DelawareSS 2 for SB 19153rd General Assembly (2024–2026)SenateWALLET

AN ACT TO AMEND TITLE 5 OF THE DELAWARE CODE RELATING TO STABLECOINS.

Sponsored By: Spiros Mantzavinos (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

22 provisions identified: 10 benefits, 4 costs, 8 mixed.

Stablecoin holders get priority in insolvency

If a Delaware-licensed permitted issuer becomes insolvent, holders can claim their stablecoins’ face value without a direct issuer contract. Identifiable backing reserves stay outside the issuer’s estate and serve holders before other claimants. Unpaid redemption claims also rank ahead of other unsecured claims. In proceedings run by the Commissioner, reserves must be distributed within 30 days when practicable. The Commissioner must set federal-aligned rules for reserve distribution, holder notices, bankruptcy coordination, and shutdowns. Licensed nonbank issuers may enter federal bankruptcy, where the Commissioner can participate and GENIUS Act exceptions apply.

Privacy safeguards for stablecoin customers

Permitted stablecoin issuers must maintain a written security program to protect customers’ private information. Issuers and affiliates generally cannot share it with unrelated third parties without informed consent, a safeguarded customer-requested service, or a legal requirement. Issuers must investigate and limit breaches, and notify the State Bank Commissioner within 72 hours of learning of an actual or reasonably likely breach. They must notify affected customers as soon as reasonably possible, unless law enforcement authorizes a delay in writing. If specific affected customers cannot be identified, everyone in the affected group must receive notice.

Reserve shortfalls trigger fee-free stablecoin liquidation

An issuer must report a reserve shortfall the same business day it knows or reasonably should know about it. New issuance must stop until reserves recover, except for qualifying ledger transfers that do not increase net issuance. A shortfall not fixed within 15 consecutive business days triggers orderly liquidation and redemption without redemption fees. The Commissioner can extend that period for good cause or order earlier redemption when timely compliance is seriously doubtful.

Stronger backing for stablecoin holders

Delaware-licensed issuers must always hold reserves worth at least as much as their outstanding stablecoins. Allowed assets include cash, qualifying deposits, Treasuries maturing within 93 days, qualifying overnight transactions, and government-only money market funds. Lawful tokenized reserves qualify; other similarly liquid assets need written approval. Reserves generally cannot be pledged or reused, except for specified margin, custody, and liquidity transactions. Eligible custodians must use written agreements, separate covered assets from their own property, and protect them from their creditors. These safeguards also cover issuance keys, stablecoin collateral, and related custody property; sub-custodians must meet eligibility and oversight standards. The Commissioner sets liquidity and concentration rules, including a safe harbor when no institution holds more than 40% of reserves.

Stablecoin cash-out deadlines allow emergency pauses

Permitted issuers must publish cash-out rules and usually complete requests within 2 business days, subject to identity and onboarding checks. Fee changes require at least 7 days’ notice. When requests exceed 10% of outstanding issuance in 24 hours, outstanding and subsequent requests get a 7-calendar-day deadline. The issuer must notify the Commissioner within 24 hours; the Commissioner can restore the shorter deadline early. Other limits, pauses, or delays require an order from the Commissioner, Federal Reserve Board, or a court. The Commissioner can order pauses for serious market, liquidity, or cybersecurity emergencies lasting up to 10 business days. Longer pauses require a new finding of need, and affected holders or issuers can seek expedited Court of Chancery review.

Stablecoin identity checks and lawful freezes

Licensed issuers must verify initial holders and maintain written programs against money laundering and terrorist financing. Programs require a compliance officer, staff training, independent testing, due diligence, records, transaction monitoring, suspicious-activity reports, and annual certification. Issuers must be able to freeze, seize, destroy, or block coins under lawful court or government orders and sanctions requirements. They must act within the order’s deadline. Issuers must protect nonpublic personal information and generally cannot sell it. Suspected unauthorized access requires investigation, mitigation, notice to the Commissioner within 72 hours, and required customer notices, subject to law-enforcement delays.

Stablecoin holders get monthly reserve reports

Issuers must publish reserve reports by noon on each month’s last day, using data from the previous month-end. Reports show outstanding stablecoins, reserve amounts and types, custody locations, average time to maturity, and material reserve changes. A registered public accounting firm must examine the information, and the chief executive and chief financial officers must certify it. Issuers above $50 billion in outstanding issuance must file audited financial statements using generally accepted accounting principles within 90 days after fiscal year-end. Issuers above $1 billion receive full examinations at least annually; the Commissioner can examine any licensed issuer more often.

Stablecoin marketing cannot imply government backing

Permitted issuers cannot use names or advertising suggesting that the U.S. government or a federal agency issues, guarantees, or backs their stablecoins. Issuers must prominently disclose that stablecoins lack federal bank or credit-union deposit insurance. The law does not create a government guarantee.

Stronger purchase protections for stablecoin customers

Permitted stablecoin issuers cannot require customers to buy another product or service to get their stablecoins. They must prominently disclose that their stablecoins are not deposits insured by the FDIC or NCUA. They cannot claim that any government agency insures their stablecoins. Issuer violations also violate Delaware’s consumer fraud law, which the Attorney General can enforce. The law creates no new right for customers to sue beyond existing state law.

Personal transfers and small issuers get exemptions

Licensing exemptions cover government entities, qualifying federal and bank-subsidiary issuers, licensed money transmitters, and qualifying attorney or title-insurer escrow services. Issuers handling no more than $5,000 annually with or for Delaware residents also qualify; the threshold is adjustable by regulation. Software providers qualify only when they lack unilateral control over users’ assets; federal law or Commissioner orders can also grant exemptions. Personal exclusions cover lawful direct transfers between two people acting for themselves without an intermediary, and wallets holding their own assets. Transfers between the same person’s U.S. and foreign accounts also qualify when both accounts are offered by the same parent company.

Stablecoin violations bring strong enforcement powers

The Commissioner can stop violations, suspend or revoke licenses, recover improper gains, and seek court orders. Maximum fines per violation per day are $100,000 for violations that are neither knowing nor reckless, and $500,000 otherwise. Patterns of misconduct or material harm to holders can bring fines up to $1 million per violation per day. License penalties and fines require notice and a hearing opportunity; emergency stop orders require imminent harm and a prompt later hearing. Knowingly issuing without a required license, misrepresenting an application, or filing false required reports is a Class F felony. Violations also fall under Delaware’s Consumer Fraud Act, enforceable by the Attorney General, without creating a new private lawsuit right.

Stablecoin issuers need capital and plans

The Commissioner must set a capital minimum of at least $5 million for new stablecoin issuers. Ongoing capital must cover at least 12 months of projected operating costs. Additional capital requirements can reflect risk, within the law’s limits. Issuers must follow tailored rules covering liquidity, reserves, business disruptions, outsourcing, data security, insider dealings, and issuance growth. They must update shutdown plans annually for insolvency or license surrender, with standards aligned to federal rules where practicable.

Stablecoin holders generally cannot earn interest

Permitted issuers generally cannot pay interest or yield to stablecoin holders. Issuers can keep returns earned on reserve assets for themselves. State-chartered or licensed issuers gain permission to pay holders when federal authority permits federal issuers, on the same terms.

Felony penalties for knowing stablecoin violations

Knowingly issuing a payment stablecoin without a required license is a Class F felony. Knowingly making a material false statement in a license application is also a Class F felony. The same penalty applies to knowingly submitting a false certification of a required report or disclosure.

Stablecoin issuers face Delaware licensing rules

Nonexempt issuers need a Delaware license to offer stablecoins to Delaware residents, wherever the issuer is located. Residents include people domiciled there, present more than 183 of the previous 365 days, or with a main business there. Applications require ownership, financial, reserve, custody, redemption, compliance, fingerprint, and cybersecurity information, plus evidence of required net worth and reserves. Applicants pay a nonrefundable fee and reasonable investigation costs; licenses take effect only after required security is provided. The Commissioner must decide complete applications within 120 days, with a possible 60-day extension, and tailor requirements to risk. Application requirements can be waived or replaced for good cause. Covered nonfinancial public companies and their affiliates need unanimous federal committee approval, including banking-risk and data-use findings, before issuance or licensure.

Stablecoin issuers pay for regulatory exams

Stablecoin issuers examined under the law must pay the reasonable costs of their regulatory examinations. The State Bank Commissioner sets those costs by regulation. The law specifies no fee amount or direct household charge.

Digital asset providers gain optional registration

Digital asset providers serving Delaware can register voluntarily; registration is not required to do business there. Registration supports interstate recognition, faster later issuer-license review, and protection from local licensing for activities listed in the registration. Registrants must report material changes within 30 days, renew annually, pay a fee, and help with complaint inquiries. Registration does not generally bring examinations or substantive regulation beyond specified complaint, information-sharing, and disclosure functions. Local governments cannot add stablecoin permits, extra reserve, capital, or money-laundering rules, or unauthorized restrictions on issuance and transfers. Inconsistent local rules are void; existing state consumer protections remain.

Existing issuers get simpler Delaware entry

Out-of-state issuers in good standing can seek a Delaware license without full duplicate review under substantially similar rules. They need no separate Delaware company; added conditions can address only material consumer, solvency, or custody gaps. Covered federally supervised issuers instead must register at least 30 days before serving Delaware residents, renew annually, and pay a fee. Registration is not a state license; Delaware keeps records and forwards complaints to federal regulators. An issuer receiving a conditional conversion license skips renewal for the applicable period, and registration ends when that license takes effect.

Issuer size shapes federal-state licensing transitions

Eligible federal nonbank issuers with no more than $10 billion outstanding can convert to Delaware licensing with a reduced application fee. They need compliant reserves, federal exit documentation, a continuity and holder-notice plan, and no materially risky enforcement matters. Conversion review takes 90 days, with a possible 45-day extension. The conditional license takes effect only after federal exit; failure to complete exit within 365 days automatically revokes it. Federal oversight continues until exit, with reserve, reporting, and practice-change notice duties during the transition. A Delaware-qualified issuer exceeding $10 billion during any consecutive 12 months must notify the Commissioner within 10 business days. Within 360 days, it must obtain federal approval or reduce issuance below $10 billion; its state license continues while it complies.

Stablecoin oversight adds fees and transition time

The State Bank Commissioner leads Delaware’s oversight and must issue implementing rules within 1 year after the law takes effect. Rules must align with federal standards where practicable and cover licensing, reserves, capital, security, examinations, and registration. Issuer licensing starts at the earlier of 18 months after the law takes effect or 120 days after rules are issued. Rules must provide temporary authorizations for applicants before that licensing date. Eligible money transmitters choosing voluntary registration get at least 18 months after rules are adopted to comply. The Commissioner sets application, renewal, examination, registration, and related fees; amounts are unspecified and receipts fund regulatory oversight.

Stablecoin owners and leaders face review

Proposed buyers of control must notify the Commissioner at least 60 days before acquiring a Delaware-licensed issuer. At least 10% beneficial ownership of voting shares creates a rebuttable presumption of control. Deals can proceed unless rejected within 60 days after complete notice, with a possible 30-day extension for good cause. Buyers who skip notice must supply information within 15 business days; the issuer’s license can be suspended during review. Certain federal banking deals and federally qualified issuers are excluded. Directors and executives cannot have convictions, guilty pleas, or no-contest pleas for fraud, dishonesty, breach of trust, money laundering, or financial crimes. The Commissioner can set additional fitness standards for leaders and controlling persons.

Stablecoins receive separate treatment from deposits

National currency, deposits, and specified securities are outside the law’s payment-stablecoin definition. This includes qualifying tokenized deposits representing an insured bank’s deposit liability. A stablecoin from a permitted issuer is not a security or bank deposit solely because it is a stablecoin. The same limited security rule covers qualifying bonds and similar instruments from permitted issuers. The Investor Protection Director can still classify a digital asset as a security based on its other features.

Sponsors & Cosponsors

Sponsor

Spiros Mantzavinos
Democratic • Senate

Cosponsors

William Bush
Democratic • House
William J. Carson
Democratic • House
Daniel B. Short
Republican • House
Brian Pettyjohn
Republican • Senate
Jeffrey N. Spiegelman
Republican • House

Roll Call Votes

All Roll Calls

Yes: 77 • No: 0

Senate vote • 6/24/2026

Passed (3/4 required)

Yes: 21 • No: 0

House vote • 6/18/2026

Passed (2/3 required)

Yes: 36 • No: 0

Senate vote • 4/23/2026