Title 12 — Banks and BankingRelease 119-73
§5905 Supervision and enforcement with respect to Federal qualified payment stablecoin issuers and subsidiaries of insured depository institutions
Title 12 › Chapter CHAPTER 56— - REGULATION OF PAYMENT STABLECOINS › § 5905
Summary
Federal regulators must supervise any permitted payment stablecoin issuer that is not a State qualified payment stablecoin issuer and whose stablecoin has a consolidated total outstanding issuance of less than $10,000,000,000. The issuer must give reports if asked about its money situation, how it watches and controls risks, whether it follows this chapter, and whether it follows the Bank Secrecy Act and Treasury sanctions rules. The regulator will examine the issuer to check its operations, money and technology risks, and its risk controls. Regulators must use existing reports when they can, avoid repeating work, and ask for information on a schedule and in a format like they use for similar firms. If a regulator finds willful or reckless violations, it may stop the issuer from issuing stablecoins. If there is reason to believe a violation is happening, the regulator may order the issuer to stop bad practices or fix problems. The regulator can remove or ban people tied to the issuer for knowing violations, including certain money‑laundering rules. The regulator must follow the procedures in sections 1818 or 1786 for these actions and for court review. If a violation could cause insolvency or harm customers, the regulator may issue a temporary stop order. Civil fines may be up to $100,000 per day for certain violations (including issuing in violation of section 5902) and up to another $100,000 per day for knowing participation. The regulator can collect these penalties under sections 1818 or 1786, and its authority lasts for 6 years after a person leaves. This does not apply to State qualified payment stablecoin issuers. Nothing here changes consumer financial law rights, including 12 U.S.C. 5515 or 15 U.S.C. 41 et seq.
Full Legal Text
Title 12, §5905
Banks and Banking — Source: USLM XML via OLRC
(a)(1)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 $10,000,000,000 shall be subject to supervision by the appropriate primary Federal payment stablecoin regulator.
(2)Each permitted payment stablecoin issuer described in paragraph (1) shall, upon request, submit to the appropriate primary Federal payment stablecoin regulator a report on—
(A)the financial condition of the permitted payment stablecoin issuer;
(B)the systems of the permitted payment stablecoin issuer for monitoring and controlling financial and operating risks;
(C)compliance by the permitted payment stablecoin issuer (and any subsidiary thereof) with this chapter; and
(D)the compliance of the Federal qualified nonbank payment stablecoin issuer with the requirements of the Bank Secrecy Act and with laws authorizing the imposition of sanctions and implemented by the Secretary of the Treasury.
(3)The appropriate primary Federal payment stablecoin regulator shall examine a permitted payment stablecoin issuer described in paragraph (1) in order to assess—
(A)the nature of the operations and financial condition of the permitted payment stablecoin issuer;
(B)the financial, operational, technological, and other risks associated within the permitted payment stablecoin issuer that may pose a threat to—
(i)the safety and soundness of the permitted payment stablecoin issuer; or
(ii)the stability of the financial system of the United States; and
(C)the systems of the permitted payment stablecoin issuer for monitoring and controlling the risks described in subparagraph (B).
(4)(A)In supervising and examining a permitted payment stablecoin issuer under this subsection, a primary Federal payment stablecoin regulator shall, to the fullest extent possible, use existing reports and other supervisory information.
(B)A primary Federal payment stablecoin regulator shall, to the fullest extent possible, avoid duplication of examination activities, reporting requirements, and requests for information in carrying out this subsection with respect to a permitted payment stablecoin issuer.
(C)A primary Federal payment stablecoin regulator shall, with respect to any examination or request for the submission of a report under this subsection, only request examinations and reports at a cadence and in a format that is similar to that required for similarly situated entities regulated by the primary Federal payment stablecoin regulator.
(b)(1)The primary Federal payment stablecoin regulator of a permitted payment stablecoin issuer that is not a State qualified payment stablecoin issuer with a payment stablecoin with a consolidated total outstanding issuance of less than $10,000,000,000 may prohibit the permitted payment stablecoin issuer from issuing payment stablecoins, if the primary Federal payment stablecoin regulator determines that such permitted payment stablecoin issuer, or an institution-affiliated party of the permitted payment stablecoin issuer is willfully or recklessly violating or has willfully or recklessly violated—
(A)this chapter or any regulation or order issued under this chapter; or
(B)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 regulator.
(2)If the primary Federal payment stablecoin regulator of a permitted payment stablecoin issuer that is not a State qualified payment stablecoin issuer with a payment stablecoin with a consolidated total outstanding issuance of less than $10,000,000,000 has reasonable cause to believe that the permitted payment stablecoin issuer or any institution-affiliated party of the permitted payment stablecoin issuer is violating, has violated, or is attempting to violate this chapter, any regulation or order issued under this chapter, 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 request, the primary Federal payment stablecoin regulator may, by provisions that are mandatory or otherwise, order the permitted payment stablecoin issuer or institution-affiliated party of the permitted payment stablecoin issuer to—
(A)cease and desist from such violation or practice; or
(B)take affirmative action to correct the conditions resulting from any such violation or practice.
(3)The primary Federal payment stablecoin regulator of a permitted payment stablecoin issuer that is not a State qualified payment stablecoin issuer may remove an institution-affiliated party of the permitted payment stablecoin issuer from the position or office of that institution-affiliated party or prohibit further participation in the affairs of the permitted payment stablecoin issuer or of all such permitted payment stablecoin issuers by that institution-affiliated party, if the primary Federal payment stablecoin regulator determines that—
(A)the institution-affiliated party has knowingly committed a violation or attempted violation of this chapter or any regulation or order issued under this chapter; or
(B)the institution-affiliated party has knowingly committed a violation of any provision of subchapter II of chapter 53 of title 31.
(4)(A)If a primary Federal payment stablecoin regulator identifies a violation or attempted violation of this chapter or makes a determination under paragraph (1), (2), or (3), the primary Federal payment stablecoin regulator shall comply with the procedures set forth in subsections (b) and (e) of section 1818 of this title or subsections (e) and (g) of section 1786 of this title, as applicable.
(B)A person aggrieved by a final action under this subsection may obtain judicial review of such action exclusively as provided in section 1818(h) of this title or section 1786(j) of this title, as applicable.
(C)A primary Federal payment stablecoin regulator may, at the discretion of the regulator, follow the procedures provided in section 1818(i)(1) of this title or section 1786(k)(1) of this title, as applicable, for judicial enforcement of any effective and outstanding notice or order issued under this subsection.
(D)If a primary Federal payment stablecoin regulator determines that a violation or attempted violation of this chapter or an action with respect to which a determination was made under paragraph (1), (2), or (3), or the continuation thereof, is likely to cause insolvency or significant dissipation of assets or earnings of a permitted payment stablecoin issuer, 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 paragraph, the primary Federal payment stablecoin regulator may follow the procedures provided in section 1818(c) of this title or section 1786(f) of this title, as applicable, to issue a temporary cease and desist order.
(5)Unless otherwise specified in this chapter, the civil money penalties for violations of this chapter consist of the following:
(A)Any person that issues a United States dollar-denominated payment stablecoin in violation of section 5902 of this title, and any institution-affiliated party of such a person who knowingly participates in issuing such a payment stablecoin, shall be liable for a civil penalty of not more than $100,000 for each day during which such payment stablecoins are issued.
(B)Except as provided in subparagraph (A), a permitted payment stablecoin issuer or institution-affiliated party of such permitted payment stablecoin issuer that materially violates this chapter or any regulation or order issued under this chapter, or that materially violates any condition imposed in writing by the appropriate primary Federal payment stablecoin regulator in connection with a written agreement entered into between the permitted payment stablecoin issuer and that primary Federal payment stablecoin regulator, shall be liable for a civil penalty of not more than $100,000 for each day during which the violation continues.
(C)Except as provided in subparagraph (A), and in addition to the penalties described in subparagraph (B), 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 chapter, or any regulation or order issued under this chapter, shall be liable for a civil penalty of not more than an additional $100,000 for each day during which the violation continues.
(D)Any penalty imposed under this paragraph may be assessed and collected by the appropriate primary Federal payment stablecoin regulator pursuant to the procedures set forth in section 1818(i)(2) of this title or section 1786(k)(2) of this title, as applicable.
(E)The resignation, termination of employment or participation, or separation of an institution-affiliated party (including a separation caused by the closing of a permitted payment stablecoin issuer) shall not affect the jurisdiction and authority of a primary Federal payment stablecoin regulator to issue any notice or order and proceed under this subsection against any such party, if such notice or order is served before the end of the 6-year period beginning on the date on which such party ceased to be an institution-affiliated party with respect to such permitted payment stablecoin issuer.
(6)Notwithstanding anything in this subsection to the contrary, this subsection shall not apply to a State qualified payment stablecoin issuer.
(c)Nothing in this chapter may be construed to modify or otherwise affect any right or remedy under any Federal consumer financial law, including 12 U.S.C. 5515 and 15 U.S.C. 41 et seq.
Legislative History
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 subsecs. (a)(2)(C), (b) and (c), 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. 12 U.S.C. 5515, referred to in subsec. (c), was so in the original, but probably should have been a reference to section 1025 of the Consumer Financial Protection Act of 2010, title X of Pub. L. 111–203, which is classified to section 5515 of this title. 15 U.S.C. 41 et seq., referred to in subsec. (c), was so in the original, but probably should have been a reference to the Federal Trade Commission Act, act Sept. 26, 1914, ch. 311, which is classified generally to subchapter I (§ 41 et seq.) of chapter 2 of Title 15, Commerce and Trade.
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.
Reference
Citations & Metadata
Citation
12 U.S.C. § 5905
Title 12 — Banks and Banking
Last Updated
Apr 6, 2026
Release point: 119-73