,,ii #aaith ,,congress #ast ,session ,s4 #cid ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,february #d1 #bjbe,mr4 ,hagerty 7for himself1 ,mr4 ,scott of ,south ,carolina1 ,mrs4 ,gillibrand1 and ,ms4 ,lummis7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,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 of #bjbe or the ,,genius ,act of #bjbe4 #b4 ,definitions ,in this ,act3 7#a7 ,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#b7 ,board ,the term ,board means the ,board of ,governors of the ,federal ,reserve ,system4 7#c7 ,comptroller ,the term ,comptroller means the ,comptroller of the ,currency4 7#d7 ,comptroller-regulated entity ,the term ,comptroller-regulated entity means any ,federal qualified nonbank payment stablecoin issuer that is subject to regulation and supervision exclusively by the ,comptroller1 pursuant to section #d7;a77#g74 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 which is recorded on a cryptographically-secured distributed ledger4 7#g7 ,distributed ledger ,the term distributed ledger means technology where data is shared across a network that creates a public digital ledger of verified transactions or information among network participants and the data is linked using cryptography to maintain the integrity of the public ledger and execute other functions4 7#h7 ,federal qualified nonbank payment stablecoin issuer ,the term ,federal qualified nonbank payment stablecoin issuer means a nonbank entity approved by the primary ,federal payment stablecoin regulator1 pursuant to section #e1 to issue payment stablecoins4 7#i7 ,institution-affiliated party ,with respect to a permitted payment stablecoin issuer1 the term institution-affiliated party means any director1 officer1 employee1 or person in control of1 or agent for1 the permitted payment stablecoin issuer4 7#aj7 ,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 union1 as defined in section #aja of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageb74 7#aa7 ,monetary value ,the term monetary value means a national currency or deposit 7as defined under ,section #c of the ,federal ,deposit ,insurance ,act7 denominated in a national currency4 7#ab7 ,national currency ,the term national currency means a ,federal ,reserve note 7as the term is used in the first undesignated paragraph of section #af of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #daa771 money issued by a central bank1 and money issued by an intergovernmental organization pursuant to an agreement by #a or more governments4 7#ac7 ,nonbank entity ,the term nonbank entity means a person that is not an insured depository institution or subsidiary of an insured depository institution4 7#ad7 ,payment stablecoin ,the term payment stablecoin-- 7,a7 means a digital asset-- 7i7 that is or is designed to be 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 value2 and 7,,ii7 represents it will maintain or creates the reasonable expectation that it will maintain a stable value relative to the value of a fixed amount of monetary value2 and 7,b7 that is not-- 7i7 a national currency2 or 7ii7 a security 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;a774 7#ae7 ,permitted payment stablecoin issuer ,the term permitted payment stablecoin issuer means-- 7,a7 a subsidiary of an insured depository institution that has been approved to issue payment stablecoins under section #e2 7,b7 a ,federal qualified nonbank payment stablecoin issuer that has been approved to issue payment stablecoins under section #e2 or 7,c7 a ,state qualified payment stablecoin issuer4 7#af7 ,person ,the term person means an individual1 partnership1 company1 corporation1 association 7incorporated or unincorporated71 trust1 estate1 cooperative organization1 or other entity4 7#ag7 ,primary ,federal payment stablecoin regulator 7,a7 ,in general ,the term primary ,federal payment stablecoin regulator means-- 7i7 with respect to an insured depository institution 7other than an insured credit union7 or a subsidiary of an insured depository institution 7other than an insured credit union71 the appropriate ,federal banking agency of such insured depository institution 7as defined under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac772 7ii7 with respect to an insured credit union or a subsidiary of an insured credit union1 the ,national ,credit ,union ,administration2 7iii7 with respect to a ,federal qualified nonbank payment stablecoin issuer that is not a national bank1 the ,comptroller2 and 7iv7 with respect to any entity chartered by the ,comptroller1 the ,comptroller4 7,b7 ,primary ,federal payment stablecoin regulators ,the term primary ,federal payment stablecoin regulators means the ,comptroller1 the ,board1 the ,corporation1 and the ,national ,credit ,union ,administration4 7#ah7 ,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#ai7 ,state ,the term ,state means each of the several ,states1 the ,district of ,columbia1 and each territory of the ,united ,states4 7#bj7 ,state qualified payment stablecoin issuer ,the term ,state qualified payment stablecoin issuer means an entity that-- 7,a7 is legally established and approved to issue payment stablecoins by a ,state payment stablecoin regulator2 and 7,b7 issues a payment stablecoin in compliance with the requirements under section #d4 7#ba7 ,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#bb7 ,state regulated depository institution ,the term ,state regulated 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#bc7 ,subsidiary of an insured credit union ,with respect to an insured credit union1 the term subsidiary of an insured credit union means-- 7,a7 an organization providing services to the insured credit union that are associated with the routine operations of credit unions1 as described under section #ajg7g77;,i7 of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #ageg7g77;,i772 and 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 loan4 #c4 ,limitation on who may issue a payment stablecoin ,it shall be unlawful for any person other than a permitted payment stablecoin issuer to issue a payment stablecoin in the ,united ,states4 #d4 ,requirements for issuing payment stablecoins 7a7 ,standards for the issuance of payment stablecoins 7#a7 ,in general ,permitted payment stablecoin issuers shall-- 7,a7 maintain reserves backing the issuer's payment stablecoins outstanding on an at least #a to #a basis1 with reserves comprising-- 7i7 ,united ,states coins and currency 7including ,federal reserve notes72 7ii7 funds held as demand deposits 7or other deposits that may be withdrawn upon request at any time7 at insured depository institutions1 regulated foreign depository institutions1 or insured shares at insured depository institutions1 subject to limitations established by the ,corporation and the ,national ,credit ,union ,administration1 respectively1 to address safety and soundness risks of such insured depository institutions2 7iii7 ,treasury bills1 notes1 or bonds-- 7,i7 with a remaining maturity of #ic days or less2 or 7,,ii7 issued with a maturity of #ic days or less2 7iv7 repurchase agreements with a maturity of #g days or less that are backed by ,treasury bills with a maturity of #ij days or less2 7v7 reverse repurchase agreements with a maturity of #g days or less 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 house2 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 money market funds1 invested solely in underlying assets described in clauses 7i7 through 7iv7 of subparagraph 7,a72 or 7vii7 ,central ,bank reserve deposits2 7,b7 publicly disclose the issuer's redemption policy2 7,c7 establish procedures for timely redemption of outstanding payment stablecoins2 and 7,d7 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 under subparagraph 7,a74 7#b7 ,prohibition on rehypothecation ,reserves described under paragraph 7#a77;,a7 may not be pledged1 rehypothecated1 or reused1 except for the purpose of creating liquidity to meet reasonable expectations of requests to redeem payment stablecoins1 such that reserves in the form of ,treasury bills may be pledged as collateral for repurchase agreements with a maturity of #ij days or less1 provided that either-- 7,a7 the repurchase agreements are cleared by a central clearing counterparty that is approved by the primary ,federal or ,state payment stablecoin regulator2 or 7,b7 the permitted payment stablecoin issuer receives the prior approval of the primary ,federal or ,state payment stablecoin regulator4 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 to-- 7i7 the primary ,federal payment stablecoin regulator2 or 7ii7 in the case of a ,state qualified payment stablecoin issuer1 to the ,state payment stablecoin regulator4 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 criminal penalties 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 jointly1 or in the case of a ,state qualified payment stablecoin issuer1 the ,state payment stablecoin regulator shall1 issue-- 7i7 capital requirements applicable to permitted payment stablecoin issuers1 which may not exceed what is sufficient to ensure the permitted payment stablecoin issuer's ongoing operations2 7ii7 appropriate liquidity and interest rate risk management standards applicable to permitted payment stablecoin issuers1 which may not exceed what is sufficient to ensure the financial integrity of the permitted payment stablecoin issuer and the ability of the issuer to meet the financial obligations of the issuer1 including redemptions2 and 7iii7 appropriate operational1 compliance1 and information technology risk management standards1 including ,bank ,secrecy ,act and sanctions compliance1 tailored to the business model and risk profile of the permitted payment stablecoin issuer1 consistent with other legal authorities4 7,b7 ,rule of construction ,nothing in this paragraph shall be construed to limit-- 7i7 the authority of the primary ,federal regulators1 in prescribing standards under this paragraph1 to tailor or differentiate among issuers on an individual basis or by category1 taking into consideration their capital structure1 riskiness1 complexity1 financial activities 7including financial activities of their subsidiaries71 size1 and any other risk related factors that the primary ,federal regulator determines appropriate2 or 7ii7 the supervisory1 regulatory1 or enforcement authority of an appropriate ,federal banking agency to further the safe and sound operation of an institution under the supervision of the appropriate ,federal banking agency4 7,c7 ,applicability of existing capital standards ,with respect to the promulgation of rules under subsection 7a77#a77;,a71 section #aga of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecga7;a77#a77;,a77 shall not apply4 7#e7 ,treatment under the ,bank ,secrecy ,act ,a permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the ,bank ,secrecy ,act4 7#f7 ,limitation on stablecoin activities 7,a7 ,in general ,a permitted payment stablecoin issuer may only-- 7i7 issue payment stablecoins2 7ii7 redeem payment stablecoins2 7iii7 manage related reserves 7including purchasing and holding reserve assets72 7iv7 provide custodial or safekeeping services for payment stablecoins1 required reserves1 or private keys of payment stablecoins2 and 7v7 undertake other functions that directly support the work of issuing and redeeming payment stablecoins4 7,b7 ,rule of construction ,nothing in subparagraph 7,a7 shall prevent a permitted stablecoin issuer from engaging in non-stablecoin activities that are explicitly allowed by the relevant regulator4 7#g7 ,regulation by the ,comptroller 7,a7 ,in general ,a ,federal qualified nonbank payment stablecoin issuer shall be regulated and supervised exclusively by the ,comptroller1 which shall have authority1 in coordination with other relevant regulators1 to issue such regulations and orders as necessary to ensure the safety and soundness of the issuers1 consistent with the provisions of this ,act4 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 nonbank payment stablecoin issuers ,the ,comptroller of the ,currency shall1 in coordination with other relevant regulators1 issue such regulations and orders as necessary to ensure the safety and soundness of any nonbank entity approved by the ,comptroller to issue payment stablecoins4 4 7b7 ,state-,level regulatory regimes 7#a7 ,option for ,state-level regulatory regime ,notwithstanding the ,federal regulatory framework established under subsection 7a71 a stablecoin issuer with a total market capitalization 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 ,review ,state regulators shall review ,state-level regulatory regimes according to criteria the ,state regulators establish for determining whether a ,state-level regulatory regime is substantially similar to the ,federal regulatory framework under subsection 7a74 7#c7 ,certification 7,a7 ,initial certification ,subject to subparagraph 7,b71 not later than #a year after the date of enactment of this ,act1 ,state regulators shall submit to the ,secretary of the ,treasury an initial certification that their ,state-level regulatory regime meets the criteria for substantial similarity under paragraph 7#b74 7,b7 ,form of certification ,the initial certification required under subparagraph 7,a7 shall contain1 in a form prescribed by the ,secretary of the ,treasury1 an attestation that the ,state-level regulatory regime meets the criteria for substantial similarity under paragraph 7#b74 7,c7 ,annual recertification ,not later than a date to be determined by the ,secretary each year1 the ,state shall submit to the ,secretary of the ,treasury an additional certification that confirms the accuracy of initial certification submitted under subparagraph 7,a74 7#d7 ,not substantially similar 7,a7 ,in general ,if a ,state regulator does not submit a certification under paragraph 7#c71 then a payment stablecoin issuer operating under this subsection shall be subject to the ,federal regulatory framework as described in subsection 7c71 notwithstanding the market capitalization threshold therein4 7,b7 ,treasury review ,the ,secretary of the ,treasury may reject a certification under paragraph 7#c7 if the ,secretary determines that the ,state-level regulatory regime is not substantially similar to the ,federal regulatory framework under subsection 7a71 and the payment stablecoin issuer shall be subject to the ,federal regulatory framework as described in subsection 7c71 notwithstanding the market capitalization threshold therein4 7,c7 ,appellate review ,a payment stablecoin issuer may challenge the determination of the ,state regulator or the ,secretary of the ,treasury under this paragraph in the ,united ,states ,district ,court for the ,district of ,columbia4 7#e7 ,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#c74 7c7 ,transition to ,federal regulation 7#a7 ,depository institution ,a ,state-regulated depository institution that has been approved as a payment stablecoin issuer with a market capitalization of more than #aj1jjj1jjj1jjj shall-- 7,a7 not later than #cfj days after reaching such market capitalization1 transition to regulation under the ,federal regulatory framework of the ,board2 or 7,b7 beginning on the date of reaching such market capitalization1 cease issuing new stablecoins until the ,state-regulated stablecoin issuer is under the #aj1jjj1jjj1jjj market capitalization threshold4 7#b7 ,other institutions ,a ,state qualified payment stablecoin issuer not described in paragraph 7#a7 with a market capitalization of more than #aj1jjj1jjj1jjj shall-- 7,a7 not later than #cfj days after reaching such market capitalization1 transition to regulation under the regulatory framework of the ,comptroller2 or 7,b7 beginning on the date of reaching such market capitalization1 cease issuing new stablecoins until the ,state-regulated stablecoin issuer is under the #aj1jjj1jjj1jjj market capitalization threshold4 7#c7 ,conditional approval ,upon filing an application with the appropriate ,federal regulator1 a ,state qualified payment stablecoin issuer shall be deemed conditionally approved1 pending final approval or denial of the application4 7#d7 ,waiver ,the applicable ,federal regulator may waive the requirement under paragraph 7#a7 or 7#b7 to permit a ,state qualified payment stablecoin issuer to remain under a ,state-level regulatory regime4 7d7 ,rulemaking 7#a7 ,in general ,the primary ,federal payment stablecoin regulators and ,state payment stablecoin regulators may issue such orders and regulations as may be necessary to administer and carry out the requirements of this section1 including to establish conditions1 and to prevent evasions thereof4 7#b7 ,joint issuance of regulation ,all regulations issued to carry out this section shall be issued jointly by the primary ,federal payment stablecoin regulators1 if not issued by a ,state payment stablecoin regulator4 7#c7 ,rulemaking deadline ,not later than the end of the #ahj-;day period beginning on the date of enactment of this ,act1 the ,federal payment stablecoin regulators shall issue regulations to carry out this section4 #e4 ,approval of subsidiaries of insured depository institutions and ,federal qualified nonbank payment stablecoin issuers 7a7 ,application 7#a7 ,in general ,the primary ,federal payment stablecoin regulator shall receive1 review1 and approve applications from any insured depository institution that seeks to issue payment stablecoins through a subsidiary and any nonbank entity that seeks to issue payment stablecoins4 ,the primary ,federal payment stablecoin regulator shall establish a process for the licensing and regulation of these entities4 7#b7 ,authority to issue regulations and process applications ,the primary ,federal payment stablecoin regulators shall1 before the effective date described in section #af-- 7,a7 issue regulations to carry out this section2 and 7,b7 pursuant to the regulations described in subparagraph 7,a71 accept and process applications under this ,act4 7#c7 ,mandatory approval process ,the primary ,federal payment stablecoin regulator shall1 upon receipt of a complete application1 evaluate and make a determination on each application based on the criteria established under this ,act4 7b7 ,evaluation of applications ,a 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 ability of the applicant 7or1 in the case of an applicant that is an insured depository institution1 the subsidiary of the applicant71 based on the financial condition and resources1 to meet the requirements set forth in section #d4 7d7 ,timing for decision2 grounds for denial 7#a7 ,timing ,the primary ,federal payment stablecoin regulator shall render a decision on an application no later than #abj days after informing the applicant that the application is complete4 7#b7 ,denial of application 7,a7 ,grounds for denial ,the primary ,federal payment stablecoin regulator shall only deny a 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 7,b7 ,explanation required ,if the 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 request1 the primary ,federal payment stablecoin regulator shall notice a time 7not later than #cj days after the date of receipt of the request7 and place at which the applicant may appear1 personally or through counsel1 to submit written materials or provide oral testimony and oral argument74 7iii7 ,final determination ,not later than #fj days after the date of a hearing under this subparagraph1 the primary ,federal payment stablecoin regulator shall notify the applicant of the final determination of the ,comptroller1 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 the 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 ,report on pending applications ,the ,comptroller shall annually report to ,congress on the applications that have been pending for #f months or longer since the date of the initial application filed under subsection 7a7 where the applicant has been informed that the application remains incomplete1 including providing documentation on the status of the application and why the application has not yet been approved4 7f7 ,rulemaking ,the ,comptroller shall issue rules necessary for the regulation of the issuance of payment stablecoins1 but may not impose requirements inconsistent with the requirements specified under section #d4 #f4 ,supervision and enforcement with respect to subsidiaries of insured depository institutions and ,comptroller-regulated entities 7a7 ,supervision 7#a7 ,subsidiary of an insured depository institution 7,a7 ,in general ,each permitted payment stablecoin issuer that is a subsidiary of an insured depository institution shall be subject to supervision by the primary ,federal payment stablecoin regulator in the same manner as such insured depository institution4 7,b7 ,gramm-,leach-,bliley ,act ,for purposes of title ,v of the ,gramm-,leach-,bliley ,act 7#ae ,u4,s4,c4 #fhja et seq47 each permitted payment stablecoin issuer that is a subsidiary of an insured depository institution shall be deemed a financial institution4 7#b7 ,comptroller-regulated entities 7,a7 ,submission of reports ,each ,comptroller-regulated entity shall1 upon request1 submit reports to the ,comptroller as to-- 7i7 the financial condition of the ,comptroller-regulated entity1 systems for monitoring and controlling financial and operating risks2 and 7ii7 compliance by the ,comptroller-regulated entity 7and any subsidiary thereof7 with this ,act4 7,b7 ,examinations ,the ,comptroller may make examinations of a ,comptroller-regulated entity and each subsidiary of such entity in order to inform the ,comptroller of-- 7i7 the nature of the operations and financial condition of the ,comptroller-regulated entity2 7ii7 the financial1 operational1 and other risks within the ,comptroller-regulated entity that may pose a threat to-- 7,i7 the safety and soundness of the ,comptroller-regulated entity2 or 7,,ii7 the stability of the financial system of the ,united ,states2 and 7iii7 the systems of the ,comptroller-regulated entity for monitoring and controlling the risks described in clause 7ii74 7,c7 ,requirements for efficiency 7i7 ,use of existing reports ,in supervising and examining a ,comptroller-regulated entity1 the ,comptroller shall1 to the fullest extent possible1 use existing reports and other supervisory information4 7ii7 ,avoidance of duplication ,the ,comptroller shall1 to the fullest extent possible1 avoid duplication of examination activities1 reporting requirements1 and requests for information in carrying out this ,act with respect to a ,comptroller-regulated entity4 7iii7 ,consideration of burden ,the ,comptroller shall1 with respect to any examination or request for the submission of a report under this paragraph1 only request examinations and reports at a cadence and in a format that is similar to those required for similarly situated ,comptroller-regulated entities4 7b7 ,enforcement 7#a7 ,suspension or revocation of registration ,the primary ,federal payment stablecoin regulator may prohibit a permitted payment stablecoin issuer from issuing payment stablecoins1 if the primary ,federal payment stablecoin regulator determines that such permitted payment stablecoin issuer1 or an institution-affiliated party of the permitted payment stablecoin issuer1 is-- 7,a7 materially violating or has materially violated this ,act or any regulation or order issued under this ,act2 or 7,b7 materially violating or has materially violated any condition imposed in writing by the primary ,federal payment stablecoin regulator in connection with a written agreement entered into between the permitted payment stablecoin issuer and the primary ,federal payment stablecoin regulator4 7#b7 ,cease-and-desist proceedings ,if the primary ,federal payment stablecoin regulator has reasonable cause to believe that a permitted payment stablecoin issuer or any institution-affiliated party of a permitted payment stablecoin issuer is violating1 has violated1 or is attempting to violate this ,act1 any regulation or order issued under this ,act1 or any written agreement entered into with the primary ,federal payment stablecoin regulator or condition imposed in writing by the primary ,federal payment stablecoin regulator in connection with any application or other request1 the primary ,federal payment stablecoin regulator 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 may remove an institution-affiliated party of a permitted payment stablecoin issuer from their position or office or prohibit further participation in the affairs of the permitted payment stablecoin issuer or all permitted payment stablecoin issuers by such institution-affiliated party1 if the primary ,federal payment stablecoin regulator determines that-- 7,a7 the institution-affiliated party has1 directly or indirectly1 committed a violation or attempted violation of this ,act or any regulation or order issued under this ,act2 or 7,b7 the institution-affiliated party has committed a violation of any provision of subchapter ,,ii of chapter #ec of title #ca1 ,united ,states ,code4 7#d7 ,procedures 7,a7 ,in general ,if the primary ,federal payment stablecoin regulator identifies a violation or attempted violation of this ,act or makes a determination under paragraph 7#a71 7#b71 or 7#c71 the primary ,federal payment stablecoin regulator shall comply with the procedures set forth in subsections 7b7 and 7e7 of sections #h of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah74 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;h774 7,c7 ,injunction ,the primary ,federal payment stablecoin regulator may1 in 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 for judicial enforcement of any effective and outstanding notice or order issued under this subsection4 7,d7 ,temporary cease-and-desist proceedings ,if the primary ,federal payment stablecoin regulator determines that a violation or attempted violation of this ,act or an action with respect to which a determination was made under paragraph 7#a71 7#b71 or 7#c71 or the continuation thereof1 is likely to cause insolvency or significant dissipation of assets or earnings of a permitted payment stablecoin issuer1 or is likely to weaken the condition of the permitted payment stablecoin issuer or otherwise prejudice the interests of the customers of the permitted payment stablecoin issuer prior to the completion 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 to issue a temporary cease-and-desist order4 7#e7 ,civil money penalties 7,a7 ,failure to be approved ,any person who issues a ,united ,states dollar-denominated payment stablecoin and who is not a permitted payment stablecoin issuer1 and any institution-affiliated party of such a person who knowingly participates is 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 primary ,federal payment stablecoin regulator in connection with a written agreement entered into between the permitted payment stablecoin issuer and the primary ,federal payment stablecoin regulator1 shall be liable for a civil penalty of up to #ajj1jjj for each day during which the violation continues4 7,c7 ,second tier ,except as provided in subparagraph 7,a71 and in addition to the penalties described under subparagraph 7,b71 a permitted payment stablecoin issuer or institution-affiliated party of such permitted payment stablecoin issuer who knowingly participates in a violation of any provision of this ,act1 or any regulation or order issued thereunder1 is liable for a civil penalty of up to an additional #ajj1jjj for each day during which the violation continues4 7,d7 ,procedure ,any penalty imposed under this paragraph may be assessed and collected by the primary ,federal payment stablecoin regulator pursuant to the procedures set forth in section #h7;i77#b7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahah7;i77#b774 7,e7 ,notice and orders after separation from service ,the resignation1 termination of employment or participation1 or separation of an institution-affiliated party 7including a separation caused by the closing of a permitted payment stablecoin issuer7 shall not affect the jurisdiction and authority of the primary ,federal payment stablecoin regulator to issue any notice or order and proceed under this subsection against any such party1 if such notice or order is served before the end of the #f-year period beginning on the date such party ceased to be an institution-affiliated party with respect to such permitted payment stablecoin issuer4 7#f7 ,non-applicability to a ,state qualified payment stablecoin issuer ,this subsection shall not apply to a ,state qualified payment stablecoin issuer4 #g4 ,state qualified payment stablecoin issuers 7a7 ,in general ,a ,state payment stablecoin regulator shall have supervisory1 examination1 and enforcement authority over a ,state qualified payment stablecoin issuer of such ,state4 7b7 ,authority ,to enter into agreements 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 carry out the supervision1 examination1 and enforcement authority 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 a ,state qualified payment stablecoin issuers4 7e7 ,enforcement authority in exigent circumstances 7#a7 ,board 7,a7 ,in general ,subject to subparagraph 7,c71 in exigent circumstances1 the ,board may1 after not less than #e days 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 that are exigent in nature4 7,b7 ,rulemaking ,not later than the end of the #ahj-;day period beginning on the date of enactment of this ,act1 the ,board shall issue rules to set forth those exigent circumstances in which the ,board may act under this paragraph4 7,c7 ,limitations ,if 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 stablecoin issuer1 the ,board may impose such restrictions as the ,board determines to be necessary to address such risk4 ,such restrictions 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 the payment of dividends by the ,state qualified payment stablecoin issuer2 7ii7 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 7iii7 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 ,state qualified payment stablecoin issuer1 or any affiliate 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 located or in the ,united ,states ,district ,court for the ,district of ,columbia 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 in exigent circumstances1 the ,comptroller shall1 after not less than #e days prior written notice to the applicable ,state payment stablecoin regulator1 take an enforcement action against a ,comptroller-regulated entity or an institution-affiliated party of such entity for violations of this ,act4 7,b7 ,rulemaking ,not later than the end of the #ahj-;day period beginning on the date of enactment of this ,act1 the ,comptroller shall issue rules to set forth those exigent circumstances in which the ,comptroller may act under this paragraph4 7,c7 ,limitations ,if the ,comptroller determines that there is reasonable cause to believe that the continuation by a ,comptroller-regulated entity of any activity constitutes a serious risk to the financial safety1 soundness1 or stability of the stablecoin issuer1 the ,comptroller shall impose such restrictions as the ,comptroller determines to be necessary to address such risk4 ,such restrictions 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 the payment of dividends by the ,comptroller-regulated entity2 7ii7 transactions between the ,comptroller-regulated entity1 a holding company1 and the subsidiaries or affiliates of either the ,comptroller-regulated entity or the holding company2 and 7iii7 any activities of the ,comptroller-regulated entity 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 ,comptroller-regulated entity4 7,d7 ,review of directive 7i7 ,administrative review 7,i7 ,in general ,after a directive described in subparagraph 7,c7 is issued1 the ,comptroller-regulated entity1 or any affiliate of the ,comptroller-regulated entity subject to the directive1 may object and present to the ,comptroller1 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 ,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 located or in the ,united ,states ,district ,court for the ,district of ,columbia 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 ,gramm-,leach-,bliley ,act ,for purposes of title ,v of the ,gramm-,leach-,bliley ,act 7#ae ,u4,s4,c4 #fhja et seq47 a ,state qualified payment stablecoin issuer is deemed a financial institution4 7g7 ,effect on ,state law 7#a7 ,host ,state ,law ,the consumer protection laws that generally apply to the operation of a payment stablecoin issuer of the ,host ,state apply to the activities conducted in the ,host ,state by an out-of-,state ,state qualified payment stablecoin issuer to the same extent as those requirements apply to the activities conducted in the ,host ,state by an out-of-,state ,federal qualified nonbank 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 payment stablecoin issuer shall govern the activities of the payment stablecoin issuer conducted in the ,host ,state4 #h4 ,customer protection 7a7 ,in general ,a person may only engage in the business of providing custodial or safekeeping services for permitted payment stablecoins or private keys of permitted payment stablecoins1 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 #ahac7 or a ,state credit union supervisor1 as defined under section #fjjc of the ,anti-,money ,laundering ,act of #bjbj1 and such state bank supervisor or state credit union supervisor makes available to the ,board such information as the ,board determines necessary and relevant to the categories of information under subsection 7d72 and 7#b7 complies with the segregation requirements under subsection 7b71 unless such person complies with similar requirements as required by a primary ,federal payment stablecoin regulator1 the ,securities and ,exchange ,commission1 or the ,commodity ,futures ,trading ,commission4 7b7 ,segregation requirement ,a person described in subsection 7a7 shall-- 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 receives1 acquires1 or holds payment stablecoins1 private keys1 cash1 and other property 7hereinafter in this section referred to as the customer7 as belonging to such customer2 and 7#b7 take such steps as are appropriate to protect the payment stablecoins1 private keys1 cash1 and other property of a customer from the claims of creditors of the person4 7c7 ,commingling prohibited 7#a7 ,in general ,payment stablecoins1 cash1 and other property of a customer shall be separately accounted for by a person described in subsection 7a7 and shall not be commingled with the funds of the person4 7#b7 ,exception ,notwithstanding paragraph 7#a7-- 7,a7 the payment stablecoins1 cash1 and other property of a customer may1 for convenience1 be commingled and deposited in an omnibus account holding the payment stablecoins1 cash1 and other property of more than #a customer at an insured depository institution or trust company2 7,b7 such share of the payment stablecoins1 cash1 and other property of the customer that shall be necessary to transfer1 adjust1 or settle a transaction or transfer of assets may be withdrawn and applied to such purposes1 including the payment of commissions1 taxes1 storage1 and other charges lawfully accruing in connection with the provision of services by a person described in subsection 7a72 and 7,c7 in accordance with such terms and conditions as the ,board may prescribe by rule1 regulation1 or order1 any customer payment stablecoin1 cash1 and other property described in this subsection may be commingled and deposited in customer accounts with payment stablecoins1 cash1 and other property received by the person and required by the ,board to be separately accounted for1 treated1 and dealt with as belonging to customers4 7d7 ,regulatory information ,a person described under subsection 7a7 shall submit to the applicable primary 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 #i4 ,treatment of insolvent payment stablecoin issuers 7a7 ,in general ,in any insolvency proceeding1 including any proceeding under title #aa1 ,united ,states ,code1 or any insolvency proceeding by a primary ,federal payment stablecoin regulator or a ,state banking supervisor with respect to a payment stablecoin issuer1 the claim of a person holding payment stablecoins issued by the payment stablecoin issuer shall have priority over all other claims against the payment stablecoin issuer4 7b7 ,priority in bankruptcy proceedings ,section #ejg of title #aa1 ,united ,states ,code1 is amended-- 7#a7 in subsection 7a71 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 any claim of a person holding payment stablecoins1 as defined in section #b of the ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins of #bjbe1 issued by a debtor shall have first priority over any other claim against the debtor under this title4 4 7c7 ,debtor ,a payment stablecoin issuer that is not a depository institution 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac77 may be considered a debtor under title #aa1 ,united ,states ,code4 #aj4 ,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 governments1 shall assess and1 if necessary1 may1 pursuant to section #eec of title #e and in a manner consistent with the ,national ,technology ,transfer and ,advancement ,act of #aiie 7,public ,law #ajd-aac71 prescribe standards for payment stablecoin issuers to promote compatibility and interoperability4 #aa4 ,study on endogenously collateralized stablecoins 7a7 ,study by ,treasury 7#a7 ,study ,the ,secretary of the ,treasury1 in consultation with the ,board1 the ,comptroller1 the ,corporation1 and the ,securities and ,exchange ,commission1 shall carry out a study of endogenously collateralized stablecoins4 7#b7 ,report ,not later than #cfe days after the date of the enactment of this ,act1 the ,secretary shall provide to the ,committee on ,financial ,services of the ,house of ,representatives and the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate a report that contains all findings made in carrying out the study under 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 nature of reserve compositions2 7,e7 types of algorithms being employed2 7,f7 governance structure1 including aspects of decentralization2 7,g7 nature of public promotion and advertising2 and 7,h7 clarity and availability of consumer notices disclosures4 7b7 ,endogenously collateralized stablecoin defined ,in this section1 the term endogenously collateralized stablecoin means any digital asset-- 7#a7 in which its originator has represented will be converted1 redeemed1 or repurchased for a fixed amount of monetary value2 and 7#b7 that relies solely on the value of another digital asset created or maintained by the same originator to maintain the fixed price4 #ab4 ,reports 7a7 ,rulemaking status ,not later than #f months after the date of enactment of this ,act1 the primary ,federal payment stablecoin regulators shall provide a status update on the development of the rulemaking under this ,act to the ,committee on ,financial ,services of the ,house of ,representatives and the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate4 7b7 ,annual reporting requirement ,beginning on the date that is #a year after the date of enactment of this ,act1 and annually thereafter1 the ,board and ,comptroller 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 report on the status of the payment stablecoin industry1 including-- 7#a7 an overview of trends in payment stablecoin activities2 7#b7 a summary of the number of applications for 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 7c7 ,,fsoc report ,the ,financial ,stability ,oversight ,council shall incorporate the findings in the report under subsection 7b7 into the annual report of the ,council required under section #aab7;a77#b77,n7 of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #ecbb74 #ac4 ,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 or trust company to engage in activities permissible pursuant to applicable ,state and ,federal law1 including-- 7#a7 accepting or receiving deposits and issuing digital assets that represent deposits2 7#b7 utilizing a distributed ledger for the books and records of the entity and to affect intrabank transfers2 and 7#c7 providing custodial services for payment stablecoins1 private keys of payment stablecoins1 or reserves backing payment stablecoins4 7b7 ,treatment of custody activities ,the appropriate ,federal banking agency 7as defined under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac771 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 assets held in custody as a liability on any financial statement or balance sheet1 including payment stablecoin custody or safekeeping activities2 7#b7 to hold additional regulatory capital against assets in custody or safekeeping1 except as necessary to mitigate against operational risks inherent with the custody or safekeeping services1 as determined by-- 7,a7 the appropriate ,federal banking agency2 7,b7 the ,national ,credit ,union ,administration 7in the case of a credit union72 7,c7 a ,state bank supervisor 7as defined under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac772 or 7,d7 a ,state credit union supervisor 7as defined under section #fjjc of the ,anti-,money ,laundering ,act of #bjbj72 7#c7 to recognize a liability for any obligations related to activities or services performed for digital assets that the entity does not own if that liability would exceed the expense recognized in the income statement as a result of the corresponding obligation4 7c7 ,definitions ,in this section3 7#a7 ,depository institution ,the term depository institution has the meaning given that term under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac74 7#b7 ,credit union terms ,the terms ,federal credit union and ,state credit union have the meaning given those terms1 respectively1 under section #aja of the ,federal ,credit ,union ,act4 #ad4 ,amendments to clarify that payment stablecoins are not securities or commodities 7a7 ,investment ,advisers ,act of #aidj ,section #bjb7;a77#ah7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a77#ah77 is amended by adding at the end the following3 ,the term security does not include a payment stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined1 respectively1 in section #b of the ,clarity for ,payment ,stablecoins ,act of #bjbc44 7b7 ,investment ,company ,act of #aidj ,section #b7;a77#cf7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#b7;a77#cf77 is amended by adding at the end the following3 ,the term security does not include a payment stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined1 respectively1 in section #b of the ,clarity for ,payment ,stablecoins ,act of #bjbc44 7c7 ,securities ,act of #aicc ,section #b7;a77#a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#a77 is amended by adding at the end the following3 ,the term security does not include a payment stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined1 respectively1 in section #b of the ,clarity for ,payment ,stablecoins ,act of #bjbc44 7d7 ,securities ,exchange act of #aicd ,section #c7;a77#aj7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a77#aj77 is amended by adding at the end the following3 ,the term security does not include a payment stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined1 respectively1 in section #b of the ,clarity for ,payment ,stablecoins ,act of #bjbc44 7e7 ,securities ,investor ,protection ,act of #aigj ,section #af7ad7 of the ,securities ,investor ,protection ,act of #aigj 7#ae ,u4,s4,c4 #ghlll7#ad77 is amended by adding at the end the following3 ,the term security does not include a payment stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined1 respectively1 in section #b of the ,clarity for ,payment ,stablecoins ,act of #bjbc44 #ae4 ,reciprocity for stablecoins issued in overseas jurisdictions ,the ,federal ,reserve1 in collaboration with the ,secretary of the ,treasury1 shall create and implement reciprocal arrangements or other bilateral agreements between the ,united ,states and jurisdictions with substantially similar payment stablecoin regulatory regimes to facilitate international transactions and interoperability with ,united ,states dollar-denominated stablecoins issued overseas4 #af4 ,effective date 7a7 ,in general ,this ,act shall take effect on the earlier of-- 7#a7 #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 7b7 ,notice to ,congress ,the primary ,federal payment stablecoin regulators shall notify ,congress upon beginning to process applications under this ,act4 7c7 ,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 described under subsection 7a71 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 nonbank entity with an application pending to become a ,comptroller-regulated entity on that effective date4