§5903 — Title 12 Banks and Banking | U.S. Code

Summary

Requires every payment stablecoin to be backed 1-to-1 by identifiable reserves. Those reserves must be cash or very safe, very short-term government assets (including Treasury bills with 93 days or less to maturity), bank deposits, certain money market funds, overnight repurchase or reverse-repurchase arrangements, or similar liquid government assets (including tokenized versions when allowed). Reserves may not be pledged or reused except for limited purposes like margin for permitted repos, custodial services, or to create liquidity for redemptions; certain repurchase agreements must be cleared or approved by a regulator. Issuers must post each month the total outstanding coins and the makeup and custody location of reserves on their website. They must publicly state a clear redemption policy and all fees, and give at least 7 days’ notice before changing fees. The monthly reserve report must be reviewed by a registered public accounting firm, and the issuer’s CEO and CFO must certify its accuracy to the appropriate regulator; knowingly false certification carries criminal penalties under 18 U.S.C. 1350(c). Regulators will set capital, liquidity, reserve-diversification, and risk-management rules tailored to this business. Issuers are treated as financial institutions under the Bank Secrecy Act and must run anti-money-laundering, sanctions, customer ID, recordkeeping, and suspicious-activity systems; the Treasury will issue size- and complexity-based rules. Issuers must have the tech to comply with lawful blocking of sanctioned foreign persons, and the Attorney General and Treasury must report on coordination not later than 1 year after July 18, 2025. Issuers may only do core stablecoin activities (issue, redeem, manage reserves, custody, and directly supporting services) and may not force customers to buy other products. Names or marketing must not imply U.S. Government backing, legal tender status, or federal deposit/share insurance (using “USD” is allowed). Issuers may not pay holders interest or yield just for holding stablecoins. Large-issuer rules: over $50,000,000,000 outstanding requires audited annual financials and public posting; state-versus-federal rules allow state regimes for issuers under $10,000,000,000 if certified as substantially similar, and issuers that pass $10,000,000,000 must move to the federal framework within 360 days or stop issuing new coins until below that level (with limited waiver rules). Marketing a product as a payment stablecoin is illegal unless it is issued under this chapter; fines up to $500,000 per violation may apply. Anyone convicted of certain felonies may not serve as an officer or director; violating that rule can bring fines up to $1,000,000, imprisonment up to 5 years, or both.

Title 12, §5903

Banks and Banking — Source: USLM XML via OLRC

(a)(1)A permitted payment stablecoin issuer shall—

(A)maintain identifiable reserves backing the outstanding payment stablecoins of the permitted payment stablecoin issuer on an at least 1 to 1 basis, with reserves comprising—

(i)United States coins and currency (including Federal Reserve notes) or money standing to the credit of an account with a Federal Reserve Bank;

(ii)funds held as demand deposits (or other deposits that may be withdrawn upon request at any time) or insured shares at an insured depository institution (including any foreign branches or agents, including correspondent banks, of an insured depository institution), subject to limitations established by the Corporation and the National Credit Union Administration, as applicable, to address safety and soundness risks of such insured depository institution;

(iii)Treasury bills, notes, or bonds—

(I)with a remaining maturity of 93 days or less; or

(II)issued with a maturity of 93 days or less;

(iv)money received under 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 93 days or less;

(v)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 notes, bills, or bonds on an overnight basis, subject to overcollateralization in line with standard market terms, that are—

(I)tri-party;

(II)centrally cleared through a clearing agency registered with the Securities and Exchange Commission; or

(III)bilateral with a counterparty that the issuer has determined to be adequately creditworthy even in the event of severe market stress;

(vi)securities issued by an investment company registered under section 80a–8(a) of title 15, or other registered Government money market fund, and that are invested solely in underlying assets described in clauses (i) through (v);

(vii)any other similarly liquid Federal Government-issued asset approved by the primary Federal payment stablecoin regulator, in consultation with the State payment stablecoin regulator, if applicable, of the permitted payment stablecoin issuer; or

(viii)any reserve described in clause 11 So in original. (i) through (iii) or clause 1 (vi) through (vii) in tokenized form, provided that such reserves comply with all applicable laws and regulations;

(B)publicly disclose the issuer’s redemption policy, which shall—

(i)establish clear and conspicuous procedures for timely redemption of outstanding payment stablecoins, provided that any discretionary limitations on timely redemptions can only be imposed by a State qualified payment stablecoin regulator, the Corporation, the Comptroller, or the Board, consistent with section 5906 of this title; and

(ii)publicly, clearly, and conspicuously disclose in plain language all fees associated with purchasing or redeeming the payment stablecoins, provided that such fees can only be changed upon not less than 7 days’ prior notice to consumers; and

(C)publish the monthly composition of the issuer’s reserves on the website of the issuer, containing—

(i)the total number of outstanding payment stablecoins issued by the issuer; and

(ii)the amount and composition of the reserves described in subparagraph (A), including the average tenor and geographic location of custody of each category of reserve instruments.

(2)Reserves required under paragraph (1)(A) may not be pledged, rehypothecated, or reused by the permitted payment stablecoin issuer, either directly or indirectly, except for the purpose of—

(A)satisfying margin obligations in connection with investments in permitted reserves under clauses (iv) and (v) of paragraph (1)(A);

(B)satisfying obligations associated with the use, receipt, or provision of standard custodial services; or

(C)creating liquidity to meet reasonable expectations of requests to redeem payment stablecoins, such that reserves in the form of Treasury bills may be sold as purchased securities for repurchase agreements with a maturity of 93 days or less, provided that either—

(i)the repurchase agreements are cleared by a clearing agency registered with the Securities and Exchange Commission; or

(ii)the permitted payment stablecoin issuer receives the prior approval of its primary Federal payment stablecoin regulator or State payment stablecoin regulator, as applicable.

(3)(A)A permitted payment stablecoin issuer shall, each month, have the information disclosed in the previous month-end report required under paragraph (1)(D) 22 So in original. Probably should be “paragraph (1)(C)”. examined by a registered public accounting firm.

(B)Each month, 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, as applicable—

(i)the primary Federal payment stablecoin regulator of the permitted payment stablecoin issuer; or

(ii)the State payment stablecoin regulator of the permitted payment stablecoin issuer.

(C)Any person who submits a certification required under subparagraph (B) knowing that such certification is false shall be subject to the same criminal penalties as those set forth under section 1350(c) of title 18.

(4)(A)The primary Federal payment stablecoin regulators shall, or in the case of a State qualified payment stablecoin issuer, the State payment stablecoin regulator shall, consistent with section 5913 of this title, issue regulations implementing—

(i)capital requirements applicable to permitted payment stablecoin issuers that—

(I)are tailored to the business model and risk profile of permitted payment stablecoin issuers;

(II)do not exceed requirements that are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers; and

(III)in the case of the primary Federal payment stablecoin regulators, if the primary Federal payment stablecoin regulators determine that a capital buffer is necessary to ensure the ongoing operations of permitted payment stablecoin issuers, may include capital buffers that are tailored to the business model and risk profile of permitted payment stablecoin issuers;

(ii)the liquidity standard under paragraph (1)(A);

(iii)reserve asset diversification, including deposit concentration at banking institutions, and interest rate risk management standards applicable to permitted payment stablecoin issuers that—

(I)are tailored to the business model and risk profile of permitted payment stablecoin issuers; and

(II)do not exceed standards that are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers; and

(iv)appropriate operational, compliance, and information technology risk management principles-based requirements and standards, including Bank Secrecy Act and sanctions compliance standards, that—

(I)are tailored to the business model and risk profile of permitted payment stablecoin issuers; and

(II)are consistent with applicable law.

(B)Nothing in this paragraph shall be construed to limit—

(i)the authority of the primary Federal payment stablecoin regulators, in prescribing standards under this paragraph, to tailor or differentiate among issuers on an individual basis or by category, taking into consideration the capital structure, business model risk profile, complexity, financial activities (including financial activities of subsidiaries), size, and any other risk-related factors of permitted payment stablecoin issuers that a primary Federal payment stablecoin regulator determines appropriate, provided that such tailoring or differentiation occurs without respect to whether a permitted payment stablecoin issuer is regulated by a State payment stablecoin regulator; or

(ii)any supervisory, regulatory, or enforcement authority of a primary Federal payment stablecoin regulator to further the safe and sound operation of an institution for which the primary Federal payment stablecoin regulator is the appropriate regulator.

(C)(i)In this subparagraph, the term “depository institution holding company” has the meaning given that term under section 5371(a)(3) of this title.

(ii)With respect to the promulgation of rules under subparagraph (A) and clauses (iii) and (iv) of this subparagraph, section 5371 of this title shall not apply.

(iii)Any rule issued by an appropriate Federal banking agency that imposes, on a consolidated basis, a leverage capital requirement or risk-based capital requirement with respect to an insured depository institution or depository institution holding company shall provide that, for purposes of such leverage capital requirement or risk-based capital requirement, any insured depository institution or depository institution holding company that includes, on a consolidated basis, a permitted payment stablecoin issuer, shall not be required to hold, with respect to such permitted payment stablecoin issuer and its assets and operations, any amount of regulatory capital in excess of the capital that such permitted payment stablecoin issuer must maintain under the capital requirements issued pursuant to subparagraph (A)(i).

(iv)Not later than the earlier of the rulemaking deadline under section 5913 of this title or the date on which the Federal payment stablecoin regulators issue regulations to carry out this section, each appropriate Federal banking agency shall amend or otherwise modify any regulation of the appropriate Federal banking agency described in clause (iii) so that such regulation, as amended or otherwise modified, complies with clause (iii) of this subparagraph.

(5)(A)A permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the Bank Secrecy Act, and as such, shall be subject to all Federal laws applicable to a financial institution located in the United States relating to economic sanctions, prevention of money laundering, customer identification, and due diligence, including—

(i)maintenance of an effective anti-money laundering program, which shall include appropriate risk assessments and designation of an officer to supervise the program;

(ii)retention of appropriate records;

(iii)monitoring and reporting of any suspicious transaction relevant to a possible violation of law or regulation;

(iv)technical capabilities, policies, and procedures to block, freeze, and reject specific or impermissible transactions that violate Federal or State laws, rules, or regulations;

(v)maintenance of an effective customer identification program, including identification and verification of account holders with the permitted payment stablecoin issuer, high-value transactions, and appropriate enhanced due diligence; and

(vi)maintenance of an effective economic sanctions compliance program, including verification of sanctions lists, consistent with Federal law.

(B)The Secretary of the Treasury shall adopt rules, tailored to the size and complexity of permitted payment stablecoin issuers, to implement subparagraph (A).

(C)Nothing in this chapter shall restrict the authority of the Secretary of the Treasury to implement, administer, and enforce the provisions of subchapter II of chapter 53 of title 31.

(6)(A)The Secretary of the Treasury—

(i)shall, to the best of the Secretary’s ability, coordinate with a permitted payment stablecoin issuer before taking any action to block and prohibit transactions in property and interests in property of a foreign person to ensure that the permitted payment stablecoin issuer is able to effectively block a payment stablecoin of the foreign person upon issuance of the payment stablecoin; and

(ii)is not required to notify any permitted payment stablecoin issuer of any intended action described in clause (i) prior to taking such action.

(B)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 order.

(C)Not later than 1 year after July 18, 2025, the Attorney General and the Secretary of the Treasury shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report, which may include a classified annex if applicable, on the coordination with permitted payment stablecoin issuers required under subparagraph (A).

(D)Nothing in this paragraph shall be construed to alter or affect the authority of State payment stablecoin regulators with respect to the offer of foreign-issued digital assets that are issued within a foreign jurisdiction.

(7)(A)A permitted payment stablecoin issuer may only—

(i)issue payment stablecoins;

(ii)redeem payment stablecoins;

(iii)manage related reserves, including purchasing, selling, and holding reserve assets or providing custodial services for reserve assets, consistent with State and Federal law;

(iv)provide custodial or safekeeping services for payment stablecoins, required reserves, or private keys of payment stablecoins, consistent with this chapter; and

(v)undertake other activities that directly support any of the activities described in clauses (i) through (iv).

(B)Nothing in subparagraph (A) shall limit a permitted payment stablecoin issuer from engaging in payment stablecoin activities or digital asset service provider activities specified by this chapter, and activities incidental thereto, that are authorized by the primary Federal payment stablecoin regulator or the State payment stablecoin regulator, as applicable, consistent with all other Federal and State laws, provided that the claims of payment stablecoin holders rank senior to any potential claims of non-stablecoin creditors with respect to the reserve assets, consistent with section 11.33 See References in Text note below.

(8)(A)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 issuer, or any of its subsidiaries, or agree to not obtain an additional product or service from a competitor.

(B)The Board may issue such regulations as are necessary to carry out this paragraph, and, in consultation with other relevant primary Federal payment stablecoin regulators, may by regulation or order, permit such exceptions to subparagraph (A) as the Board considers will not be contrary to the purpose of this chapter.

(9)(A)A permitted payment stablecoin issuer may not—

(i)use any combination of terms relating to the United States Government, including “United States”, “United States Government”, and “USG” in the name of a payment stablecoin; or

(ii)market a payment stablecoin in such a way that a reasonable person would perceive the payment stablecoin to be—

(I)legal tender, as described in section 5103 of title 31;

(II)issued by the United States; or

(III)guaranteed or approved by the Government of the United States.

(B)Abbreviations directly relating to the currency to which a payment stablecoin is pegged, such as “USD”, are not subject to the prohibitions in subparagraph (A).

(10)(A)(i)A permitted payment stablecoin issuer with more than $50,000,000,000 in consolidated total outstanding issuance, that is not subject to the reporting requirements under section 78m(a) or 78o(d) of title 15, shall prepare, in accordance with generally accepted accounting principles, an annual financial statement, which shall include the disclosure of any related party transactions, as defined by such generally accepted accounting principles.

(ii)A registered public accounting firm shall perform an audit of the annual financial statements described in clause (i).

(iii)An audit described in clause (ii) shall be conducted in accordance with all applicable auditing standards established by the Public Company Accounting Oversight Board, including those relating to auditor independence, internal controls, and related party transactions.

(iv)Nothing in this subparagraph shall be construed to limit, alter, or expand the jurisdiction of the Public Company Accounting Oversight Board over permitted payment stablecoin issuers or registered public accounting firms.

(B)Each permitted payment stablecoin issuer required to prepare an audited annual financial statement under subparagraph (A) shall—

(i)make such audited financial statements publicly available on the website of the permitted payment stablecoin issuer; and

(ii)submit such audited financial statements annually to their primary Federal payment stablecoin regulator.

(C)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 fraud, material misstatements, and other financial misrepresentations that could mislead permitted payment stablecoin holders.

(11)No permitted payment stablecoin issuer or foreign payment stablecoin issuer shall pay the holder of any payment stablecoin any form of interest or yield (whether in cash, tokens, or other consideration) solely in connection with the holding, use, or retention of such payment stablecoin.

(12)(A)In this paragraph:

(i)The term “financial activities”—

(I)has the meaning given that term in section 1843(k) of this title; and

(II)for the avoidance of doubt, includes those activities described in subparagraphs (A) and (B) of section 5901(7) of this title and section 5903(a)(7)(A) of this title.

(ii)The term “public company” means an issuer that is required to file reports under section 78m(a) or 78o(d) of title 15.

(B)(i)A public company that is not predominantly engaged in 1 or more financial activities, and its wholly or majority owned subsidiaries or affiliates, may not issue a payment stablecoin unless the public company obtains a unanimous vote of the Stablecoin Certification Review Committee finding that—

(I)it will not pose a material risk to the safety and soundness of the United States banking system, the financial stability of the United States, or the Deposit Insurance Fund;

(II)the public company will comply with data use limitations providing that, unless the public company receives consent from the consumer, nonpublic personal information obtained from stablecoin transaction data may not be—

(aa)used to target, personalize, or rank advertising or other content;

(bb)sold to any third party; or

(cc)shared with non-affiliates; and

(III)the public company and the affiliates of the public company will comply with the tying prohibitions under paragraph (8).

(ii)The prohibition under clause (i) against the sharing of consumer information shall not apply to sharing of such information—

(I)to comply with Federal, State, or local laws, rules, and other applicable legal requirements;

(II)to comply with a properly authorized civil, criminal, or regulatory investigation, subpoena, or summons by a Federal, State, or local authority; or

(III)to respond to judicial process or a government regulatory authority having jurisdiction over the public company.

(C)(i)Any company not domiciled in the United States or its Territories that is not predominantly engaged in 1 or more financial activities, may not issue a payment stablecoin unless the public company obtains a unanimous vote of the Stablecoin Certification Review Committee finding that—

(I)it will not pose a material risk to the safety and soundness of the United States banking system, the financial stability of the United States, or the Deposit Insurance Fund;

(aa)used to target, personalize, or rank advertising or other content;

(bb)sold to any third party; or

(cc)shared with non-affiliates; except 1

(III)the public company and the affiliates of the public company will comply with the tying prohibitions under paragraph (8).

(ii)The prohibition under clause (i) against the sharing of consumer information shall not apply to sharing of such information—

(I)to comply with Federal, State, or local laws, rules, and other applicable legal requirements;

(II)to comply with a properly authorized civil, criminal, or regulatory investigation, subpoena, or summons by a Federal, State, or local authority; or

(III)to respond to judicial process or a government regulatory authority having jurisdiction over the public company.

(D)Not later than 1 year after July 18, 2025, the Stablecoin Certification Review Committee shall issue an interpretive rule clarifying the application of this paragraph.

(13)Nothing in this chapter shall be construed as expanding or contracting legal eligibility to receive services available from a Federal Reserve bank or to make deposits with a Federal Reserve bank, in each case pursuant to the Federal Reserve Act [12 U.S.C. 221 et seq.].

(14)Compliance with this section does not alter or affect any additional requirement of a State payment stablecoin regulator that may apply relating to the offering of payment stablecoins.

(b)(1)Notwithstanding section 25b of this title, section 6 of the Home Owners’ Loan Act (12 U.S.C. 1465), or any applicable State law relating to licensing and supervision, a Federal qualified payment stablecoin issuer approved by the Comptroller pursuant to section 5904 of this title shall be licensed, regulated, examined, and supervised exclusively by the Comptroller, which shall have authority, in coordination with other relevant primary Federal payment stablecoin regulators and State payment stablecoin regulators, to issue such regulations and orders as necessary to ensure financial stability and implement subsection (a).

(2)

(c)(1)Notwithstanding the Federal regulatory framework established under this chapter, a State qualified payment stablecoin issuer with a consolidated total outstanding issuance of not more than $10,000,000,000 may opt for regulation under a State-level regulatory regime, provided that the State-level regulatory regime is substantially similar to the Federal regulatory framework under this chapter.

(2)The Secretary of the Treasury shall, through notice and comment rulemaking, establish broad-based principles for determining whether a State-level regulatory regime is substantially similar to the Federal regulatory framework under this chapter.

(3)State payment stablecoin regulators shall review State-level regulatory regimes according to the principles established by the Secretary of the Treasury under paragraph (2) and for the purposes of establishing any necessary cooperative agreements to implement section 5906(f) of this title.

(4)(A)Subject to subparagraph (B), not later than 1 year after the effective date of this chapter, a State payment stablecoin regulator shall submit to the Stablecoin Certification Review Committee an initial certification that the State-level regulatory regime meets the criteria for substantial similarity established pursuant to paragraph (2).

(B)The initial certification required under subparagraph (A) shall contain, in a form prescribed by the Stablecoin Certification Review Committee, an attestation that the State-level regulatory regime meets the criteria for substantial similarity established pursuant to paragraph (2).

(C)Not later than a date to be determined by the Secretary of the Treasury each year, a State payment stablecoin regulator shall submit to the Stablecoin Certification Review Committee an additional certification that confirms the accuracy of the initial certification submitted under subparagraph (A).

(5)(A)Not later than 30 days after the date on which a State payment stablecoin regulator submits an initial certification or a recertification under paragraph (4), the Stablecoin Certification Review Committee shall—

(i)approve such certification if the Committee unanimously determines that the State-level regulatory regime meets or exceeds the standards and requirements described in subsection (a); or

(ii)deny such certification and provide the State payment stablecoin regulator with a written explanation of the denial, describing the reasoned basis for the denial with sufficient detail to enable the State payment stablecoin regulator and State-level regulatory regime to make any changes necessary to meet or exceed the standards and requirements described in subsection (a).

(B)With respect to any recertification certification 1 submitted by a State payment stablecoin regulator under paragraph (4), the Stablecoin Certification Review Committee shall only deny the recertification if—

(i)the State-level regulatory regime has materially changed from the prior certification or there has been a significant change in circumstances; and

(ii)the material change in the regime or significant change in circumstances described in clause (i) is such that the State-level regulatory regime will not promote the safe and sound operation of State qualified payment stablecoin issuers under its supervision.

(C)(i)With respect to a denial described under subparagraph (A) or (B), the Stablecoin Certification Review Committee shall provide the State payment stablecoin regulator with not less than 180 days from the date on which the State payment stablecoin regulator is notified of such denial to—

(I)make such changes as may be necessary to ensure the State-level regulatory regime meets or exceeds the standards described in subsection (a); and

(II)resubmit the initial certification or recertification.

(ii)If, after a State payment stablecoin regulator resubmits an initial certification or recertification under clause (i), the Stablecoin Certification Review Committee again determines that the initial certification or recertification shall result in a denial, the Stablecoin Certification Review Committee shall, not later than 30 days after such determination, provide the State payment stablecoin regulator with a written explanation for the determination.

(D)A State payment stablecoin regulator in receipt of a denial under subparagraph (C)(ii) may appeal the denial to the United States Court of Appeals for the District of Columbia Circuit.

(E)A State payment stablecoin regulator in receipt of a denial under this paragraph shall not be prohibited from resubmitting a new certification under paragraph (4).

(6)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 (4).

(7)The Stablecoin Certification Review Committee shall take all necessary steps to endeavor that, with respect to a State that, within 180 days of July 18, 2025, has in effect a prudential regulatory regime (including regulations and guidance) for the supervision of digital assets or payment stablecoins, the certification process under this paragraph with respect to that regime occurs on an expedited timeline after the effective date of this chapter.

(d)(1)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 $10,000,000,000 shall—

(A)not later than 360 days after the payment stablecoin reaches such threshold, transition to the Federal regulatory framework of the primary Federal payment stablecoin regulator of the State chartered depository institution, which shall be administered by the State payment stablecoin regulator of the State chartered depository institution and the primary Federal payment stablecoin regulator acting jointly; or

(B)beginning on the date the payment stablecoin reaches such threshold, cease issuing new payment stablecoins until the payment stablecoin is under the $10,000,000,000 consolidated total outstanding issuance threshold.

(2)A State qualified payment stablecoin issuer not described in paragraph (1) with a payment stablecoin with a consolidated total outstanding issuance of more than $10,000,000,000 shall—

(A)not later than 360 days after the payment stablecoin reaches such threshold, transition to the Federal regulatory framework under subsection (a) administered by the relevant State payment stablecoin regulator and the Comptroller, acting in coordination; or

(3)(A)Notwithstanding paragraphs (1) and (2), 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 $10,000,000,000 to remain solely supervised by a State payment stablecoin regulator.

(B)The primary Federal payment stablecoin regulator shall consider the following exclusive criteria in determining whether to issue a waiver under this paragraph:

(i)The capital maintained by the State qualified payment stablecoin issuer.

(ii)The past operations and examination history of the State qualified payment stablecoin issuer.

(iii)The experience of the State payment stablecoin regulator in supervising payment stablecoin and digital asset activities.

(iv)The supervisory framework, including regulations and guidance, of the State qualified payment stablecoin issuer with respect to payment stablecoins and digital assets.

(C)(i)A State qualified payment stablecoin issuer subject to Federal oversight under paragraph (1) or (2) of this subsection that does not receive a waiver under this paragraph shall continue to be supervised by the State payment stablecoin regulator of the State qualified payment stablecoin issuer jointly with the primary Federal payment stablecoin regulator. Nothing in this subsection shall require the State qualified payment stablecoin issuer to convert to a Federal charter.

(ii)A State qualified payment stablecoin issuer supervised by a State payment stablecoin regulator that has established a prudential regulatory regime (including regulations and guidance) for the supervision of digital assets or payment stablecoins before the 90-day period ending on July 18, 2025, that has been certified pursuant to subsection (c) and has approved 1 or more issuers to issue payment stablecoins under the supervision of such State payment stablecoin regulator, shall be presumptively approved for a waiver under this paragraph, unless the Federal payment stablecoin regulator finds, by clear and convincing evidence, that the requirements of subparagraph (B) are not substantially met with respect to that issuer or that the issuer poses significant safety and soundness risks to the financial system of the United States.

(e)(1)Payment stablecoins shall not be backed by the full faith and credit of the United States, guaranteed by the United States Government, subject to deposit insurance by the Federal Deposit Insurance Corporation, or subject to share insurance by the National Credit Union Administration.

(2)(A)It shall be unlawful to represent that payment stablecoins are backed by the full faith and credit of the United States, guaranteed by the United States Government, or subject to Federal deposit insurance or Federal share insurance.

(B)A violation of subparagraph (A) shall be considered a violation of section 1828(a)(4) of this title or section 709 of title 18, as applicable.

(3)(A)It shall be unlawful to market a product in the United States as a payment stablecoin unless the product is issued pursuant to this chapter.

(B)Whoever knowingly and willfully participates in a violation of subparagraph (A) shall be fined by the Department of the Treasury not more than $500,000 for each such violation.

(C)For purposes of determining the number of violations for which to impose penalties under subparagraph (B), separate acts of noncompliance are a single violation when the acts are the result of—

(i)a common or substantially overlapping originating cause; or

(ii)the same statement or publication.

(D)If a Federal payment stablecoin regulator has reason to believe that any person has knowingly and willfully violated subparagraph (A), the Federal payment stablecoin regulator shall refer the matter to the Secretary of the Treasury.

(f)(1)No individual who has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud may serve as—

(A)an officer of a payment stablecoin issuer; or

(B)a director of a payment stablecoin issuer.

(2)(A)Whoever knowingly participates in a violation of paragraph (1) shall be fined not more than $1,000,000 for each such violation, imprisoned for not more than 5 years, or both.

(B)If a Federal payment stablecoin regulator has reason to believe that any person has knowingly violated paragraph (1), the Federal payment stablecoin regulator shall refer the matter to the Attorney General.

(g)A Federal savings association established under the Home Owners’ Loan Act (12 U.S.C. 1461 et seq.) that holds a reserve that satisfies the requirements of section 5903(a)(1) of this title shall not be required to satisfy the qualified thrift lender test under section 10(m) of the Home Owners’ Loan Act (12 U.S.C. 1467a(m)) with respect to such reserve assets.

(h)(1)Consistent with section 5913 of this title, the primary Federal payment stablecoin regulators shall, and State payment stablecoin regulators may, issue such regulations relating to permitted payment stablecoin issuers as may be necessary to establish a payment stablecoin regulatory framework necessary to administer and carry out the requirements of this section, including to establish conditions, and to prevent evasion thereof.

(2)All regulations issued to carry out this section shall be issued in coordination by the primary Federal payment stablecoin regulators, if not issued by a State payment stablecoin regulator.

(i)Nothing in this chapter shall be construed—

(1)as expanding the authority of the Board with respect to the services the Board can make directly available to the public; or

(2)to limit or prevent the continued application of applicable ethics statutes and regulations administered by the Office of Government Ethics, or the ethics rules of the Senate and the House of Representatives, including section 208 of title 18 and section 2635.702 and 2635.802 of title 5, Code of Federal Regulations. For the avoidance of doubt, existing Office of Government Ethics laws and the ethics rules of the Senate and the House of Representatives prohibit any member of Congress or senior executive branch official from issuing a payment stablecoin during their time in public service. For the purposes of this paragraph, an employee described in section 202 of title 18 shall be deemed an executive branch employee for purposes of complying with section 208 of that title.

Notes & Related Subsidiaries

Delayed

Effective Date

of SectionFor delayed

Effective Date

of section, see

Effective Date

note below.

Editorial Notes

References in Text

This chapter, referred to in text, was in the original “this Act”, meaning Pub. L. 119–27, July 18, 2025, 139 Stat. 419, known as the Guiding and Establishing National Innovation for U.S. Stablecoins Act and also as the GENIUS Act, which is classified principally to this chapter. For complete classification of this Act to the Code, see

Short Title

note set out under section 5901 of this title and Tables. section 11, referred to in subsec. (a)(7)(B), means section 11 of Pub. L. 119–27, which enacted section 5910 and 5911 of this title and amended section 101, 362, 507, 541, and 1109 of Title 11, Bankruptcy. The Federal Reserve Act, referred to in subsec. (a)(13), is act Dec. 23, 1913, ch. 6, 38 Stat. 251, which is classified principally to chapter 3 (§ 221 et seq.) of this title. For complete classification of this Act to the Code, see

References in Text

note set out under section 226 of this title and Tables. For the

Effective Date

of this chapter, referred to in subsec. (c)(4)(A), (7), see

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note set out under section 5901 of this title. The Home Owners’ Loan Act, referred to in subsec. (g), is act June 13, 1933, ch. 64, 48 Stat. 128, which is classified generally to chapter 12 (§ 1461 et seq.) of this title. For complete classification of this Act to the Code, see Tables. Codification Section is comprised of section 4 of Pub. L. 119–27. Subsec. (b)(2) of section 4 of Pub. L. 119–27 amended section 1 of this title.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective on the earlier of the date that is 18 months after July 18, 2025, or the date that is 120 days after the date on which the primary Federal payment stablecoin regulators issue any final

Regulations

implementing Pub. L. 119–27, see section 20 of Pub. L. 119–27, set out as a note under section 5901 of this title.

§5903 Requirements for issuing payment stablecoins

Summary

Title 12, §5903

Notes & Related Subsidiaries

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Editorial Notes

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Short Title

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Statutory Notes and Related Subsidiaries

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