,,ii #aaith ,,congress #ast ,session ,s4 #iai ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #aj1 #bjbe,mr4 ,hagerty 7for himself1 ,mr4 ,scott of ,south ,carolina1 ,mrs4 ,gillibrand1 ,ms4 ,lummis1 and ,ms4 ,alsobrooks7 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 ,act 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 ,office of the ,comptroller of the ,currency4 7#d7 ,comptroller-regulated entity ,the term ,comptroller-regulated entity means-- 7,a7 any ,federal qualified nonbank payment stablecoin issuer that is subject to regulation and supervision exclusively by the ,comptroller1 pursuant to section #d7;a77#g72 and 7,b7 any entity chartered by the ,comptroller4 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 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#h7 ,federal qualified nonbank payment stablecoin issuer ,the term ,federal qualified nonbank payment stablecoin issuer means a nonbank entity1 other than a ,state qualified payment stablecoin issuer1 approved by the ,comptroller1 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 controlling stockholder of 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 in section #c of the ,federal ,deposit ,insurance ,act7 denominated in a national currency4 7#ab7 ,money ,the term money means any financial instrument that is-- 7,a7 legal tender2 7,b7 required to be received by a taxing authority in satisfaction of tax obligations2 or 7,c7 widely accepted in an economy for the payment of goods or services4 7#ac7 ,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 #a or more governments4 7#ad7 ,nonbank entity ,the term nonbank entity means a person that is not a depository institution or subsidiary of a depository institution4 7#ae7 ,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 value1 not including a digital asset denominated in a fixed amount of monetary value2 7,,ii7 represents that such issuer 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 or 7,,iii7 has complied with the authorization requirements of this ,act2 and 7,b7 that-- 7i7 is not a national currency2 7ii7 is not a deposit 7as defined in section #c of the ,federal ,deposit ,insurance ,act71 including a deposit recorded using distributed ledger technology2 7iii7 does not offer a payment of yield or interest2 and 7iv7 is not 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 other than a bond1 note1 evidence of indebtedness1 or investment contract satisfying the conditions described in subparagraph 7,a74 7#af7 ,permitted payment stablecoin issuer ,the term permitted payment stablecoin issuer means a person incorporated in the ,united ,states that is-- 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#ag7 ,person ,the term person means an individual1 partnership1 company1 corporation1 association1 trust1 estate1 cooperative organization1 or other business entity1 incorporated or unincorporated4 7#ah7 ,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 7as defined under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac77 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 nonbank payment stablecoin issuer or any entity chartered by the ,comptroller1 the ,comptroller4 7#ai7 ,registered public accounting firm ,the term registered public accounting firm has the meaning given that term under section #b of the ,sarbanes-,oxley ,act of #bjjb 7#ae ,u4,s4,c4 #gbja74 7#bj7 ,state ,the term ,state means each of the several ,states of the ,united ,states1 the ,district of ,columbia1 and each territory of the ,united ,states4 7#ba7 ,state qualified payment stablecoin issuer ,the term ,state qualified payment stablecoin issuer means an entity that is legally established under the laws of a ,state and approved to issue payment stablecoins by a ,state payment stablecoin regulator4 7#bb7 ,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#bc7 ,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#bd7 ,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 ,issuance and treatment of payment stablecoins 7a7 ,issue ,it shall be unlawful for any person other than a permitted payment stablecoin issuer to issue a payment stablecoin in the ,united ,states4 7b7 ,treatment ,a payment stablecoin that is not issued by a permitted payment stablecoin issuer shall not be 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 7c7 ,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 shall refer the matter to the ,attorney ,general4 #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 outstanding payment stablecoins of the permitted payment stablecoin issuer on an at least a #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 and agencies 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 repurchase agreements with the permitted payment stablecoin issuer acting as a seller of securities and with an overnight maturity that are backed by ,treasury bills with a maturity of #ic days or less2 7v7 reverse repurchase agreements with the permitted payment stablecoin issuer acting as a purchaser of securities and with an overnight maturity that are collateralized by ,treasury 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 house 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;a77 that operates as a money market fund in compliance with rule #b;a-#g issued under that ,act 7or any successor rule7 and that are invested solely in underlying assets described in clauses 7i7 through 7iv7 of subparagraph 7,a72 7vii7 any other similarly liquid 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 clauses 7i7 through 7vii7 in tokenized form1 provided that such reserves comply with all applicable laws and regulations2 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 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 use or receipt of 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 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 consistent with section #ah1 issue-- 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 which 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 regulations implementing the liquidity standard under clause 7i72 7iii7 reserve asset diversification 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 which are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers2 and 7iv7 appropriate operational1 compliance1 and information technology risk management standards1 including ,bank ,secrecy ,act and sanctions compliance1 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 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 the primary ,federal 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 the supervisory1 regulatory1 or enforcement authority of a ,federal banking agency to further the safe and sound operation of an institution for which the ,federal banking agency is the appropriate ,federal banking agency 7as defined under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac774 7,c7 ,applicability of existing capital standards 7i7 ,definitions ,in this subparagraph-- 7,i7 appropriate ,federal banking agency has the meaning given that term in section #c7q7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7q772 and 7,,ii7 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 issuer 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 promulgated pursuant to paragraph 7#a77;,a77i74 7iv7 ,modifications ,not later than the earlier of the rulemaking deadline under section #ah or the date 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 ,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 including-- 7i7 maintenance of an effective anti-money laundering and economic sanctions compliance program1 which shall include appropriate risk assessments1 verification of sanctions lists and designation of an officer to supervise the programs2 7ii7 retention of appropriate records of payment stablecoin transactions2 7iii7 monitoring and reporting suspicious activity2 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 transactions and appropriate enhanced due diligence4 7,b7 ,rulemaking ,the ,financial ,crimes ,enforcement ,network shall adopt rules1 tailored to the size and complexity of the permitted payment stablecoin issuer1 to implement subparagraph 7,a74 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 digital asset of the foreign person upon issue of the digital asset2 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 7i7 ,in general 7,i7 ,permitted payment stablecoin issuers ,a permitted payment stablecoin issuer may issue payment stablecoins only if the issuer has the technological capability to comply and will comply with the terms of any lawful order4 7,,ii7 ,foreign payment stablecoins ,a foreign payment stablecoin that is not licensed under this ,act may not be publicly offered1 sold1 or otherwise made available for trading in the ,united ,states unless the payment stablecoin issuer has the technological capability to comply and will comply with the terms of any lawful order4 7ii7 ,lawful order defined ,in this paragraph1 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,i7 requires the permitted payment stablecoin issuer to seize1 freeze1 burn1 or prevent the transfer of payment stablecoins issued by the permitted payment stablecoin issuer2 7,,ii7 specifies the digital assets or accounts subject to blocking with reasonable particularity2 and 7,,iii7 is subject to judicial or administrative review or appeal as provided by law4 7,c7 ,report required ,not later than #a year after the date of enactment of this ,act1 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 report on the coordination with permitted payment stablecoin issuers required under subparagraph 7,a74 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 prevent a permitted payment stablecoin issuer from engaging in non-payment stablecoin activities that are allowed by the primary ,federal payment stablecoin regulator or the ,state payment stablecoin regulator1 as applicable4 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 subparagraph1 and1 in consultation with the ,comptroller and the ,corporation1 may by regulation or order1 permit such exceptions to clause 7i7 as the ,board considers will not be contrary to the purpose of this ,act4 7#i7 ,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 primary ,federal payment stablecoin regulators and ,state payment stablecoin regulators1 to issue such regulations and orders as necessary to ensure financial stability and implement this subsection4 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 regulators and consistent with section #ah of the ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe1 issue such regulations and orders as necessary to ensure financial stability and implement section #d7;a7 of that ,act4 4 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 sections #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 shall3 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 7b7 ,state-,level regulatory regimes 7#a7 ,option for ,state-level regulatory regime ,notwithstanding the ,federal regulatory framework established under subsection 7a71 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 subsection 7a74 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 ,secretary of the ,treasury 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 ,secretary of the ,treasury1 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 each year1 a ,state payment stablecoin regulator shall submit to the ,secretary of the ,treasury an additional certification that confirms the accuracy of initial certification submitted under subparagraph 7,a74 7#e7 ,not substantially similar 7,a7 ,in general ,if a ,state payment stablecoin regulator determines that the criteria established under paragraph 7#b7 are not met and the ,state payment stablecoin regulator does not submit a certification under paragraph 7#d71 then a permitted payment stablecoin issuer operating under this subsection shall be subject to the ,federal regulatory framework as described in subsection 7c71 notwithstanding the total issuance threshold therein4 7,b7 ,treasury review ,not later than #cj days after the date of receipt of a certification under paragraph 7#d71 the ,secretary may reject the certification if the ,secretary determines that the ,state-level regulatory regime is not substantially similar to the ,federal regulatory framework under subsection 7a71 and the permitted payment stablecoin issuer shall be subject to the ,federal regulatory framework as described in subsection 7c71 notwithstanding the total issuance threshold therein4 7,c7 ,appellate review ,a ,state payment stablecoin regulator may challenge the determination of the ,secretary of the ,treasury under this paragraph in the ,united ,states ,court of ,appeals for the ,district of ,columbia ,circuit4 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 7c7 ,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 ,state payment stablecoin regulator of the ,state qualified payment stablecoin issuer2 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 laws and rules applicable to1 and the supervisory framework of1 the ,state qualified payment stablecoin issuer with respect to payment stablecoins and digital assets4 7,c7 ,rule of construction ,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 along 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 7d7 ,misrepresentation of insured status2 marketing 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 insurance4 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 ,it shall be unlawful to market a digital asset in the ,united ,states as a payment stablecoin unless the digital asset is issued pursuant to this ,act4 7e7 ,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 years2 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 7f7 ,rulemaking 7#a7 ,in general ,consistent with section #ah1 the primary ,federal payment stablecoin regulators and ,state payment stablecoin regulators shall issue such regulations as may be necessary to establish a payment stablecoin regulatory framework necessary to administer and carry out the requirements of this 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 #e4 ,approval of subsidiaries of insured depository institutions and ,federal qualified nonbank payment stablecoin issuers 7a7 ,application 7#a7 ,in general ,each primary ,federal payment stablecoin regulator shall receive1 review1 and consider for approval applications from any insured depository institution that seeks to issue payment stablecoins through a subsidiary and any nonbank entity that seeks to issue payment stablecoins as a ,federal qualified nonbank payment stablecoin issuer4 ,each primary ,federal payment stablecoin regulator shall 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 #ah-- 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 under this ,act4 7#c7 ,mandatory approval process ,the primary ,federal payment stablecoin regulator shall1 upon receipt of a substantially complete application1 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 ,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 criteria under 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 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 must 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 ,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 7ii7 ,issuance 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 application4 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 argument4 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 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 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 primary ,federal payment stablecoin regulators shall annually report to ,congress on the applications under subsection 7a7 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 ,rulemaking ,consistent with section #ah1 the primary ,federal payment stablecoin regulators shall 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 #f4 ,supervision and enforcement with respect to subsidiaries of insured depository institutions and ,comptroller-regulated entities 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 its 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 and 7,c7 compliance by the permitted payment stablecoin issuer 7and any subsidiary thereof7 with this ,act4 7#c7 ,examinations ,the 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 within 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 the 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 those 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 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-- 7,a7 is recklessly violating or has recklessly violated this ,act or any regulation or order issued under this ,act2 or 7,b7 is recklessly violating or has recklessly 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 of a permitted payment stablecoin issuer that is not a ,state qualified payment stablecoin issuer 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 their position or office or prohibit further participation in the affairs of the permitted payment stablecoin issuer or all such permitted payment stablecoin issuers by such 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 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 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 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 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 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 ,notwithstanding anything in this subsection to the contrary1 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 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 #ah1 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 usual and exigent circumstances4 ,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 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 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 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 #ah1 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 by a ,state qualified payment stablecoin issuer that is a nonbank entity of any activity 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 circumstances4 ,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 that is a nonbank entity 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 ,comptroller-regulated entity1 or any institution-affiliated party 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 ,effect on ,state law 7#a7 ,host ,state ,law ,the laws of a host ,state1 including generally applicable 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 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 ,state qualified payment stablecoin issuer shall govern the activities of the permitted payment stablecoin issuer conducted in the host ,state4 7#c7 ,applicability ,the laws applicable 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 #h4 ,anti-money laundering protections 7a7 ,definitions ,in this subsection3 7#a7 ,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 or for customers or users in the ,united ,states1 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 related to a digital asset issuance2 and 7,b7 does not include-- 7i7 a distributed ledger protocol or a person solely developing such a protocol2 or 7ii7 a person solely validating transactions or operating a distributed ledger node4 7#b7 ,offering ,the term offering means making available for purchase1 sale1 or exchange4 7#c7 ,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#d7 ,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 permitted payment stablecoin issuer to seize1 freeze1 burn1 or prevent the transfer of payment stablecoins issued by the permitted payment stablecoin issuer2 7,b7 specifies the digital assets or accounts subject to blocking with reasonable particularity2 and 7,c7 is subject to judicial or administrative review or appeal as provided by law4 7b7 ,treasury authority ,to designate noncompliant issuers ,not later than #cj days after the ,department of the ,treasury has identified the failure of a foreign issuer of any payment stablecoins trading in the ,united ,states that is not a permitted payment stablecoin issuer to comply with the terms of any lawful order1 the ,secretary of the ,treasury1 in coordination with relevant ,federal agencies1 shall designate the foreign issuer as noncompliant and notify the foreign issuer in writing of the designation4 7c7 ,publication of designation2 prohibition on secondary trading 7#a7 ,in general ,if a foreign issuer described in subsection 7b7 does not come into compliance with the lawful order within #cj days of receiving the written notice described in that subsection1 the ,secretary of the ,treasury shall-- 7,a7 publish the determination of noncompliance in the ,federal ,register1 including a statement on the failure of the foreign 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 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 ,waivers and extensions ,with respect to the prohibition on facilitation of secondary trading described in paragraph 7#a71 the ,secretary of the ,treasury may issue waivers and time extensions to digital asset service providers on a case by case basis4 7#d7 ,civil monetary penalties 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 issuer of payment stablecoin 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 ,united ,states ,district ,court to bar the foreign issuer from engaging in financial transactions in the ,united ,states or with ,united ,states persons4 7d7 ,appeal ,a determination of noncompliance under subsection 7b7 is subject to judicial review in the ,united ,states ,court of ,appeals for the ,district of ,columbia ,circuit4 7e7 ,waiver1 licensing authority1 and exceptions 7#a7 ,in general ,the ,secretary of the ,treasury may offer a waiver1 general license1 or specific license to any ,united ,states persons engaging in secondary trading described in subsection 7c7 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 issuer of the payment stablecoin is taking tangible steps to remedy the failure to comply with the lawful order that resulted in the noncompliance determination under subsection 7b74 7#b7 ,national security waiver ,the ,president may waive the application of the secondary trading restrictions under subsection 7c7 if the ,president determines that the waiver is in the national security interest of the ,united ,states4 7#c7 ,exceptions for intelligence and law enforcement activities ,this ,act shall not apply 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 seq47 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 ,chairmen 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 ,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 of 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 #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 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 ,customer property 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 customer and is not the property of such person2 and 7#b7 take such steps as are appropriate to protect the payment stablecoins1 private keys1 cash1 and other property of a customer from the claims of creditors of the person4 7c7 ,commingling prohibited 7#a7 ,in general ,payment stablecoins1 cash1 and other property of a customer shall be separately accounted for by a person described in subsection 7a7 and shall be segregated from and 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 a ,state chartered depository institution1 an insured depository institution1 national bank1 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 or 7,c7 in accordance with such terms and conditions as a primary ,federal payment stablecoin regulator 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 primary ,federal payment stablecoin regulator 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 ,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 #aj4 ,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 ,code4 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 ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe4 4 7c7 ,automatic stay ,section #cfb of title #aa1 ,united ,states ,code 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 debtor1 from payment stablecoin reserves required to be maintained under section #d of the ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe4 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 debtor 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 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 debtor1 any remaining claim of a person holding a payment stablecoin issued by the debtor 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 ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe would have required additional reserves to be maintained by the debtor 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 flush text 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 ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe4 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 ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe7 shall raise and shall appear and be heard on 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 #aa4 ,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 #e 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 #ab4 ,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 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 payment stablecoin defined ,in this section1 the term endogenously collateralized payment 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 #ac4 ,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 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 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 ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #ecbb74 #ad4 ,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 and issuing digital assets that represent deposits2 7#b7 utilizing a distributed ledger for the books and records of the entity and to affect intrabank transfers2 and 7#c7 providing custodial services for payment stablecoins1 private keys of payment stablecoins1 or reserves backing payment stablecoins4 7b7 ,regulatory review ,the primary ,federal payment stablecoin regulators shall review all existing guidance and regulations1 and if necessary1 amend or promulgate new regulations and guidance1 to clarify that regulated entities can engage in the payment stablecoin activities contemplated in1 and in accordance with1 this ,act4 7c7 ,treatment of custody activities ,the appropriate ,federal banking 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 institution-affiliated party thereof-- 7#a7 to include assets held in custody that are not owned by the entity as a liability on the financial statement or balance sheet of the entity1 including payment stablecoin custody or safekeeping activities2 7#b7 to hold regulatory capital against assets1 including reserves backing such assets described in section #d7;a77#a77;,a71 in custody or safekeeping1 except as necessary to mitigate against operational risks inherent with the custody or safekeeping services1 as determined by-- 7,a7 the appropriate ,federal banking agency2 7,b7 the ,national ,credit ,union ,administration 7in the case of a credit union72 7,c7 a ,state bank supervisor 7as defined 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 in any amount greater than the expense recognized in the income statement or the consideration received as a result of the corresponding obligation4 7d7 ,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 #ae4 ,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 ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe44 7b7 ,investment ,company ,act of #aidj ,the ,investment ,company ,act of #aidj is amended-- 7#a7 in section #b7;a77#cf7 7#ae ,u4,s4,c4 #hj;a-#b7;a77#cf777ae ,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 ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe42 and 7#b7 in section #c7;c77#c7 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 ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe2 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 ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe44 7d7 ,securities ,exchange act of #aicd ,section #c7;a77#aj7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a77#aj77 is amended by adding at the end the following3 ,the term security does not include a payment stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined in section #b of the ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe44 7e7 ,securities ,investor ,protection ,act of #aigj ,section #af7ad7 of the ,securities ,investor ,protection ,act of #aigj 7#ae ,u4,s4,c4 #ghlll7#ad77 is amended by adding at the end the following3 ,the term security does not include a payment stablecoin issued by a permitted payment stablecoin issuer1 as such terms are defined in section #b of the ,guiding and ,establishing ,national ,innovation for ,u4,s4 ,stablecoins ,act of #bjbe44 7f7 ,commodity ,exchange ,act ,section #a;a of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a;a7 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 ,guiding and ,establishing ,national ,innovation for ,u4,s4 payment stablecoins ,act of #bjbe4 #af4 ,reciprocity for payment stablecoins issued in overseas jurisdictions ,the ,secretary of the ,treasury shall create and implement reciprocal arrangements or other bilateral agreements between the ,united ,states and jurisdictions with substantially similar payment stablecoin regulatory regimes to the requirements under this ,act1 including reserve requirements1 supervision1 anti-money laundering and counter-terrorism features1 sanctions compliance standards1 liquidity requirements1 and risk management standards1 to facilitate international transactions and interoperability with ,united ,states dollar-denominated payment stablecoins issued overseas4 ,the ,secretary of the ,treasury shall aim to complete such arrangements not later than the date that is #b years after the date of enactment of this ,act4 #ag4 ,effective date 7a7 ,in general ,this ,act1 and the amendments made by this ,act1 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 #ah4 ,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 implement this ,act through appropriate notice and comment rulemaking1 including promulgating regulations as described in this ,act as necessary4 7b7 ,coordination ,federal payment stablecoin regulators and ,state payment stablecoin regulators should coordinate on the issuance of any regulations to implement this ,act4 7c7 ,report required ,not later than #ahj days after the date of enactment 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 rules promulgated to implement this ,act4