AN ACT TO AMEND TITLE 5 OF THE DELAWARE CODE RELATING TO STABLECOINS.
Sponsored By: Spiros Mantzavinos (Democratic)
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Bill Overview
Analyzed Economic Effects
18 provisions identified: 5 benefits, 1 costs, 12 mixed.
Reserve shortfalls trigger fee-free stablecoin liquidation
An issuer must report a reserve shortfall the same business day it knows or should know about it. New issuance stops until reserves recover, except qualifying ledger transfers that do not increase net issuance. If the shortfall is not cured within 15 consecutive business days, the issuer must begin orderly liquidation and redemption. Holders pay no redemption fees during liquidation. The Commissioner can extend the cure period for good cause or require earlier redemption when timely recovery is significantly at risk.
Stablecoin holders get stronger reserve safeguards
Permitted issuers must always hold identifiable reserves worth at least $1 for every $1 of stablecoins outstanding. Eligible reserves include cash, qualifying deposits, Treasury securities with original or remaining maturity of 93 days or less, qualifying overnight deals, restricted government money funds, and approved liquid assets. Reserves generally cannot be pledged or reused, except for allowed margin, custody, or approved liquidity purposes. Written custody agreements, separate accounting, and safeguards for sub-custodians protect covered assets from custodian creditors, including during insolvency. The Commissioner sets liquidity and concentration rules, with a safe harbor for holding no more than 40% at one institution.
Stablecoin cash-outs have deadlines and pauses
Issuers must post clear redemption procedures and normally complete requests, including for one whole coin, within two business days after customer checks. Fee changes require at least seven days' notice, and issuers cannot unilaterally limit, delay, or suspend redemptions. When 24-hour demands exceed 10% of outstanding issuance, outstanding and later requests get a seven-calendar-day deadline; the Commissioner must be notified within 24 hours. The Commissioner can restore ordinary timing, change emergency deadlines, or pause redemptions during severe market, liquidity, or cyber disruptions. A pause lasts at most 10 business days without a renewed necessity finding; affected holders and issuers can seek expedited court review.
Stronger enforcement against stablecoin law violations
The Commissioner can stop violations, suspend or revoke licenses, seek court orders, and assess civil penalties. Daily maximums per violation are $100,000 for nonknowing, nonreckless conduct; $500,000 for knowing or reckless conduct; and $1 million for patterns or material holder harm. Knowing unlicensed activity, material application misrepresentations, and false required certifications are class F felonies. License penalties and fines require notice and a hearing opportunity; emergency cease-and-desist orders require a prompt hearing afterward. Existing consumer, securities, and federal laws remain, and issuer violations also trigger Attorney General consumer-fraud enforcement, but no new private right to sue is created.
Capital and safety rules for issuers
New stablecoin issuers must hold at least $5 million in fixed capital. Ongoing capital must cover at least 12 months of projected operating expenses, with additional buffers based on risk. The Commissioner must set risk-based rules covering reserves, liquidity, cybersecurity, private keys, business continuity, outsourcing, affiliates, and growth. Issuers must file updated shutdown plans annually for insolvency or surrendering their license. Directors and executives cannot have convictions or guilty or no-contest pleas involving fraud, dishonesty, breach of trust, money laundering, or financial crimes.
Federal transition required for large issuers
A Delaware state-qualified issuer exceeding $10 billion outstanding during any consecutive 12-month period must notify the Commissioner within 10 business days. Within 360 days after crossing that threshold, it must obtain the required federal approval or reduce outstanding issuance below $10 billion. Its Delaware license stays active during the transition as long as it follows the chapter.
State oversight for Delaware stablecoin businesses
The law covers stablecoin issuance, digital asset services, and custody for Delaware residents, even when providers operate elsewhere. Residents include people or registered agents domiciled in Delaware, businesses headquartered there, and people present over 183 of the previous 365 days. Covered businesses need issuer, service-provider, or combined licenses unless exempt; household users do not need licenses. The State Bank Commissioner oversees these businesses and must issue rules within 18 months, aligned with federal stablecoin standards. Cities and counties cannot add local licensing or different rules unless the law allows it.
Clear warnings and fairer stablecoin sales
Permitted stablecoins are not federally insured deposits, and issuers must prominently tell holders this. Issuers cannot claim government insurance or imply that the United States or a federal agency issues, guarantees, or backs their coins. They also cannot require customers to buy another product or service to receive a stablecoin. Meeting the payment-stablecoin definition alone does not make a coin a Delaware security or deposit. Other features can still make an asset a security.
Stablecoin customers get stronger privacy safeguards
Licensed issuers must maintain a written program protecting customers' private personal information. Sharing with unrelated companies requires informed consent unless needed for a requested service with safeguards or required by law. Suspected unauthorized access or acquisition requires investigation and steps to limit harm. Issuers must notify the Commissioner within 72 hours of awareness and affected customers as soon as reasonably practicable. Law enforcement can delay customer notice through a written finding that notice would interfere with a criminal investigation.
Licensing exemptions for personal stablecoin use
Lawful direct transfers between individuals acting for themselves, without an intermediary, and personal self-custody wallet use are exempt. Transfers between your own domestic and foreign accounts at the same parent company are also exempt. Issuance for Delaware residents totaling no more than $5,000 annually is licensing-exempt; the Commissioner may adjust this threshold at least every three years. Specified federal issuers, approved bank subsidiaries, authorized money transmitters, escrow services, and software providers without unilateral asset control also receive licensing exemptions. Ledger developers, validators, and liquidity-pool participants are not service providers solely for those activities, but other provider work remains covered.
Stablecoin holders generally cannot earn interest
Permitted issuers generally cannot pay stablecoin holders interest or yield. Issuers can keep returns earned on reserve assets. If federal law, rules, orders, or guidance allow federally licensed issuers to pay holders, state-licensed issuers can do so on the same terms.
Stablecoin customer checks and transfer controls
Delaware-licensed issuers must maintain written programs against money laundering and terrorist financing and follow applicable federal banking-secrecy rules. Programs must include customer identification, due diligence, records, suspicious-activity reports, staff training, independent testing, and annual certification. Issuers must screen for sanctions and maintain the ability to seize, freeze, destroy, or block transfers of coins. They must carry out lawful court or Delaware or federal government orders within the time those orders require.
Federal issuers can switch Delaware oversight
Federal issuers with no more than $10 billion outstanding can seek Delaware qualification with compliant reserves and required legal standing. They must notify their federal regulator and provide approval, no objection, or satisfactory evidence that surrender procedures have begun. The Commissioner must decide a complete application within 90 days, with a possible 45-day good-cause extension and a reduced application fee. A conditional license activates only after federal status ends and is automatically revoked if the exit remains unfinished after 365 days. Until conversion, exclusive federal oversight continues, with reserve compliance, material-change notices, and advance notice of major operating changes.
Federal stablecoin issuers must register locally
Covered federal issuers and federally approved bank subsidiaries must register at least 30 days before starting covered Delaware activity. They must provide information, renew annually, and pay a registration fee; registration is not a Delaware license. The Commissioner tracks their presence, forwards consumer complaints to federal regulators, and can request specified supervisory information. Registration ends when a conditional Delaware license activates, and renewal is not required for periods covered by that conditional license.
License reviews and fees for providers
Applicants must provide business, ownership, financial, reserve, redemption, compliance, fingerprint, continuity, and cybersecurity information, including an independent security audit. They pay a nonrefundable application fee and reasonable investigation costs; other fees cover renewals, exams, registrations, and oversight. The Commissioner has 120 days after an application is complete, including the investigation, plus a possible 60-day good-cause extension; silence means denial. A license starts after issuance and any required security is provided. Businesses licensed in good standing under substantially similar state rules can avoid a full repeat review and need no separate Delaware company.
Stablecoin issuer buyers face advance review
Buyers seeking direct or indirect control of a covered state-licensed issuer must give written notice at least 60 days before acquisition. Ownership of at least 10% of voting shares creates a presumption of control that buyers can challenge. The Commissioner can approve, add conditions, or reject a deal for buyer fitness or material safety risks. A deal can proceed unless rejected within 60 days after complete notice, with a possible 30-day extension; Federal Reserve-controlled acquisitions and federal issuers are excluded. Skipping notice can trigger emergency license suspension and a requirement to supply information within 15 business days.
Stablecoin issuers face reports and audits
By noon on each month's last day, issuers must publish prior-month coin totals, reserve amounts, composition, average maturity, custody locations, and material changes. A registered accounting firm must examine the monthly information, and the chief executive and chief financial officers must certify accuracy. Issuers above $50 billion outstanding must submit annual audited financial statements using standard accounting rules within 90 days after fiscal year-end. Issuers above $1 billion outstanding receive full regulatory exams at least annually; the Commissioner can examine others as needed. Examined issuers pay reasonable examination costs.
Transition time for stablecoin business licenses
The law takes effect immediately, but businesses receive time before licensing is required. The licensing deadline is the earlier of 18 months after the chapter takes effect or 120 days after required regulations are issued. Existing money transmitter licensees doing covered digital asset work receive a safe harbor lasting at least 18 months after those regulations take effect. Eligible applicants can seek interim permission before the licensing deadline.
Sponsors & Cosponsors
Sponsor
Spiros Mantzavinos
Democratic • Senate
Cosponsors
William Bush
Democratic • House
Brian Pettyjohn
Republican • Senate
Cyndie Romer
Democratic • House
Jeffrey N. Spiegelman
Republican • House
Roll Call Votes
No roll call votes available for this bill.
Actions Timeline
SS 2 for SB 19 - Signed by Governor
7/6/2026GovernorSS 2 for SB 19 - Passed By Senate. Votes: 21 YES
6/24/2026SenateSS 2 for SB 19 - Passed By House. Votes: 36 YES 5 ABSENT
6/18/2026HouseSS 2 for SB 19 - - Passed In House by Voice Vote
6/18/2026HouseSS 2 for SB 19 - - Stricken in House
6/18/2026HouseSubstituted in Senate by SS 2 for SB 19
6/18/2026SenateSS 2 for SB 19 - Reported Out of Committee (Appropriations) in House with 6 On Its Merits
6/16/2026HouseSS 2 for SB 19 - Reported Out of Committee (Appropriations) in House with 6 On Its Merits
6/16/2026HouseSubstituted in Senate by SS 2 for SB 19
6/4/2026SenateSS 2 for SB 19 - Assigned to Appropriations Committee in House
5/5/2026HouseSS 2 for SB 19 - Reported Out of Committee (Economic Development/Banking/Insurance & Commerce) in House with 9 On Its Merits
5/5/2026HouseSS 2 for SB 19 - Assigned to Economic Development/Banking/Insurance & Commerce Committee in House
4/30/2026HouseSS 2 for SB 19 - Passed By Senate. Votes: 20 YES 1 NOT VOTING
4/23/2026SenateSS 2 for SB 19 - Reported Out of Committee (Finance) in Senate with 1 Favorable, 3 On Its Merits
4/22/2026SenateSubstituted in Senate by SS 2 for SB 19
4/21/2026SenateSS 1 for SB 19 - Assigned to Finance Committee in Senate
4/15/2026SenateSS 1 for SB 19 - Reported Out of Committee (Banking, Business, Insurance & Technology) in Senate with 2 Favorable, 5 On Its Merits
4/15/2026SenateSubstituted in Senate by SS 1 for SB 19
4/13/2026SenateIntroduced and Assigned to Banking, Business, Insurance & Technology Committee in Senate
3/23/2026Senate
Bill Text
Current
3/23/2026
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