Title 12, Banks and BankingRelease 119-110
§5906 State Qualified Payment Stablecoin Issuers
Title 12 › CHAPTER 56 — REGULATION OF PAYMENT STABLECOINS › § 5906
Summary
State regulators must oversee, examine, and enforce rules for payment stablecoin issuers that are qualified under their State. A State regulator can make orders and rules for those issuers like the federal regulators do. The State regulator may agree with the Federal Reserve Board to let the Board help supervise and enforce the rules. The State regulator and the Board must keep sharing information about an issuer on an ongoing basis, including a copy of the issuer’s initial application and supporting papers. In unusual and urgent situations, the Federal Reserve Board or the Comptroller can act against a State qualified payment stablecoin issuer after giving at least 48 hours’ written notice to the State regulator. Each federal agency must write rules saying when those urgent actions can happen. If the agency finds a serious risk, it can issue a directive that limits things like redemptions, certain transactions with a holding company, or other activities that could threaten the issuer. The issuer or its related parties can object in writing; if the agency does not affirm, change, or cancel the directive within 10 days, the directive ends. If the agency affirms or changes it, the affected party can immediately go to federal court to challenge it, and in extraordinary cases may go to court before using the agency review. Host State consumer-protection laws apply to out-of-state State qualified issuers only to the same extent they apply to out-of-state federal qualified issuers; home State law governs when host State law does not apply. Laws about chartering or licensing remain separate, and State consumer-protection laws (other than licensing rules) are not preempted.
Full Legal Text
Title 12, §5906
Banks and Banking, Source: USLM XML via OLRC
(a)In general
A State payment stablecoin regulator shall have supervisory, examination, and enforcement authority over all State qualified payment stablecoin issuers of such State.
(b)Authority to enter into agreements with the Board
A State payment stablecoin regulator may enter into a memorandum of understanding with the Board, by mutual agreement, under which the Board may participate in the supervision, examination, and enforcement of this chapter with respect to the State qualified payment stablecoin issuers of such State.
(c)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 State, including a copy of the initial application and any accompanying documents.
(d)Rulemaking
A State payment stablecoin regulator may issue orders and rules under section 5903 of this title applicable to State qualified payment stablecoin issuers to the same extent as the primary Federal payment stablecoin regulators issue orders and rules under section 5903 of this title applicable to permitted payment stablecoin issuers that are not State qualified payment stablecoin issuers.
(e)Enforcement authority in unusual and exigent circumstances
(1)Board
(A)In general
Subject to subparagraph (C), under unusual and exigent circumstances that the Board determines to exist, the Board may, after not less than 48 hours’ prior written notice to the applicable State payment stablecoin regulator, take an enforcement action against a State qualified payment stablecoin issuer or an institution-affiliated party of such issuer for violations of this chapter during such unusual and exigent circumstances.
(B)Rulemaking
Consistent with section 5913 of this title, the Board shall issue rules to set forth the unusual and exigent circumstances in which the Board may act under this paragraph.
(C)Limitations
If, after unusual and exigent circumstances are determined to exist pursuant to subparagraph (A), 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 safety, soundness, or stability of the State qualified payment stablecoin issuer, the Board may impose such restrictions as the Board determines to be necessary to address such risk during such unusual and exigent circumstances, which may include limitations on redemptions of payment stablecoins, and which shall be issued in the form of a directive, with the effect of a cease and desist order that has become final, to the State qualified payment stablecoin issuer and any of its affiliates, limiting—
(i)transactions between the State qualified payment stablecoin issuer, a holding company, and the subsidiaries or affiliates of either the State qualified payment stablecoin issuer or the holding company; and
(ii)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 issuer.
(D)Review of directive
(i)Administrative review
(I)In general
After a directive described in subparagraph (C) is issued, the applicable State qualified payment stablecoin issuer, or any institution-affiliated party of the State qualified payment stablecoin issuer subject to the directive, may object and present to the Board, in writing, the reasons why the directive should be modified or rescinded.
(II)Automatic lapse of directive
If, after 10 days after the receipt of a response described in subclause (I), the Board does not affirm, modify, or rescind the directive, the directive shall automatically lapse.
(ii)Judicial review
(I)In general
If the Board affirms or modifies a directive pursuant to clause (i), 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 stay, modify, terminate, or set aside the directive.
(II)Relief for extraordinary cause
Upon a showing of extraordinary cause, an affected party may petition for relief under subclause (I) without first pursuing or exhausting the administrative remedies under clause (i).
(2)Comptroller
(A)In general
Subject to subparagraph (C), under unusual and exigent circumstances determined to exist by the Comptroller, the Comptroller shall, after not less than 48 hours’ prior written notice to the applicable State payment stablecoin regulator, take an enforcement action against a State qualified payment stablecoin issuer that is a nonbank entity for violations of this chapter.
(B)Rulemaking
Consistent with section 5913 of this title, the Comptroller shall issue rules to set forth the unusual and exigent circumstances in which the Comptroller may act under this paragraph.
(C)Limitations
If, after unusual and exigent circumstances are determined to exist under subparagraph (A), the Comptroller determines that there is reasonable cause to believe that the continuation of any activity by a State qualified payment stablecoin issuer that is a nonbank entity constitutes a serious risk to the financial safety, soundness, or stability of the State qualified payment stablecoin issuer that is a nonbank entity, the Comptroller shall impose such restrictions as the Comptroller determines to be necessary to address such risk during such unusual and exigent circumstances, which may include limitations on redemption of payment stablecoins, and which shall be issued in the form of a directive, with the effect of a cease and desist order that has become final, to the State qualified payment stablecoin issuer that is a nonbank entity and any of its affiliates, limiting—
(i)transactions between the State qualified payment stablecoin issuer, a holding company, and the subsidiaries or affiliates of either the State qualified payment stablecoin issuer or the holding company; and
(ii)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 issuer.
(D)Review of directive
(i)Administrative review
(I)In general
After a directive described in subparagraph (C) is issued, the applicable Federal qualified payment stablecoin issuer, or any institution-affiliated party of the Federal qualified payment stablecoin issuer subject to the directive, may object and present to the Comptroller, in writing, the reasons that the directive should be modified or rescinded.
(II)Automatic lapse of directive
If, after 10 days after the receipt of a response described in subclause (I), the Comptroller does not affirm, modify, or rescind the directive, the directive shall automatically lapse.
(ii)Judicial review
(I)In general
If the Comptroller affirms or modifies a directive pursuant to clause (i), 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 stay, modify, terminate, or set aside the directive.
(II)Relief for extraordinary cause
Upon a showing of extraordinary cause, an affected party may petition for relief under subclause (I) without first pursuing or exhausting the administrative remedies under clause (i).
(f)Effect on State law
(1)Host State law
Notwithstanding any other provision of law, the laws of a host State, including laws relating to consumer protection, 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 payment stablecoin issuer.
(2)Home State law
If any host State law is determined not to apply under paragraph (1), 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 State.
(3)Applicability
(A)In general
This subsection shall only apply to an out-of-State State qualified payment stablecoin issuer chartered, licensed, or otherwise authorized to do business by a State that has a certification in place pursuant to section 5903(c) of this title.
(B)Exclusion
The laws applicable to an out-of-State qualified payment stablecoin issuer under paragraph (1) exclude host State laws governing the chartering, licensure, or other authorization to do business in the host State as a permitted payment stablecoin issuer pursuant to this chapter.
(4)Rule of construction
Except for State laws relating to the chartering, licensure, or other authorization to do business as a permitted payment stablecoin issuer, nothing in this chapter shall preempt State consumer protection laws, including common law, and the remedies available thereunder.
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. (b), (e)(1)(A), (2)(A), and (f)(3)(B), (4), 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.
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. § 5906
Title 12, Banks and Banking
Last Updated
Sep 22, 2026
Release point: 119-110