal payment stablecoin regulator of the permitted payment stablecoin issuer2 or 7ii7 the ,state payment stablecoin regulator of the permitted payment stablecoin issuer4 7,c7 ,criminal penalty ,any person who submits a certification required under subparagraph 7,b7 knowing that such certification is false shall be subject to the same criminal penalties as those set forth under section #acej7;c7 of title #ah1 ,united ,states ,code4 7#d7 ,capital1 liquidity1 and risk management requirements 7,a7 ,in general ,the primary ,federal payment stablecoin regulators shall1 or in the case of a ,state qualified payment stablecoin issuer1 the ,state payment stablecoin regulator shall1 consistent with section #ac1 issue regulations implementing-- 7i7 capital requirements applicable to permitted payment stablecoin issuers that-- 7,i7 are tailored to the business model and risk profile of permitted payment stablecoin issuers2 7,,ii7 do not exceed requirements that are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers2 and 7,,iii7 in the case of the primary ,federal payment stablecoin regulators1 if the primary ,federal payment stablecoin regulators determine that a capital buffer is necessary to ensure the ongoing operations of permitted payment stablecoin issuers1 may include capital buffers that are tailored to the business model and risk profile of permitted payment stablecoin issuers2 7ii7 the liquidity standard under paragraph 7#a77;,a72 7iii7 reserve asset diversification1 including deposit concentration at banking institutions1 and interest rate risk management standards applicable to permitted payment stablecoin issuers that-- 7,i7 are tailored to the business model and risk profile of permitted payment stablecoin issuers2 and 7,,ii7 do not exceed standards that are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers2 and 7iv7 appropriate operational1 compliance1 and information technology risk management principles-based requirements and standards1 including ,bank ,secrecy ,act and sanctions compliance standards1 that-- 7,i7 are tailored to the business model and risk profile of permitted payment stablecoin issuers2 and 7,,ii7 are consistent with applicable law4 7,b7 ,rule of construction ,nothing in this paragraph shall 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 issuers on an individual basis or by category1 taking into consideration the capital structure1 business model risk profile1 complexity1 financial activities 7including financial activities of subsidiaries71 size1 and any other risk-related factors of permitted payment stablecoin issuers that a primary ,federal payment stablecoin regulator determines appropriate1 provided that such tailoring or differentiation occurs without respect to whether a permitted payment stablecoin issuer is regulated by a ,state payment stablecoin regulator2 or 7ii7 any supervisory1 regulatory1 or enforcement authority of a primary ,federal payment stablecoin regulator to further the safe and sound operation of an institution for which the primary ,federal payment stablecoin regulator is the appropriate regulator4 7,c7 ,applicability of existing capital standards 7i7 ,definition ,in this subparagraph1 the term depository institution holding company has the meaning given that term under section #aga7;a77#c7 of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecga7;a77#c774 7ii7 ,applicability of ,financial ,stability ,act ,with respect to the promulgation of rules under subparagraph 7,a7 and clauses 7iii7 and 7iv7 of this subparagraph1 section #aga of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecga7 shall not apply4 7iii7 ,rules relating to leverage capital requirements or risk-based capital requirements ,any rule issued by an appropriate ,federal banking agency that imposes1 on a consolidated basis1 a leverage capital requirement or risk-based capital requirement with respect to an insured depository institution or depository institution holding company shall provide that1 for purposes of such leverage capital requirement or risk-based capital requirement1 any insured depository institution or depository institution holding company that includes1 on a consolidated basis1 a permitted payment stablecoin issuer1 shall not be required to hold1 with respect to such 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 issued pursuant to subparagraph 7,a77i74 7iv7 ,modifications ,not later than the earlier of the rulemaking deadline under section #ac or the date on which the ,federal payment stablecoin regulators issue regulations to carry out this section1 each appropriate ,federal banking agency shall amend or otherwise modify any regulation of the appropriate ,federal banking agency described in clause 7iii7 so that such regulation1 as amended or otherwise modified1 complies with clause 7iii7 of this subparagraph4 7#e7 ,treatment under the ,bank ,secrecy ,act and sanctions laws 7,a7 ,in general ,a permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the ,bank ,secrecy ,act1 and as such1 shall be subject to all ,federal laws applicable to a financial institution located in the ,united ,states relating to economic sanctions1 prevention of money laundering1 customer identification1 and due diligence1 including1 as applicable-- 7i7 maintenance of an effective anti-money laundering and economic sanctions compliance program1 which shall include appropriate risk assessments1 verification of sanctions lists1 and designation of an officer to supervise the programs2 7ii7 retention of appropriate records2 7iii7 monitoring and reporting of any suspicious transaction relevant to a possible violation of law or regulation2 7iv7 policies and procedures to block1 freeze1 and reject specific or impermissible transactions that violate ,federal or ,state laws1 rules1 or regulations2 and 7v7 maintenance of an effective customer identification program1 including identification and verification of account holders with the permitted payment stablecoin issuer1 high-value transactions1 and appropriate enhanced due diligence4 7,b7 ,rulemaking ,the ,financial ,crimes ,enforcement ,network shall adopt rules1 tailored to the size and complexity of permitted payment stablecoin issuers1 to implement subparagraph 7,a74 7,c7 ,reservation of authority ,nothing in this ,act shall restrict the authority of the ,secretary of the ,treasury to implement1 administer1 and enforce the provisions of subchapter ,,ii of chapter #ec of title #ca1 ,united ,states ,code4 7#f7 ,coordination with permitted payment stablecoin issuers with respect to blocking of property and technological capabilities to comply with lawful orders 7,a7 ,in general ,the ,secretary of the ,treasury-- 7i7 shall1 to the best of the ,secretary's ability1 coordinate with a permitted payment stablecoin issuer before taking any action to block and prohibit transactions in property and interests in property of a foreign person to ensure that the permitted payment stablecoin issuer is able to effectively block a payment stablecoin of the foreign person upon issuance of the payment stablecoin2 and 7ii7 is not required to notify any permitted payment stablecoin issuer of any intended action described in clause 7i7 prior to taking such action4 7,b7 ,compliance with lawful orders ,a permitted payment stablecoin issuer may issue payment stablecoins only if the issuer has the technological capability to comply1 and will comply1 with the terms of any lawful order4 7,c7 ,report required ,not later than #a year after the date of enactment of this ,act1 the ,attorney ,general and the ,secretary of the ,treasury shall submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives a report1 which may include a classified annex if applicable1 on the coordination with permitted payment stablecoin issuers required under subparagraph 7,a74 7,d7 ,rule of construction ,nothing in this paragraph shall be construed to alter or affect the authority of ,state payment stablecoin regulators with respect to the offer of foreign-issued digital assets that are issued within a foreign jurisdiction4 7#g7 ,limitation on payment stablecoin activities 7,a7 ,in general ,a permitted payment stablecoin issuer may only-- 7i7 issue payment stablecoins2 7ii7 redeem payment stablecoins2 7iii7 manage related reserves1 including purchasing1 selling1 and holding reserve assets or providing custodial services for reserve assets1 consistent with ,state and ,federal law2 7iv7 provide custodial or safekeeping services for payment stablecoins1 required reserves1 or private keys of payment stablecoins1 consistent with this ,act2 and 7v7 undertake other activities that directly support any of the activities described in clauses 7i7 through 7iv74 7,b7 ,rule of construction ,nothing in subparagraph 7,a7 shall limit a permitted payment stablecoin issuer from engaging in non-payment stablecoin activities that are authorized by the primary ,federal payment stablecoin regulator or the ,state payment stablecoin regulator1 as applicable1 consistent with all other ,federal and ,state laws1 provided that the claims of payment stablecoin holders rank senior to any potential claims of non-stablecoin creditors with respect to the reserve assets1 consistent with section #aa and the amendments made by that section4 7#h7 ,prohibition on tying 7,a7 ,in general ,a permitted payment stablecoin issuer may not provide services to a customer on the condition that the customer obtain an additional paid product or service from the permitted payment stablecoin issuer1 or any of its subsidiaries1 or agree to not obtain an additional product or service from a competitor4 7,b7 ,regulations ,the ,board may issue such regulations as are necessary to carry out this paragraph1 and1 in consultation with other relevant primary ,federal payment stablecoin regulators1 may by regulation or order1 permit such exceptions to subparagraph 7,a7 as the ,board considers will not be contrary to the purpose of this ,act4 7#i7 ,prohibition on the use of deceptive names ,a permitted payment stablecoin issuer may not-- 7,a7 use any combination of terms relating to the ,united ,states ,government1 including ,united ,states and ,united ,states ,government1 in the name of a payment stablecoin2 or 7,b7 market a payment stablecoin in such a way that a reasonable person would perceive the payment stablecoin to be-- 7i7 legal tender1 as described in section #eajc of title #ca1 ,united ,states ,code2 7ii7 issued by the ,united ,states2 or 7iii7 guaranteed or approved by the ,government of the ,united ,states4 7#aj7 ,audits and reports 7,a7 ,annual financial statement 7i7 ,in general ,a permitted payment stablecoin issuer with more than #ej1jjj1jjj1jjj in consolidated total outstanding issuance1 that is not subject to the reporting requirements under section #ac7;a7 or #ae7;d7 of the ,securities and ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghm1 #gho7d771 shall prepare1 in accordance with generally accepted accounting principles1 an annual financial statement1 which shall include the disclosure of any related party transactions1 as defined by such generally accepted accounting principles4 7ii7 ,auditor ,a registered public accounting firm shall perform an audit of the annual financial statements described in clause 7i74 7iii7 ,standards ,an audit described in clause 7ii7 shall be conducted in accordance with all applicable auditing standards established by the ,public ,company ,accounting ,oversight ,board1 including those relating to auditor independence1 internal controls1 and related party transactions4 7iv7 ,rule of construction ,nothing in this subparagraph shall be construed to limit1 alter1 or expand the jurisdiction of the ,public ,company ,accounting ,oversight ,board over permitted payment stablecoin issuers or registered public accounting firms4 7,b7 ,public disclosure and submission to ,federal regulators ,each permitted payment stablecoin issuer required to prepare an audited annual financial statement under subparagraph 7,a7 shall-- 7i7 make such audited financial statements publicly available on the website of the permitted payment stablecoin issuer2 and 7ii7 submit such audited financial statements annually to their primary ,federal payment stablecoin regulator4 7,c7 ,consultation ,the primary ,federal payment stablecoin regulators may consult with the ,public ,company ,accounting ,oversight ,board to determine best practices for determining audit oversight and to detect fraud1 material misstatements1 and other financial misrepresentations that could mislead permitted payment stablecoin holders4 7#aa7 ,eligibility ,the requirement to maintain reserves under paragraph 7#a77;,a7 may not be construed as expanding or contracting eligibility to qualify as a depository institution under section #ai7;b77#a77;,a7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #dfa7;b77#a77;,a774 7#ab7 ,rule of construction ,compliance with this section does not alter or affect any additional requirement of a ,state payment stablecoin regulator that may apply relating to the offering of payment stablecoins4 7b7 ,regulation by the comptroller 7#a7 ,in general ,notwithstanding section #eacf;,c of the ,revised ,statutes 7#ab ,u4,s4,c4 #be;b71 section #f of the ,home ,owners' ,loan ,act 7#ab ,u4,s4,c4 #adfe71 or any applicable ,state law relating to licensing and supervision1 a ,federal qualified payment stablecoin issuer approved by the ,comptroller pursuant to section #e of this ,act shall be licensed1 regulated1 examined1 and supervised exclusively by the ,comptroller1 which shall have authority1 in coordination with other relevant primary ,federal payment stablecoin regulators and ,state payment stablecoin regulators1 to issue such regulations and orders as necessary to ensure financial stability and implement subsection 7a74 7#b7 ,conforming amendment ,section #cbd7;b7 of the ,revised ,statutes 7#ab ,u4,s4,c4 #a7;b77 is amended by adding at the end the following3 7#c7 ,regulation of ,federal qualified payment stablecoin issuers ,the ,comptroller of the ,currency shall1 in coordination with other relevant regulators and consistent with section #ac of the ,,genius ,act1 issue such regulations and orders as necessary to ensure financial stability and implement section #d7;a7 of that ,act4 4 7c7 ,state-level regulatory regimes 7#a7 ,option for ,state-level regulatory regime ,notwithstanding the ,federal regulatory framework established under this ,act1 a ,state qualified payment stablecoin issuer with a consolidated total outstanding issuance of not more than #aj1jjj1jjj1jjj may opt for regulation under a ,state-level regulatory regime1 provided that the ,state-level regulatory regime is substantially similar to the ,federal regulatory framework under that subsection4 7#b7 ,principles ,the ,secretary of the ,treasury shall1 through notice and comment rulemaking1 establish broad-based principles for determining whether a ,state-level regulatory regime is substantially similar to the ,federal regulatory framework under this ,act4 7#c7 ,review ,state payment stablecoin regulators shall review ,state-level regulatory regimes according to the principles established by the ,secretary of the ,treasury under paragraph 7#b7 and for the purposes of establishing any necessary cooperative agreements to implement section #g7;f74 7#d7 ,certification 7,a7 ,initial certification ,subject to subparagraph 7,b71 not later than #a year after the effective date of this ,act1 a ,state payment stablecoin regulator shall submit to the ,stablecoin ,certification ,review ,committee an initial certification that the ,state-level regulatory regime meets the criteria for substantial similarity established pursuant to paragraph 7#b74 7,b7 ,form of certification ,the initial certification required under subparagraph 7,a7 shall contain1 in a form prescribed by the ,stablecoin ,certification ,review ,committee1 an attestation that the ,state-level regulatory regime meets the criteria for substantial similarity established pursuant to paragraph 7#b74 7,c7 ,annual recertification ,not later than a date to be determined by the ,secretary of the ,treasury each year1 a ,state payment stablecoin regulator shall submit to the ,stablecoin ,certification ,review ,committee an additional certification that confirms the accuracy of the initial certification submitted under subparagraph 7,a74 7#e7 ,certification review 7,a7 ,in general ,not later than #cj days after the date on which a ,state payment stablecoin regulator submits an initial certification or a recertification under paragraph 7#d71 the ,stablecoin ,certification ,review ,committee shall-- 7i7 approve such certification if the ,committee unanimously determines that the ,state-level regulatory regime meets or exceeds the standards and requirements described in subsection 7a72 or 7ii7 deny such certification and provide the ,state payment stablecoin regulator with a written explanation of the denial1 describing the reasoned basis for the denial with sufficient detail to enable the ,state payment stablecoin regulator and ,state-level regulatory regime to make any changes necessary to meet or exceed the standards and requirements described in subsection 7a74 7,b7 ,recertifications ,with respect to recertification certification submitted by a ,state payment stablecoin regulator under paragraph 7#d71 the ,stablecoin ,certification ,review ,committee shall only deny the recertification if-- 7i7 the ,state-level regulatory regime has materially changed from the prior certification or there has been a significant change in circumstances2 and 7ii7 the material change in the regime or significant change in circumstances described in clause 7i7 is such that the ,state-level regulatory regime will not promote the safe and sound operation of ,state qualified payment stablecoin issuers under its supervision4 7,c7 ,opportunity to cure 7i7 ,in general ,with respect to a denial described under subparagraph 7,a7 or 7,b71 the ,stablecoin ,certification ,review ,committee shall provide the ,state payment stablecoin regulator with not less than #ahj days from the date on which the ,state payment stablecoin regulator is notified of such denial to-- 7,i7 make such changes as may be necessary to ensure the ,state-level regulatory regime meets or exceeds the standards described in subsection 7a72 and 7,,ii7 resubmit the initial certification or recertification4 7ii7 ,denial ,if1 after a ,state payment stablecoin regulator resubmits an initial certification or recertification under clause 7i71 the ,stablecoin ,certification ,review ,committee again determines that the initial certification or recertification shall result in a denial1 the ,stablecoin ,certification ,review ,committee shall1 not later than #cj days after such determination1 provide the ,state payment stablecoin regulator with a written explanation for the determination4 7,d7 ,appeal of denial ,a ,state payment stablecoin regulator in receipt of a denial under subparagraph 7,c77ii7 may appeal the denial to the ,united ,states ,court of ,appeals for the ,district of ,columbia ,circuit4 7,e7 ,right to resubmit ,a ,state payment stablecoin regulator in receipt of a denial under this paragraph shall not be prohibited from resubmitting a new certification under paragraph 7#d74 7#f7 ,list ,the ,secretary of the ,treasury shall publish and maintain in the ,federal ,register and on the website of the ,department of the ,treasury a list of ,states that have submitted initial certifications and recertifications under paragraph 7#d74 7#g7 ,stablecoin ,certification ,review ,committee establishment ,for purposes of this subsection1 the ,stablecoin ,certification ,review ,committee shall consist of the ,secretary of the ,treasury1 the ,chair of the ,board1 and the ,chair of the ,corporation4 7d7 ,transition to ,federal oversight 7#a7 ,depository institution ,a ,state chartered depository institution that is a ,state qualified payment stablecoin issuer with a payment stablecoin with a consolidated total outstanding issuance of more than #aj1jjj1jjj1jjj shall-- 7,a7 not later than #cfj days after the payment stablecoin reaches such threshold1 transition to the ,federal regulatory framework of the primary ,federal payment stablecoin regulator of the ,state chartered depository institution1 which shall be administered by the ,state payment stablecoin regulator of the ,state chartered depository institution and the primary ,federal payment stablecoin regulator acting jointly2 or 7,b7 beginning on the date the payment stablecoin reaches such threshold1 cease issuing new payment stablecoins until the payment stablecoin is under the #aj1jjj1jjj1jjj consolidated total outstanding issuance threshold4 7#b7 ,other institutions ,a ,state qualified payment stablecoin issuer not described in paragraph 7#a7 with a payment stablecoin with a consolidated total outstanding issuance of more than #aj1jjj1jjj1jjj shall-- 7,a7 not later than #cfj days after the payment stablecoin reaches such threshold1 transition to the ,federal regulatory framework under subsection 7a7 administered by the relevant ,state payment stablecoin regulator and the ,comptroller1 acting in coordination2 or 7,b7 beginning on the date the payment stablecoin reaches such threshold1 cease issuing new payment stablecoins until the payment stablecoin is under the #aj1jjj1jjj1jjj consolidated total outstanding issuance threshold4 7#c7 ,waiver 7,a7 ,in general ,notwithstanding paragraphs 7#a7 and 7#b71 the applicable primary ,federal payment stablecoin regulator may permit a ,state qualified payment stablecoin issuer with a payment stablecoin with a consolidated total outstanding issuance of more than #aj1jjj1jjj1jjj to remain solely supervised by a ,state payment stablecoin regulator4 7,b7 ,criteria for waiver ,the primary ,federal payment stablecoin regulator shall consider the following exclusive criteria in determining whether to issue a waiver under this paragraph3 7i7 ,the capital maintained by the ,state qualified payment stablecoin issuer4 7ii7 ,the past operations and examination history of the ,state qualified payment stablecoin issuer4 7iii7 ,the experience of the ,state payment stablecoin regulator in supervising payment stablecoin and digital asset activities4 7iv7 ,the supervisory framework1 including regulations and guidance1 of the ,state qualified payment stablecoin issuer with respect to payment stablecoins and digital assets4 7,c7 ,rule of construction 7i7 ,federal oversight ,a ,state qualified payment stablecoin issuer subject to ,federal oversight under paragraph 7#a7 or 7#b7 of this subsection that does not receive a waiver under this paragraph shall continue to be supervised by the ,state payment stablecoin regulator of the ,state qualified payment stablecoin issuer jointly with the primary ,federal payment stablecoin regulator4 ,nothing in this subsection shall require the ,state qualified payment stablecoin issuer to convert to a ,federal charter4 7ii7 ,state oversight ,a ,state qualified payment stablecoin issuer supervised by a ,state payment stablecoin regulator that has established a prudential regulatory regime 7including regulations and guidance7 for the supervision of digital assets or payment stablecoins before the #ij-;day period ending on the date of enactment of this ,act that has been certified pursuant to subsection 7c7 and has approved #a or more issuers to issue a payment stablecoin under the supervision of such ,state payment stablecoin regulator1 shall be presumptively approved for a waiver under this paragraph1 unless the ,federal payment stablecoin regulator finds1 by clear and convincing evidence1 that the requirements of subparagraph 7,b7 are not substantially met with respect to that issuer or that the issuer poses significant safety and soundness risks to the financial system of the ,united ,states4 7e7 ,misrepresentation of insured status 7#a7 ,in general ,payment stablecoins shall not be backed by the full faith and credit of the ,united ,states1 guaranteed by the ,united ,states ,government1 subject to deposit insurance by the ,federal ,deposit ,insurance ,corporation1 or subject to share insurance by the ,national ,credit ,union ,administration4 7#b7 ,misrepresentation of insured status 7,a7 ,in general ,it shall be unlawful to represent that payment stablecoins are 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 insurance1 provided that this subparagraph shall not prohibit a permitted payment stablecoin issuer from disclosing which assets in its reserves are backed by the full faith and credit of the ,united ,states or what percentage of its total reserves are backed by the full faith and credit of the ,united ,states4 7,b7 ,penalty ,a violation of subparagraph 7,a7 shall be considered a violation of section #ah7;a77#d7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahbh7;a77#d77 or section #gji of title #ah1 ,united ,states ,code1 as applicable4 7#c7 ,marketing 7,a7 ,in general ,it shall be unlawful to market a product in the ,united ,states as a payment stablecoin unless the product is issued pursuant to this ,act4 7,b7 ,penalty ,whoever knowingly and willfully participates in a violation of subparagraph 7,a7 shall be fined by the ,department of the ,treasury not more than #ejj1jjj for each such violation4 7,c7 ,determination of the number of violations ,for purposes of determining the number of violations for which to impose penalties under subparagraph 7,b71 separate acts of noncompliance are a single violation when the acts are the result of-- 7i7 a common or substantially overlapping originating cause2 or 7ii7 the same statement or publication4 7,d7 ,referral to ,secretary of the ,treasury ,if a ,federal payment stablecoin regulator has reason to believe that any person has knowingly and willfully violated subparagraph 7,a71 the ,federal payment stablecoin regulator may refer the matter to the ,secretary of the ,treasury4 7f7 ,officers or directors convicted of certain felonies 7#a7 ,in general ,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 7#b7 ,penalty 7,a7 ,in general ,whoever knowingly participates in a violation of paragraph 7#a7 shall be fined not more than #a1jjj1jjj for each such violation1 imprisoned for not more than #e years1 or both4 7,b7 ,referral to ,attorney ,general ,if a ,federal payment stablecoin regulator has reason to believe that any person has knowingly violated paragraph 7#a71 the ,federal payment stablecoin regulator shall refer the matter to the ,attorney ,general4 7g7 ,clarification relating to ,federal savings association reserves ,a ,federal savings association established under the ,home ,owners' ,loan ,act 7#ab ,u4,s4,c4 #adfa et seq47 that holds a reserve that satisfies the requirements of section #d7;a77#a7 shall not be required to satisfy the qualified thrift lender test under section #aj7m7 of the ,home ,owners' ,loan ,act 7#ab ,u4,s4,c4 #adfg;a7m77 with respect to such reserve assets4 7h7 ,rulemaking 7#a7 ,in general ,consistent with section #ac1 the primary ,federal payment stablecoin regulators shall1 and ,state payment stablecoin regulators may1 issue such regulations relating to permitted payment stablecoin issuers as may be necessary to establish a payment stablecoin regulatory framework necessary to administer and carry out the requirements of this section1 including to establish conditions1 and to prevent evasion thereof4 7#b7 ,coordinated issuance of regulations ,all regulations issued to carry out this section shall be issued in coordination by the primary ,federal payment stablecoin regulators1 if not issued by a ,state payment stablecoin regulator4 7i7 ,rules of construction ,nothing in this ,act shall be construed-- 7#a7 as expanding the authority of the ,board with respect to the services the ,board can make directly available to the public2 or 7#b7 to limit or prevent the continued application of applicable ethics statutes and regulations administered by the ,office of ,government ,ethics1 or the ethics rules of the ,house of ,representatives and the ,senate1 including section #bjh of title #ah1 ,united ,states ,code1 and sections #bfce4gjb and #bfce4hjb of title #e1 ,code of ,federal ,regulations4 ,for the avoidance of doubt1 existing ,office of ,government ,ethics laws and the ethics rules of the ,house of ,representatives and the ,senate prohibit any member of ,congress or senior executive branch official from issuing a payment stablecoin product during their time in public service4 #e4 ,approval of subsidiaries of insured depository institutions and ,federal qualified payment stablecoin issuers 7a7 ,application 7#a7 ,in general ,each primary ,federal payment stablecoin regulator shall-- 7,a7 receive1 review1 and consider for approval applications from any insured depository institution that seeks to issue payment stablecoins through a subsidiary and any nonbank entity1 ,federal branch1 or uninsured national bank that is chartered by the ,comptroller pursuant to title ,,lxii of the ,revised ,statutes1 and that seeks to issue payment stablecoins as a ,federal qualified payment stablecoin issuer2 and 7,b7 establish a process and framework for the licensing1 regulation1 examination1 and supervision of such entities that prioritizes the safety and soundness of such entities4 7#b7 ,authority to issue regulations and process applications ,the primary ,federal payment stablecoin regulators shall1 before the date described in section #ac-- 7,a7 issue regulations consistent with that section to carry out this section2 and 7,b7 pursuant to the regulations described in subparagraph 7,a71 accept and process applications described in paragraph 7#a74 7#c7 ,mandatory approval process ,a primary ,federal payment stablecoin regulator shall1 upon receipt of a substantially complete application received under paragraph 7#a71 evaluate and make a determination on each application based on the criteria established under this ,act4 7b7 ,evaluation of applications ,a substantially complete application received under subsection 7a7 shall be evaluated by the primary ,federal payment stablecoin regulator using the factors described in subsection 7c74 7c7 ,factors to be considered ,the factors described in this subsection are the following3 7#a7 ,the ability of the applicant 7or1 in the case of an applicant that is an insured depository institution1 the subsidiary of the applicant71 based on financial condition and resources1 to meet the requirements set forth under section #d4 7#b7 ,whether an individual who has been convicted of a felony offense involving insider trading1 embezzlement1 cybercrime1 money laundering1 financing of terrorism1 or financial fraud is serving as an officer or director of the applicant4 7#c7 ,the competence1 experience1 and integrity of the officers1 directors1 and principal shareholders of the applicant1 its subsidiaries1 and parent company1 including-- 7,a7 the record of those officers1 directors1 and principal shareholders of compliance with laws and regulations2 and 7,b7 the ability of those officers1 directors1 and principal shareholders to fulfill any commitments to1 and any conditions imposed by1 their primary ,federal payment stablecoin regulator in connection with the application at issue and any prior applications4 7#d7 ,whether the redemption policy of the applicant meets the standards under section #d7;a77#a77;,b74 7#e7 ,any other factors established by the primary ,federal payment stablecoin regulator that are necessary to ensure the safety and soundness of the permitted payment stablecoin issuer4 7d7 ,timing for decision2 grounds for denial 7#a7 ,timing for decisions on applications 7,a7 ,in general ,not later than #abj days after receiving a substantially complete application under subsection 7a71 a primary ,federal payment stablecoin regulator shall render a decision on the application4 7,b7 ,substantially complete 7i7 ,in general ,for purposes of subparagraph 7,a71 an application shall be considered substantially complete if the application contains sufficient information for the primary ,federal payment stablecoin regulator to render a decision on whether the applicant satisfies the factors described in subsection 7c74 7ii7 ,notification ,not later than #cj days after receiving an application under subsection 7a71 a primary ,federal payment stablecoin regulator shall notify the applicant as to whether the primary ,federal payment stablecoin regulator considers the application to be substantially complete and1 if the application is not substantially complete1 the additional information the applicant shall provide in order for the application to be considered substantially complete4 7iii7 ,material change in circumstances ,an application considered substantially complete under this subparagraph remains substantially complete unless there is a material change in circumstances that requires the primary ,federal payment stablecoin regulator to treat the application as a new application4 7#b7 ,denial of application 7,a7 ,grounds for denial 7i7 ,in general ,a primary ,federal payment stablecoin regulator shall only deny a substantially complete application received under subsection 7a7 if the regulator determines that the activities of the applicant would be unsafe or unsound based on the factors described in subsection 7c74 7ii7 ,issuance on open1 public1 or decentralized network not ground for denial ,the issuance of a payment stablecoin on an open1 public1 or decentralized network shall not be a valid ground for denial of an application received under subsection 7a74 7,b7 ,explanation required ,if a primary ,federal payment stablecoin regulator denies a complete application received under subsection 7a71 not later than #cj days after the date of such denial1 the regulator shall provide the applicant with written notice explaining the denial with specificity1 including all findings made by the regulator with respect to all identified material shortcomings in the application1 including actionable recommendations on how the applicant could address the identified material shortcomings4 7,c7 ,opportunity for hearing2 final determination 7i7 ,in general ,not later than #cj days after the date of receipt of any notice of the denial of an application under this section1 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 7ii7 ,timing ,upon receipt of a timely request under clause 7i71 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 submit written materials or provide oral testimony and oral argument4 7iii7 ,final determination ,not later than #fj days after the date of a hearing under this subparagraph1 the applicable primary ,federal payment stablecoin regulator shall notify the applicant of a final determination1 which shall contain a statement of the basis for that determination1 with specific findings4 7iv7 ,notice if no hearing ,if an applicant does not make a timely request for a hearing under this subparagraph1 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 subparagraph1 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 a primary ,federal payment stablecoin regulator fails to render a decision on a complete application within the time period specified in paragraph 7#a71 the application shall be deemed approved4 7#d7 ,right to reapply ,the denial of an application under this section shall not prohibit the applicant from filing a subsequent application4 7e7 ,reports on pending applications ,each primary ,federal payment stablecoin regulator shall-- 7#a7 notify ,congress upon beginning to process applications under this ,act2 and 7#b7 annually report to ,congress on the applications that have been pending for #ahj days or more since the date the initial application was filed and for which the applicant has been informed that the application remains incomplete1 including documentation on the status of such applications and why such applications have not yet been approved4 7f7 ,safe harbor for pending applications ,the primary ,federal payment stablecoin regulators may waive the application of the requirements of this ,act for a period not to exceed #ab months beginning on the effective date of this ,act1 with respect to-- 7#a7 a subsidiary of an insured depository institution1 if the insured depository institution has an application pending for the subsidiary to become a permitted payment stablecoin issuer on that effective date2 or 7#b7 a ,federal qualified payment stablecoin issuer with a pending application on that effective date4 7g7 ,rulemaking ,consistent with section #ac1 the primary ,federal payment stablecoin regulators shall issue rules necessary for the regulation of the issuance of payment stablecoins1 but may not impose requirements in addition to the requirements specified under section #d4 7h7 ,relation to other licensing requirements ,the provisions of this section supersede and preempt any ,state requirement for a charter1 license1 or other authorization to do business with respect to a ,federal qualified payment stablecoin issuer or subsidiary of an insured depository institution or credit union that is approved under this section to be a permitted payment stablecoin issuer4 7i7 ,certification required 7#a7 ,in general ,not later than #ahj days after the approval of an application1 and on an annual basis thereafter1 each permitted payment stablecoin issuer shall submit to its primary ,federal payment stablecoin regulator1 or in the case of a ,state qualified payment stablecoin issuer its ,state payment stablecoin regulator1 a certification that the issuer has implemented anti-money laundering and economic sanctions compliance programs that are reasonably designed to prevent the permitted payment stablecoin issuer from facilitating money laundering1 including1 in particular1 facilitating money laundering for cartels and organizations designated as foreign terrorist organizations under section #bai of the ,immigration and ,nationality ,act 7#h ,u4,s4,c4 #aahi7 and the financing of terrorist activities1 consistent with the requirements of this ,act4 7#b7 ,availability of certifications ,federal payment stablecoin regulators and ,state payment stablecoin regulators shall make certifications described in paragraph 7#a7 available to the ,secretary of ,treasury upon request4 7#c7 ,penalties 7,a7 ,approval revocation ,the primary ,federal payment stablecoin regulator or ,state payment stablecoin regulator of a permitted payment stablecoin issuer that does not submit a certification pursuant to paragraph 7#a7 may revoke the approval of the payment stablecoin issuer under this section4 7,b7 ,criminal penalty 7i7 ,in general ,any person that knowingly submits a certification pursuant to paragraph 7#a7 that is false shall be subject to the criminal penalties set forth under section #ajja of title #ah1 ,united ,states ,code4 7ii7 ,referral to attorney general ,if a ,federal payment stablecoin regulator or ,state payment stablecoin regulator has reason to believe that any person has knowingly violated paragraph 7#a71 the applicable regulator may refer the matter to the ,attorney ,general or to the attorney general of the payment stablecoin issuer's host ,state4 #f4 ,supervision and enforcement with respect to ,federal qualified payment stablecoin issuers and subsidiaries of insured depository institutions 7a7 ,supervision 7#a7 ,in general ,each permitted payment stablecoin issuer that is not a ,state qualified payment stablecoin issuer with a payment stablecoin with a consolidated total outstanding issuance of less than #aj1jjj1jjj1jjj shall be subject to supervision by the appropriate primary ,federal payment stablecoin regulator4 7#b7 ,submission of reports ,each permitted payment stablecoin issuer described in paragraph 7#a7 shall1 upon request1 submit to the appropriate primary ,federal payment stablecoin regulator a report on-- 7,a7 the financial condition of the permitted payment stablecoin issuer2 7,b7 the systems of the permitted payment stablecoin issuer for monitoring and controlling financial and operating risks2 7,c7 compliance by the permitted payment stablecoin issuer 7and any subsidiary thereof7 with this ,act2 and 7,d7 the compliance of the ,federal qualified nonbank payment stablecoin issuer with the requirements of the ,bank ,secrecy ,act and with laws authorizing the imposition of sanctions to be implemented by the ,secretary of the ,treasury4 7#c7 ,examinations ,the appropriate primary ,federal payment stablecoin regulator shall examine a permitted payment stablecoin issuer described in paragraph 7#a7 in order to assess-- 7,a7 the nature of the operations and financial condition of the permitted payment stablecoin issuer2 7,b7 the financial1 operational1 technological1 and other risks associated with the permitted payment stablecoin issuer that may pose a threat to-- 7i7 the safety and soundness of the permitted payment stablecoin issuer2 or 7ii7 the stability of the financial system of the ,united ,states2 and 7,c7 the systems of the permitted payment stablecoin issuer for monitoring and controlling the risks described in subparagraph 7,b74 7#d7 ,requirements for efficiency 7,a7 ,use of existing reports ,in supervising and examining a permitted payment stablecoin issuer under this subsection1 a primary ,federal payment stablecoin regulator shall1 to the fullest extent possible1 use existing reports and other supervisory information4 7,b7 ,avoidance of duplication ,a primary ,federal payment stablecoin regulator shall1 to the fullest extent possible1 avoid duplication of examination activities1 reporting requirements1 and requests for information in carrying out this subsection with respect to a permitted payment stablecoin issuer4 7,c7 ,consideration of burden ,a primary ,federal payment stablecoin regulator shall1 with respect to any examination or request for the submission of a report under this subsection1 only request examinations and reports at a cadence and in a format that is similar to that required for similarly situated entities regulated by the primary ,federal payment stablecoin regulator4 7b7 ,enforcement 7#a7 ,suspension or revocation of registration ,the primary ,federal payment stablecoin regulator of a permitted payment stablecoin issuer that is not a ,state qualified payment stablecoin issuer with a payment stablecoin with a consolidated total outstanding issuance of less than #aj1jjj1jjj1jjj may prohibit the 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 issuer is willfully violating or has willfully violated-- 7,a7 this ,act or any regulation or order issued under this ,act2 or 7,b7 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 of a permitted payment stablecoin issuer that is not a ,state qualified payment stablecoin issuer with a payment stablecoin with a consolidated total outstanding issuance of less than #aj1jjj1jjj1jjj has reasonable cause to believe that the permitted payment stablecoin issuer or any institution-affiliated party of the 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 may1 by provisions that are mandatory or otherwise1 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 of a permitted payment stablecoin issuer that is not a ,state qualified payment stablecoin issuer may remove an institution-affiliated party of the permitted payment stablecoin issuer from the position or office of that institution-affiliated party or prohibit further participation in the affairs of the permitted payment stablecoin issuer or of all such permitted payment stablecoin issuers by that institution-affiliated party1 if the primary ,federal payment stablecoin regulator determines that-- 7,a7 the institution-affiliated party has knowingly 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 knowingly 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 a 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 forth in subsections 7b7 and 7e7 of section #h of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah7 or subsections 7e7 and 7g7 of section #bjf the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghf7;e7 and 7g771 as applicable4 7,b7 ,judicial review ,a person aggrieved by a final action under this subsection may obtain judicial review of such action exclusively as provided in section #h7;h7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah7;h77 or section #bjf7;j7 of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghf7;j771 as applicable4 7,c7 ,injunction ,a primary ,federal payment stablecoin regulator may1 at the discretion of the regulator1 follow the procedures provided in section #h7;i77#a7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah7;i77#a77 or section #bjf7k77#a7 of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghf7k77#a771 as applicable1 for judicial enforcement of any effective and outstanding notice or order issued under this subsection4 7,d7 ,temporary cease-and-desist proceedings ,if a 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 provided in section #h7;c7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah7;c77 or section #bjf7;f7 of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghf7;f771 as applicable1 to issue a temporary cease and desist order4 7#e7 ,civil money penalties ,unless otherwise specified in this ,act1 the civil money penalties for violations of this ,act consist of the following3 7,a7 ,failure to be approved ,any person that issues a ,united ,states dollar-denominated payment stablecoin in violation of section #c1 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 issued4 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 appropriate primary ,federal payment stablecoin regulator in connection with a written agreement entered into between the permitted payment stablecoin issuer and that primary ,federal payment stablecoin regulator1 shall be liable for a civil penalty of not more than #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 in 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 under this ,act1 shall be liable for a civil penalty of not more than 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 appropriate primary ,federal payment stablecoin regulator pursuant to the procedures set forth in section #h7;i77#b7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah7;i77#b77 or section #bjf7k77#b7 of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghf7k77#b771 as applicable4 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 a 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 on which 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 ,notwithstanding anything in this subsection to the contrary1 this subsection shall not apply to a ,state qualified payment stablecoin issuer4 7c7 ,federal ,trade ,commission ,jurisdiction ,nothing in this ,act shall be construed to limit1 impair1 or otherwise affect the authority or jurisdiction of the ,federal ,trade ,commission under the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #da et seq47 or any other applicable ,federal law4 #g4 ,state qualified payment stablecoin issuers 7a7 ,in general ,a ,state payment stablecoin regulator shall have supervisory1 examination1 and enforcement authority over all ,state qualified payment stablecoin issuers of such ,state4 7b7 ,authority ,to enter into agreements with the ,board ,a ,state payment stablecoin regulator may enter into a memorandum of understanding with the ,board1 by mutual agreement1 under which the ,board may participate in the supervision1 examination1 and enforcement of this ,act with respect to the ,state qualified payment stablecoin issuers of such ,state4 7c7 ,sharing of information ,a ,state payment stablecoin regulator and the ,board shall share information on an ongoing basis with respect to a ,state qualified payment stablecoin issuer of such ,state1 including a copy of the initial application and any accompanying documents4 7d7 ,rulemaking ,a ,state payment stablecoin regulator may issue orders and rules under section #d applicable to ,state qualified payment stablecoin issuers to the same extent as the primary ,federal payment stablecoin regulators issue orders and rules under section #d applicable to permitted payment stablecoin issuers that are not ,state qualified payment stablecoin issuers4 7e7 ,enforcement authority in unusual and exigent circumstances 7#a7 ,board 7,a7 ,in general ,subject to subparagraph 7,c71 under unusual and exigent circumstances that the ,board determines to exist1 the ,board may1 after not less than #dh hours' prior written notice to the applicable ,state payment stablecoin regulator1 take an enforcement action against a ,state qualified payment stablecoin issuer or an institution-affiliated party of such issuer for violations of this ,act during such unusual and exigent circumstances4 7,b7 ,rulemaking ,consistent with section #ac1 the ,board shall issue rules to set forth the unusual and exigent circumstances in which the ,board may act under this paragraph4 7,c7 ,limitations ,if1 after unusual and exigent circumstances are determined to exist pursuant to subparagraph 7,a71 the ,board determines that there is reasonable cause to believe that the continuation by a ,state qualified payment stablecoin issuer of any activity constitutes a serious risk to the financial safety1 soundness1 or stability of the ,state qualified payment stablecoin issuer1 the ,board may impose such restrictions as the ,board determines to be necessary to address such risk during such unusual and exigent circumstances1 which may include limitations on redemptions of payment stablecoins1 and which shall be issued in the form of a directive1 with the effect of a cease and desist order that has become final1 to the ,state qualified payment stablecoin issuer and any of its affiliates1 limiting-- 7i7 transactions between the ,state qualified payment stablecoin issuer1 a holding company1 and the subsidiaries or affiliates of either the ,state qualified payment stablecoin issuer or the holding company2 and 7ii7 any activities of the ,state qualified payment stablecoin issuer that might create a serious risk that the liabilities of a holding company and the affiliates of the holding company may be imposed on the ,state qualified payment stablecoin issuer4 7,d7 ,review of directive 7i7 ,administrative review 7,i7 ,in general ,after a directive described in subparagraph 7,c7 is issued1 the applicable ,state qualified payment stablecoin issuer1 or any institution-affiliated party of the ,state qualified payment stablecoin issuer subject to the directive1 may object and present to the ,board1 in writing1 the reasons why the directive should be modified or rescinded4 7,,ii7 ,automatic lapse of directive ,if1 after #aj days after the receipt of a response described in subclause 7,i71 the ,board does not affirm1 modify1 or rescind the directive1 the directive shall automatically lapse4 7ii7 ,judicial review 7,i7 ,in general ,if the ,board affirms or modifies a directive pursuant to clause 7i71 any affected party may immediately thereafter petition the ,united ,states district court for the district in which the main office of the affected party is located1 or in the ,united ,states ,district ,court for the ,district of ,columbia1 to stay1 modify1 terminate1 or set aside the directive4 7,,ii7 ,relief for extraordinary cause ,upon a showing of extraordinary cause1 an affected party may petition for relief under subclause 7,i7 without first pursuing or exhausting the administrative remedies under clause 7i74 7#b7 ,comptroller 7,a7 ,in general ,subject to subparagraph 7,c71 under unusual and exigent circumstances determined to exist by the ,comptroller1 the ,comptroller shall1 after not less than #dh hours' prior written notice to the applicable ,state payment stablecoin regulator1 take an enforcement action against a ,state qualified payment stablecoin issuer that is a nonbank entity for violations of this ,act4 7,b7 ,rulemaking ,consistent with section #ac1 the ,comptroller shall issue rules to set forth the unusual and exigent circumstances in which the ,comptroller may act under this paragraph4 7,c7 ,limitations ,if1 after unusual and exigent circumstances are determined to exist under subparagraph 7,a71 the ,comptroller determines that there is reasonable cause to believe that the continuation of any activity by a ,state qualified payment stablecoin issuer that is a nonbank entity constitutes a serious risk to the financial safety1 soundness1 or stability of the ,state qualified payment stablecoin issuer that is a nonbank entity1 the ,comptroller shall impose such restrictions as the ,comptroller determines to be necessary to address such risk during such unusual and exigent circumstances1 which may include limitations on redemption of payment stablecoins1 and which shall be issued in the form of a directive1 with the effect of a cease and desist order that has become final1 to the ,state qualified payment stablecoin issuer that is a nonbank entity and any of its affiliates1 limiting-- 7i7 transactions between the ,state qualified payment stablecoin issuer1 a holding company1 and the subsidiaries or affiliates of either the ,state qualified payment stablecoin issuer or the holding company2 and 7ii7 any activities of the ,state qualified payment stablecoin issuer that might create a serious risk that the liabilities of a holding company and the affiliates of the holding company may be imposed on the ,state qualified payment stablecoin issuer4 7,d7 ,review of directive 7i7 ,administrative review 7,i7 ,in general ,after a directive described in subparagraph 7,c7 is issued1 the applicable ,federal qualified payment stablecoin issuer1 or any institution-affiliated party of the ,federal qualified payment stablecoin issuer subject to the directive1 may object and present to the ,comptroller1 in writing1 the reasons that the directive should be modified or rescinded4 7,,ii7 ,automatic lapse of directive ,if1 after #aj days after the receipt of a response described in subclause 7,i71 the ,comptroller does not affirm1 modify1 or rescind the directive1 the directive shall automatically lapse4 7ii7 ,judicial review 7,i7 ,in general ,if the ,comptroller affirms or modifies a directive pursuant to clause 7i71 any affected party may immediately thereafter petition the ,united ,states district court for the district in which the main office of the affected party is located1 or in the ,united ,states ,district ,court for the ,district of ,columbia1 to stay1 modify1 terminate1 or set aside the directive4 7,,ii7 ,relief for extraordinary cause ,upon a showing of extraordinary cause1 an affected party may petition for relief under subclause 7,i7 without first pursuing or exhausting the administrative remedies under clause 7i74 7f7 ,effect on ,state law 7#a7 ,host ,state law ,unless otherwise provided in this ,act1 the laws of a host ,state1 including laws relating to consumer protection1 shall only apply to the activities conducted in the host ,state by an out-of-,state ,state qualified payment stablecoin issuer to the same extent as such laws apply to the activities conducted in the host ,state by an out-of-,state ,federal qualified payment stablecoin issuer4 7#b7 ,home ,state ,law ,if any host ,state law is determined not to apply under paragraph 7#a71 the laws of the home ,state of the ,state qualified payment stablecoin issuer shall govern the activities of the permitted payment stablecoin issuer conducted in the host ,state4 7#c7 ,applicability 7,a7 ,in general ,this subsection shall only apply to an out-of-,state ,state qualified payment stablecoin issuer chartered1 licensed1 or otherwise authorized to do business by a ,state that has a certification in place pursuant to section #d7;c7 of this ,act4 7,b7 ,exclusion ,the laws applicable to an out-of-,state qualified payment stablecoin issuer under paragraph 7#a7 exclude host ,state laws governing the chartering1 licensure1 or other authorization to do business in the host ,state as a permitted payment stablecoin issuer pursuant to this ,act4 7#d7 ,rule of construction ,except as specified in this subsection1 nothing in this ,act shall preempt ,state consumer protection laws1 including common law1 and the remedies available thereunder4 #h4 ,anti-money laundering protections 7a7 ,payment stablecoin issued by a foreign payment stablecoin issuer 7#a7 ,in general ,payment stablecoin that is issued by a foreign payment stablecoin issuer may not be publicly offered1 sold1 or otherwise made available for trading in the ,united ,states unless the foreign payment stablecoin issuer has the technological capability to comply and complies with the terms of any lawful order4 7#b7 ,enforcement 7,a7 ,authority ,the ,secretary of the ,treasury shall have the authority to designate any foreign issuer that publicly offers1 sells1 or otherwise makes available a payment stablecoin in violation of paragraph 7#a7 as noncompliant4 7,b7 ,designation as noncompliant ,not later than #cj days after the ,department of the ,treasury has identified a foreign payment stablecoin issuer of any payment stablecoin that is trading in the ,united ,states that is in violation of paragraph 7#a71 the ,secretary of the ,treasury1 in coordination with relevant ,federal agencies1 may1 pursuant to the authority under subparagraph 7,a71 designate the foreign payment stablecoin issuer as noncompliant and notify the foreign payment stablecoin issuer in writing of the designation4 7#c7 ,appeal ,a determination of noncompliance under this subsection is subject to judicial review in the ,united ,states ,court of ,appeals for the ,district of ,columbia ,circuit4 7b7 ,publication of designation2 prohibition on secondary trading 7#a7 ,in general ,if a foreign payment stablecoin issuer does not come into compliance with the lawful order within #cj days from the date of issuance of the written notice described in subsection 7a71 the ,secretary of the ,treasury may-- 7,a7 publish the determination of noncompliance in the ,federal ,register1 including a statement on the failure of the foreign payment stablecoin issuer to comply with the lawful order after the written notice2 and 7,b7 issue a notification in the ,federal ,register prohibiting digital asset service providers from facilitating secondary trading of payment stablecoins issued by the foreign payment stablecoin issuer in the ,united ,states4 7#b7 ,effective date of prohibition ,the prohibition on facilitation of secondary trading described in paragraph 7#a7 shall become effective on the date that is #cj days after the date of issue of notification of the prohibition in the ,federal ,register4 7#c7 ,expiration of prohibition 7,a7 ,in general ,the prohibition on facilitation of secondary trading described in paragraph 7#a77;,b7 shall expire upon the ,secretary of the ,treasury's determination that the foreign payment stablecoin issuer is no longer noncompliant4 7,b7 ,rulemaking ,consistent with section #ac1 the ,secretary of the ,treasury shall specify the criteria that a noncompliant foreign issuer must meet for the ,secretary of the ,treasury to determine that the foreign payment stablecoin issuer is no longer noncompliant4 7#d7 ,civil monetary penalties ,the ,secretary of the ,treasury may impose a civil monetary penalty as follows3 7,a7 ,digital asset service providers ,any digital asset service provider that knowingly violates a prohibition under paragraph 7#a77;,b7 shall be subject to a civil monetary penalty of not more than #ajj1jjj per violation per day4 7,b7 ,foreign payment stablecoin issuers ,any foreign payment stablecoin issuer that knowingly continues to publicly offer a payment stablecoin in the ,united ,states after publication of the determination of noncompliance under paragraph 7#a77;,a7 shall be subject to a civil monetary penalty of not more than #a1jjj1jjj per violation per day1 and the ,secretary of the ,treasury may seek an injunction in a district court of the ,united ,states to bar the foreign payment stablecoin issuer from engaging in financial transactions in the ,united ,states or with ,united ,states persons4 7,c7 ,determination of the number of violations ,for purposes of determining the number of violations for which to impose a penalty under subparagraph 7,a7 or 7,b71 separate acts of noncompliance are a single violation when the acts are the result of a common or substantially overlapping originating cause4 7,d7 ,commencement of civil actions ,the ,secretary of the ,treasury may commence a civil action against a foreign payment stablecoin issuer in a district court of the ,united ,states to-- 7i7 recover a civil monetary penalty assessed under subparagraph 7,a7 or 7,b72 7ii7 seek an injunction to bar the foreign payment stablecoin issuer from engaging in financial transactions in the ,united ,states or with ,united ,states persons2 or 7iii7 seek an injunction to stop a digital asset service provider from offering on the platform of the digital asset service provider payment stablecoins issued by the foreign payment stablecoin issuer4 7c7 ,waiver and licensing authority exemptions 7#a7 ,in general ,the ,secretary of the ,treasury may offer a waiver1 general license1 or specific license to any ,united ,states person engaging in secondary trading described in subsection 7b77#a77;,b7 on a case-by-case basis if the ,secretary determines that-- 7,a7 prohibiting secondary trading would adversely affect the financial system of the ,united ,states2 or 7,b7 the foreign payment stablecoin issuer is taking tangible steps to remedy the failure to comply with the lawful order that resulted in the noncompliance determination under subsection 7a74 7#b7 ,national security waiver ,the ,secretary of the ,treasury1 in consultation with the ,director of ,national ,intelligence and the ,secretary of ,state1 may waive the application of the secondary trading restrictions under subsection 7b77#a77;,b7 if the ,secretary of the ,treasury determines that the waiver is in the national security interest of the ,united ,states4 7#c7 ,waiver for intelligence and law enforcement activities ,the head of a department or agency may waive the application of this section with respect to-- 7,a7 activities subject to the reporting requirements under title ,v of the ,national ,security ,act of #aidg 7#ej ,u4,s4,c4 #cjia et seq471 or any authorized intelligence activities of the ,united ,states2 or 7,b7 activities necessary to carry out or assist law enforcement activity of the ,united ,states4 7#d7 ,report required ,not later than #g days after issuing a waiver or a license under paragraph 7#a71 the ,secretary of the ,treasury shall submit a report to the chairs and ranking members of the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives1 including the text of the waiver or license1 as well as the facts and circumstances justifying the waiver determination1 and provide a briefing on the report4 #i4 ,anti-money laundering innovation 7a7 ,public comment ,beginning on the date that is #cj days after the date of enactment of this ,act1 and for a period of #fj days thereafter1 the ,secretary of the ,treasury shall seek public comment to identify innovative or novel methods1 techniques1 or strategies that regulated financial institutions use1 or have the potential to use1 to detect illicit activity1 such as money laundering1 involving digital assets1 including comments with respect to-- 7#a7 application program interfaces2 7#b7 artificial intelligence2 7#c7 digital identify verification2 and 7#d7 use of blockchain technology and monitoring4 7b7 ,treasury research 7#a7 ,in general ,upon completion of the public comment period described in subsection 7a71 the ,secretary of the ,treasury shall conduct research on the innovative or novel methods1 techniques1 or strategies that regulated financial institutions use1 or have the potential to use1 to detect illicit activity1 such as money laundering1 involving digital assets that were identified in such public comment period4 7#b7 ,research factors ,with respect to each innovative or novel method1 technique1 or strategy described in paragraph 7#a71 the ,financial ,crimes ,enforcement ,network shall evaluate and consider the following factors against existing methods1 techniques1 or strategies3 7,a7 ,improvements in the ability of financial institutions to detect illicit activity involving digital assets4 7,b7 ,costs to regulated financial institutions4 7,c7 ,the amount and sensitivity of information that is collected or reviewed4 7,d7 ,privacy risks associated with the information that is collected or reviewed4 7,e7 ,operational challenges and efficiency considerations4 7,f7 ,cybersecurity risks4 7,g7 ,effectiveness of methods1 techniques1 or strategies at mitigating illicit finance4 7c7 ,treasury risk assessment ,as part of the national strategy for combating terrorist and other illicit financing required under sections #bfa and #bfb of the ,countering ,america's ,adversaries ,through ,sanctions ,act 7,public ,law #aae-dd2 #aca ,stat4 #icd71 the ,secretary of the ,treasury shall consider-- 7#a7 the source of illicit activity1 such as money laundering and sanctions evasion involving digital assets2 7#b7 the effectiveness of and gaps in existing methods1 techniques1 and strategies used by regulated financial institutions in detecting illicit activity1 such as money laundering1 involving digital assets2 7#c7 the impact of existing regulatory frameworks on the use and development of innovative methods1 techniques1 or strategies by regulated financial institutions2 and 7#d7 any foreign jurisdictions that pose a high risk of facilitating illicit activity through the use of digital assets to obtain fiat currency4 7d7 ,fin,c,e,n guidance or rulemaking ,not later than #b years after the date of enactment of this ,act1 the ,financial ,crimes ,enforcement ,network shall issue public guidance or notice and comment rulemaking1 based on the results of the research and risk assessments required under this section1 relating to the following3 7#a7 ,the implementation of innovative or novel methods1 techniques1 or strategies by regulated financial institutions to detect illicit activity involving digital assets4 7#b7 ,best practices for payment stablecoin issuers to identify and report illicit activity involving the payment stablecoin of a permitted payment stablecoin issuer1 including1 fraud1 cybercrime1 money laundering1 financing of terrorism1 sanctions evasion1 and insider trading4 7#c7 ,best practices for payment stablecoin issuers' systems and practices to monitor transactions on blockchains1 digital asset mixing services1 tumblers1 or other similar services that mix payment stablecoins in such a way as to make such transaction or the identity of the transaction parties less identifiable4 7e7 ,recommendations and report to congress ,not later than #b years after the date of enactment of this ,act1 and annually thereafter for a period of #d years1 the ,secretary of the ,treasury shall submit to the chairs and ranking members of the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives a report1 and provide a briefing of such report1 on-- 7#a7 legislative and regulatory proposals to allow regulated financial institutions to develop and implement novel and innovative methods1 techniques1 or strategies to detect illicit activity1 such as money laundering and sanctions evasion1 involving digital assets2 7#b7 the results of the research and risk assessments conducted pursuant to this section2 and 7#c7 efforts to support the ability of financial institutions to implement novel and innovative methods1 techniques1 or strategies to detect illicit activity1 such as money laundering and sanctions evasion1 involving digital assets4 7f7 ,rule of construction ,nothing in this section shall be construed to limit the existing authority of the ,secretary of the ,treasury or the primary ,federal payment stablecoin regulators to1 prior to the submission of a report required under this section1 use existing exemptive authorities1 the no-action letter process1 or rulemaking authorities in a manner that encourages regulated financial institutions to adopt novel or innovative methods1 techniques1 or strategies to detect illicit activity1 such as money laundering1 involving digital assets4 #aj4 ,custody of payment stablecoin reserve and collateral 7a7 ,in general ,a person may only engage in the business of providing custodial or safekeeping services for the payment stablecoin reserve1 the payment stablecoins used as collateral1 or the private keys used to issue permitted payment stablecoins 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 under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac71 or a ,state credit union supervisor1 as defined under 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 requirements under subsection 7b71 unless such person holds such property in accordance with similar requirements as required by a primary ,federal payment stablecoin regulator1 the ,securities and ,exchange ,commission1 or the ,commodity ,futures ,trading ,commission4 7b7 ,customer property requirement ,a person described in subsection 7a7 shall-- 7#a7 with respect to payment stablecoin reserves received from a permitted payment stablecoin issuer for deposit in a reserve account1 treat and deal with such payment stablecoin reserves as belonging to the holders of the permitted payment stablecoins issued by such issuer and not as the property of such person or of such permitted payment stablecoin issuer2 and 7#b7 with respect to other property described in subsection 7a7-- 7,a7 treat and deal with the payment stablecoins1 private keys1 cash1 and other property of a person for whom or on whose behalf the person described in that subsection receives1 acquires1 or holds payment stablecoins1 private keys1 cash1 and other property 7hereinafter referred to in this section 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 stablecoin reserves1 payment stablecoins1 cash1 and other property of a permitted payment stablecoin issuer or customer shall be separately accounted for by a person described in subsection 7a7 and shall be segregated from and not be commingled with the funds of the person4 7#b7 ,exceptions ,notwithstanding paragraph 7#a7 or subsection 7b7-- 7,a7 the payment stablecoin reserves1 payment stablecoins1 cash1 and other property of a permitted payment stablecoin issuer or customer may1 for convenience1 be commingled and deposited in an omnibus account holding the payment stablecoin reserves1 payment stablecoins1 cash1 and other property of more than #a permitted payment stablecoin issuer or customer at a ,state chartered depository institution1 an insured depository institution1 national bank1 or trust company1 and any payment stablecoin reserves in the form of cash held in the form of a deposit liability at a depository institution shall not be subject to any requirement relating to the separation of such cash from the property of the applicable depository institution2 7,b7 such share of the payment stablecoin reserves1 payment stablecoins1 cash1 and other property of the permitted payment stablecoin issuer or 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 a primary ,federal payment stablecoin regulator may prescribe by rule1 regulation1 or order1 any payment stablecoin reserves1 payment stablecoins1 cash1 and other property described in this subsection may be commingled and deposited in permitted payment stablecoin issuer or customer accounts with payment stablecoin reserves1 payment stablecoins1 cash1 and other property received by the person and required by the primary ,federal payment stablecoin regulator to be separately accounted for1 treated as1 and dealt with as belonging to such permitted payment stablecoin issuers or customers2 or 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 7#c7 ,customer priority ,with or without the segregation required under paragraph 7#a71 the claims of a customer with respect to the property described in that paragraph shall have priority over the claims of any person other than a customer against a person described in subparagraph 7a7 unless the customer expressly consents to such other priority of claim4 7d7 ,regulatory information ,a person described under subsection 7a7 shall submit to the applicable primary ,federal payment stablecoin regulator information concerning the person's business operations and processes to protect customer assets1 in such form and manner as the primary regulator 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 #aa4 ,treatment of payment stablecoin issuers in insolvency proceedings 7a7 ,in general ,in any insolvency proceeding of a permitted payment stablecoin issuer under ,federal or ,state law1 including any proceeding under title #aa1 ,united ,states ,code1 and any insolvency proceeding administered by a ,state payment stablecoin regulator with respect to a permitted payment stablecoin issuer1 the claim of a person holding payment stablecoins issued by the permitted payment stablecoin issuer shall have priority over the claims of the permitted payment stablecoin issuer and any other creditor of the permitted payment stablecoin issuer1 with respect to required payment stablecoin reserves1 subject to section #ejg7;e7 of title #aa1 ,united ,states ,code1 as added by subsection 7d74 7b7 ,definitions ,section #aja of title #aa1 ,united ,states ,code1 is amended by adding after paragraph 7#dj;,b7 the following3 7#dj;,c7 ,the terms payment stablecoin and permitted payment stablecoin issuer have the meanings given those terms in section #b of the ,,genius ,act4 4 7c7 ,automatic stay ,section #cfb of title #aa1 ,united ,states ,code1 is amended-- 7#a7 in subsection 7a7-- 7,a7 in paragraph 7#g71 by striking and2 7,b7 in paragraph 7#h71 by striking the period and inserting 2 and2 and 7,c7 by adding at the end the following3 7#i7 the redemption of payment stablecoins issued by the permitted payment stablecoin issuer1 from payment stablecoin reserves required to be maintained under section #d of the ,,genius ,act4 2 and 7#b7 in subsection 7d7-- 7,a7 in paragraph 7#c77;,b77ii71 by striking or at the end2 7,b7 in paragraph 7#d77;,b71 by striking the period at the end and inserting 2 or2 and 7,c7 by inserting after paragraph 7#d7 the following3 7#e7 with respect to the redemption of payment stablecoins held by a person1 if the court finds1 subject to the motion and attestation of the permitted payment stablecoin issuer on the petition date1 there are payment stablecoin reserves available for distribution on a ratable basis to similarly situated payment stablecoin holders1 provided that the court shall use best efforts to enter a final order to begin distributions under this paragraph not later than #ad days after the date of the required hearing4 4 7d7 ,priority in bankruptcy proceedings ,section #ejg of title #aa1 ,united ,states ,code1 is amended-- 7#a7 in subsection 7a71 in the matter preceding paragraph 7#a71 by striking ,the following and inserting ,subject to subsection 7e71 the following2 and 7#b7 by adding at the end the following3 7e7 ,notwithstanding subsection 7a71 if a payment stablecoin holder is not able to redeem all outstanding payment stablecoin claims from required payment stablecoin reserves maintained by the permitted payment stablecoin issuer1 any remaining claim of a person holding a payment stablecoin issued by the permitted payment stablecoin issuer shall have first priority over any other claim1 including over any expenses and claims that have priority under that subsection1 to the extent compliance with section #d of the ,,genius ,act would have required additional reserves to be maintained by the permitted payment stablecoin issuer for payment stablecoin holders4 4 7e7 ,payment stablecoin reserves ,section #eda7;b7 of title #aa1 ,united ,states ,code1 is amended-- 7#a7 in paragraph 7#i71 in the matter following subparagraph 7,b71 by striking or at the end2 7#b7 in paragraph 7#aj77;,c71 by striking the period and inserting 2 or2 and 7#c7 by inserting after paragraph 7#aj7 the following3 7#aa7 required payment stablecoin reserves under section #d of the ,,genius ,act4 4 7f7 ,intervention ,section #aaji of title #aa1 ,united ,states ,code1 is amended by adding at the end the following3 7c7 ,the ,comptroller of the ,currency or ,state payment stablecoin regulator 7as defined in section #b of the ,,genius ,act7 shall raise1 and shall appear and be heard on1 any issue1 including the protection of customers1 in a case under this chapter in which the debtor is a permitted payment stablecoin issuer4 4 7g7 ,application of existing insolvency law ,in accordance with otherwise applicable law1 an insolvency proceeding with respect to a permitted payment stablecoin issuer shall occur as follows3 7#a7 ,a depository institution 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac77 shall be resolved by the ,federal ,deposit ,insurance ,corporation1 ,national ,credit ,union ,administration1 or ,state payment stablecoin regulator1 as applicable4 7#b7 ,a subsidiary of a depository institution 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac77 or a nonbank entity may be considered a debtor under title #aa1 ,united ,states ,code4 #ab4 ,interoperability standards ,the primary ,federal payment stablecoin regulators1 in consultation with the ,national ,institute of ,standards and ,technology1 other relevant standard-setting organizations1 and ,state bank and credit union regulators1 shall assess and1 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 permitted payment stablecoin issuers to promote compatibility and interoperability with-- 7#a7 other permitted payment stablecoin issuers2 and 7#b7 the broader digital finance ecosystem1 including accepted communications protocols and blockchains1 permissioned or public4 #ac4 ,rulemaking 7a7 ,in general ,not later than #a year after the date of enactment of this ,act1 each primary ,federal payment stablecoin regulator1 the ,secretary of the ,treasury1 and each ,state payment stablecoin regulator shall promulgate regulations to carry out this ,act through appropriate notice and comment rulemaking4 7b7 ,coordination ,federal payment stablecoin regulators1 the ,secretary of the ,treasury1 and ,state payment stablecoin regulators should coordinate1 as appropriate1 on the issuance of any regulations to implement this ,act4 7c7 ,report required ,not later than #ahj days after the effective date of this ,act1 each ,federal banking agency shall submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives a report that confirms and describes the regulations promulgated to carry out this ,act4 #ad4 ,study on non-payment stablecoins 7a7 ,study by ,treasury 7#a7 ,study ,the ,secretary of the ,treasury1 in consultation with the ,board1 the ,comptroller1 the ,corporation1 the ,securities and ,exchange ,commission1 and the ,commodity ,futures ,trading ,commission shall carry out a study of non-payment stablecoins1 including endogenously collateralized payment stablecoins4 7#b7 ,report ,not later than #cfe days after the date of the enactment of this ,act1 the ,secretary of the ,treasury shall provide to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives a report that contains all findings made in carrying out the study under paragraph 7#a71 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 the nature of reserve compositions2 7,e7 types of algorithms being employed2 7,f7 governance structure1 including aspects of decentralization2 7,g7 the nature of public promotion and advertising2 and 7,h7 the clarity and availability of consumer notices disclosures4 7#c7 ,classified annex ,a report under this section may include a classified annex1 if applicable4 7b7 ,endogenously collateralized payment stablecoin defined ,in this section1 the term endogenously collateralized payment stablecoin means any digital asset-- 7#a7 the originator of which 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 #ae4 ,reports 7a7 ,annual reporting requirement ,beginning on the date that is #a year after the date of enactment of this ,act1 and annually thereafter1 the primary ,federal payment stablecoin regulators shall submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate1 the ,committee on ,financial ,services of the ,house of ,representatives1 and the ,director of the ,office of ,financial ,research a report1 which may include a classified annex1 if applicable1 on the status of the payment stablecoin industry1 including-- 7#a7 a summary of trends in payment stablecoin activities2 7#b7 a summary of the number of applications for approval as a permitted payment stablecoin issuer under section #e1 including aggregate approvals and rejections of applications2 and 7#c7 a description of the potential financial stability risks posed to the safety and soundness of the broader financial system by payment stablecoin activities4 7b7 ,,fsoc report ,the ,financial ,stability ,oversight ,council shall incorporate the findings in the report under subsection 7a7 into the annual report of the ,council required under section #aab7;a77#b77,n7 of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecbb7;a77#b77,n774 #af4 ,authority of banking institutions 7a7 ,rule of construction ,nothing in this ,act may be construed to limit the authority of a depository institution1 ,federal credit union1 ,state credit union1 national bank1 or trust company to engage in activities permissible pursuant to applicable ,state and ,federal law1 including-- 7#a7 accepting or receiving deposits or shares 7in the case of a credit union71 and issuing digital assets that represent those deposits or shares2 7#b7 utilizing a distributed ledger for the books and records of the entity and to effect intrabank transfers2 and 7#c7 providing custodial services for payment stablecoins1 private keys of payment stablecoins1 or reserves backing payment stablecoins4 7b7 ,regulatory review ,entities regulated by the primary ,federal payment stablecoin regulators are authorized to engage in the payment stablecoin activities and investments contemplated by this ,act1 including acting as a principal or agent with respect to any payment stablecoin and payment of fees to facilitate customer transactions4 ,the primary ,federal payment stablecoin regulators shall review all existing guidance and regulations1 and if necessary1 amend or promulgate new regulations and guidance1 to clarify that regulated entities are authorized to engage in such activities and investments4 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-- 7#a7 to include digital 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 activities2 or 7#b7 to hold in custody or safekeeping regulatory capital against digital assets and reserves backing such assets described in section #d7;a77#a77;,a71 except as necessary to mitigate against operational risks inherent in 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 supervisor2 or 7,d7 a ,state credit union supervisor4 7d7 ,state-chartered depository institutions ,a ,state-chartered depository institution chartered under the banking laws of a ,state shall not be required to obtain a charter1 license1 or other authorization to do business from a ,state to engage in the business of money transmission1 the issuance of payment instruments or stored value1 custodial services1 or any similar or related activity1 if such ,state-chartered depository institution is-- 7#a7 subject to prudential regulation and supervision by the chartering ,state in a manner that is substantially similar to the prudential regulation and supervision applicable to insured depository institutions chartered by such ,state2 and 7#b7 required by the laws of the chartering ,state to maintain reserves for any outstanding deposit liabilities in an amount equal to or greater than such liabilities and to hold such reserves in a manner that is at least as protective of customers as is required under section #h4 7e7 ,definitions ,in this section3 7#a7 ,depository institution2 ,state bank supervisor ,the terms depository institution and ,state bank supervisor have the meanings given those terms under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7#b7 ,federal credit union2 ,state credit union ,the terms ,federal credit union and ,state credit union have the meanings given those terms in section #aja of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageb74 7#c7 ,state credit union supervisor ,the term ,state credit union supervisor has the meaning given that term in section #fjjc of the ,anti-,money ,laundering ,act of #bjbj 7#ca ,u4,s4,c4 #ecaa note74 #ag4 ,amendments to clarify that payment stablecoins are not securities or commodities and permitted payment stablecoin issuers are not investment companies 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 defined in section #b of the ,,genius ,act44 7b7 ,investment ,company ,act of #aidj ,the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq47 is amended-- 7#a7 in section #b7;a77#cf7 of the ,act 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 defined in section #b of the ,,genius ,act42 and 7#b7 in section #c7;c77#c7 of the ,act 7#ae ,u4,s4,c4 #hj;a-#c7;c77#c771 by inserting any permitted payment stablecoin issuer1 as such term is defined in section #b of the ,,genius ,act2 after therefor24 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 defined in section #b of the ,,genius ,act44 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 defined in section #b of the ,,genius ,act44 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 defined in section #b of the ,,genius ,act44 7f7 ,commodity ,exchange ,act ,section #a;a7#i7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a;a7#i77 is amended by adding at the end the following3 ,the term commodity does not include a payment stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined in section #b of the ,,genius ,act4 #ah4 ,exception for foreign payment stablecoin issuers and reciprocity for payment stablecoins issued in overseas jurisdictions 7a7 ,in general ,the prohibitions under section #c shall not apply to a foreign payment stablecoin issuer if all of the following apply3 7#a7 ,the foreign payment stablecoin issuer is subject to regulation and supervision by a foreign payment stablecoin regulator of a foreign country1 a territory of the ,united ,states1 ,puerto ,rico1 ,guam1 ,american ,samoa1 or the ,virgin ,islands that has a regulatory and supervisory regime with respect to payment stablecoins that the ,secretary of the ,treasury determines1 pursuant to subsection 7b71 is comparable to the regulatory and supervisory regime established under this ,act1 including1 in particular1 the requirements under section #d7;a74 7#b7 ,the foreign payment stablecoin issuer is registered with the ,comptroller pursuant to subsection 7c74 7#c7 ,the foreign payment stablecoin issuer holds reserves in a ,united ,states financial institution sufficient to meet liquidity demands of ,united ,states customers1 unless otherwise permitted under a reciprocal arrangement established pursuant to subsection 7d74 7b7 ,treasury determination 7#a7 ,in general ,the ,secretary of the ,treasury may1 in consultation with the ,federal payment stablecoin regulators1 make a determination as to whether a foreign country has a regulatory and supervisory regime that is comparable to the requirements established under this ,act1 including the requirements under section #d7;a74 7#b7 ,request ,a foreign payment stablecoin issuer or a foreign payment stablecoin regulator may request from the ,secretary of the ,treasury a determination under paragraph 7#a74 7#c7 ,timing for determination ,if a foreign payment stablecoin issuer or foreign payment stablecoin regulator requests a determination under paragraph 7#b71 the ,secretary of the ,treasury shall render a decision on the determination not later than #baj days after the receipt of a substantially complete determination request4 7#d7 ,rescission of determination 7,a7 ,in general ,the ,secretary of the ,treasury may1 in consultation with the ,federal payment stablecoin regulators1 rescind a determination made under paragraph 7#a71 if the ,secretary determines that the regulatory regime of such foreign country is no longer comparable to the requirements established under this ,act4 7,b7 ,limited safe harbor ,if the ,secretary of the ,treasury rescinds a determination pursuant to subparagraph 7,a71 a digital asset service provider shall have #ij days before the offer or sale of a payment stablecoin issued by the foreign payment stablecoin issuer that is the subject of the rescinded determination shall be in violation of section #c4 7#e7 ,public notice ,the ,secretary of the ,treasury shall keep and make publicly available a current list of foreign countries for which a determination under paragraph 7#a7 has been made4 7#f7 ,rulemaking ,not later than #a year after the date of enactment of this ,act1 the ,secretary of the ,treasury shall issue such rules as may be required to carry out this section4 7c7 ,registration and ongoing monitoring 7#a7 ,registration 7,a7 ,in general ,a foreign payment stablecoin issuer may offer or sell payment stablecoins using a digital asset service provider if the foreign payment stablecoin issuer is registered with the ,comptroller4 7,b7 ,registration approval ,a registration of a foreign payment stablecoin issuer filed in accordance with this section shall be deemed approved on the date that is #cj days after the date the ,comptroller receives the registration1 unless the ,comptroller notifies the foreign payment stablecoin issuer in writing that such registration has been rejected4 7,c7 ,standards for rejection ,in determining whether to reject a foreign payment stablecoin issuer's registration1 the ,comptroller shall consider-- 7i7 the final determination of the ,secretary of the ,treasury under this section2 7ii7 the financial and managerial resources of the ,united ,states operations of the foreign payment stablecoin issuer2 7iii7 whether the foreign payment stablecoin issuer will provide adequate information to the ,comptroller as the ,comptroller determines is necessary to determine compliance with this ,act2 7iv7 whether the foreign payment stablecoin presents a risk to the financial stability of the ,united ,states2 and 7v7 whether the foreign payment stablecoin issuer presents illicit finance risks to the ,united ,states4 7,d7 ,procedure for appeal ,if the ,comptroller rejects a registration1 not later than #cj days after the date of receipt of such rejection1 the foreign payment stablecoin issuer may appeal the rejection by notifying the ,comptroller of the request to appeal4 7,e7 ,rulemaking ,pursuant to section #ac of this ,act1 the ,comptroller shall issue rules relating to the standards for approval of registration requests and the process for appealing denials of such registration requests4 7,f7 ,public notice ,the ,comptroller shall keep and make publicly available a current list of foreign payment stablecoin issuer registrations that have been approved4 7#b7 ,ongoing monitoring ,a foreign payment stablecoin issuer shall-- 7,a7 be subject to reporting1 supervision1 and examination requirements as determined by the ,comptroller2 and 7,b7 consent to ,united ,states jurisdiction relating to the enforcement of this ,act4 7#c7 ,lack of compliance 7,a7 ,comptroller action ,the ,comptroller may1 in consultation with the ,secretary of the ,treasury1 rescind approval of a registration of a foreign payment stablecoin issuer under this subsection if the ,comptroller determines that the foreign payment stablecoin issuer is not in compliance with the requirements of this ,act1 including for maintaining insufficient reserves or posing an illicit finance risk or financial stability risk4 7,b7 ,secretary action ,the ,secretary of the ,treasury1 in consultation with the ,comptroller1 may revoke a registration of a foreign payment stablecoin issuer under this subsection if the ,secretary determines that reasonable grounds exist for concluding that the foreign payment stablecoin issuer presents economic sanctions evasion1 money laundering1 or other illicit finance risks1 or1 as applicable1 violations1 or facilitation thereof4 7d7 ,reciprocity 7#a7 ,in general ,the ,secretary of the ,treasury may create and implement reciprocal arrangements or other bilateral agreements between the ,united ,states and jurisdictions with payment stablecoin regulatory regimes that are comparable to the requirements established under this ,act1 including1 in particular1 section #d7;a71 and can demonstrate adequate supervisory and enforcement capacity to facilitate international transactions and interoperability with ,united ,states dollar-denominated payment stablecoins issued overseas4 7#b7 ,completion ,the ,secretary of the ,treasury should complete the arrangements under this subsection not later than the date that is #b years after the date of enactment of this ,act4 #ai4 ,effective date ,this ,act1 and the amendments made by this ,act1 shall take effect on the earlier of-- 7#a7 the date that is #ah 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 any final regulations implementing this ,act4 ,may #e1 #bjbe,read the second time and placed on the calendar