Short title

This Act may be cited as the

Lummis-Gillibrand Payment Stablecoin Act

Definitions

In this Act:(1)

Algorithmic payment stablecoin

The term algorithmic payment stablecoin means a crypto asset that—(A)is represented by the issuer, or is otherwise designed to create the reasonable expectation, that the crypto asset will maintain a stable value relative to the value of a fixed amount of United States dollars; and(B)relies on the use of an algorithm that adjusts the supply of the crypto asset in response to changes in market demand for the crypto asset to maintain the expectation that the crypto asset will maintain a stable value.(2)

Applicable payment stablecoin regulator

The term applicable payment stablecoin regulator means, with respect to a payment stablecoin issuer—(A)in the case of a depository institution that issues a payment stablecoin under section 7, consistent with section 11(s)—(i)the Comptroller or State bank supervisor, as applicable; or(ii)the Board; and(B)in the case of a State non-depository trust company that issues a payment stablecoin under section 6, the applicable State bank supervisor and the Board, acting jointly.(3)

Bank Secrecy Act

The term Bank Secrecy Act means—(A)section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b);(B)chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.); and(C)subchapter II of chapter 53 of title 31, United States Code.(4)

Board

The term Board means the Board of Governors of the Federal Reserve System.(5)

Comptroller

The term Comptroller means the Comptroller of the Currency.(6)

Controlling interest

The term controlling interest means a circumstance when a person, directly or indirectly, or acting through or in concert with 1 or more persons—(A)owns, controls, or has the power to vote 25 percent or more of any class of voting securities of a depository institution or holding company thereof;(B)controls in any manner the election of a majority of the directors of a depository institution or holding company thereof; or(C)has the power to exercise a controlling influence over the management or policies of the depository institution or holding company thereof. (7)

Crypto asset

The term crypto asset means a natively electronic asset that confers economic, proprietary, or access rights or powers and is recorded using cryptographically secured distributed ledger technology, or any similar analog.(8)

Depository institution

The term depository institution—(A)has the meaning given that term in section 19(b)(1) of the Federal Reserve Act (12 U.S.C. 461(b)(1)); and(B)includes a depository institution operating under subsection (a)(2) of section 5169 of the Revised Statutes (12 U.S.C. 27), as amended by this Act, or a substantially similar State law, which is exclusively engaged in issuing payment stablecoins, providing safekeeping, trust, or custodial services, or activities incidental to the foregoing.(9)

Distributed ledger

The term distributed ledger means technology that enables the operation and use of a ledger that—(A)is shared across a set of distributed nodes that participate in a network and store a complete or partial replica of the ledger, which may be public or private;(B)is synchronized between the nodes;(C)has data appended to the ledger by following the specified consensus mechanism of the ledger;(D)may be accessible to anyone or restricted to a subset of participants; and(E)may require participants to have authorization to perform certain actions or require no authorization.(10)

Institution-affiliated party

With respect to a payment stablecoin issuer, the term institution-affiliated party means—(A)any director, officer, employee, or person with a controlling interest in, or acting as an agent for, the payment stablecoin issuer;(B)a consultant, joint venture partner, and any other person that participates in the conduct of the affairs of the payment stablecoin issuer; or(C)any independent contractor providing services for the payment stablecoin issuer, including any attorney, appraiser, or accountant.(11)

Insured depository institution

The term insured depository institution means—(A)an insured depository institution, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and(B)an insured credit union, as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).(12)

National payment stablecoin issuer

The term national payment stablecoin issuer means a depository institution chartered by the Comptroller or a State bank supervisor which is approved by the Board to conduct payment stablecoin activities under section 7.(13)

Payment stablecoin

The term payment stablecoin means crypto asset—(A)that is, or is designed to be, used as a means of payment or settlement;(B)the issuer of which—(i)is obligated to convert, redeem, or repurchase for a fixed amount of United States dollars; or(ii)represents, or creates the reasonable expectation, that the crypto asset will maintain a stable value relative to the value of a fixed amount of United States dollars; and(C)that is not—(i)United States coins, a Federal Reserve note or other lawful money (as that term is used in the Federal Reserve Act (12 U.S.C. 411)), money issued by a central bank, or money issued by an intergovernmental organization pursuant to an agreement by one or more governments; or(ii)a security issued by an investment company registered under section 8(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–8(a)).(14)

Payment stablecoin issuer

The term payment stablecoin issuer means—(A)a non-depository trust company chartered by a State bank supervisor that is registered, or required to be registered, with the Board to issue payment stablecoins; or(B)a depository institution chartered by the Comptroller or a State bank supervisor that is authorized, or required to be authorized, to become a national payment stablecoin issuer by the Board to issue payment stablecoins, including a depository institution subsidiary of an insured depository institution or bank holding company.(15)

State bank supervisor

The term State bank supervisor has the meaning given that term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).(16)

Subcustodian

The term subcustodian means a person that maintains actual possession or control of the private keys relating to a payment stablecoin and has a contractual relationship with the custodian of record of the payment stablecoin.

General requirements for payment stablecoin issuers

(a)

Stablecoins generally

(1)

Issue

A payment stablecoin may only be issued directly or indirectly in the United States by—(A)a non-depository trust company that has registered with the Board consistent with section 6 and for which the nominal value of all outstanding payment stablecoins does not exceed $10,000,000,000, as adjusted under subsection (b); or(B)by a depository institution that has been authorized as a national payment stablecoin issuer consistent with section 7. (2)

Prohibition on issuance

Except as otherwise provided under paragraph (1), it shall be unlawful for any person to engage in the business of issuing a payment stablecoin, directly or indirectly, in the United States, through any means or instruments of transportation or communication in the United States, or to a person in the United States.(3)

Offers or sales

(A)

In general

Except as otherwise provided in this section, it shall be unlawful for any person to offer or sell a payment stablecoin through the use of any medium or by any means of access in interstate commerce in the United States or to offer or sell a payment stablecoin to a United States person living in the United States.(B)

Exception

Subparagraph (A) does not apply to the sale of a payment stablecoin by a United States person living in the United States.(b)

Adjustment of threshold

Not less frequently than once every 4 years, the Board shall issue rules adjusting the threshold under subsection (a)(1)(A) solely to account for inflation.(c)

Algorithmic payment stablecoins

It shall be unlawful for any person to engage in the business of issuing, creating, or originating an algorithmic payment stablecoin.(d)

Safe harbors

(1)

In general

The Board shall issue regulations providing limited safe harbors from this section that are consistent with the purposes of this Act.(2)

Regulation requirements

Regulations issued pursuant to paragraph (1) shall provide that any safe harbors applicable to a payment stablecoin issuer shall be made available on an equal basis to any issuer chartered by either the Comptroller or a State bank supervisor.(3)

Safe harbors

Safe harbors under this section may include—(A)a pilot program allowing for limited issuance of payment stablecoins by entities not otherwise authorized under this section, subject to appropriate safeguards and oversight, in order to foster responsible innovation and competition in the payment stablecoin market; and(B)a safe harbor for payment a payment stablecoin issuer that is subject to comprehensive regulation and supervision by a foreign financial regulatory authority in a jurisdiction with an equivalent regulatory framework to the United States, as determined by the Board, in consultation with the Comptroller and State bank supervisors.(e)

Extraterritorial effect

This section is intended to have extraterritorial effect.

Prudential requirements applicable to all payment stablecoin issuers

(a)

Customer protection and segregation

A person who provides custodial services, including subcustodian or other safekeeping services, for payment stablecoins shall—(1)treat and deal with the payment stablecoins and cash of a customer as belonging to the customer; and(2)take appropriate steps to protect the payment stablecoins and cash of a customer from any claims of creditors of the person.(b)

Further requirements relating to segregation

(1)

In general

A person described in subsection (a) may, for convenience, commingle and deposit the payment stablecoins and cash of a customer in an account holding the payment stablecoins and cash of more than 1 customer, but which is separate from the proprietary assets of the issuer. (2)

Transactions

Such share of the payment stablecoins and cash of a customer in an account described in paragraph (1) that shall be necessary to transfer, adjust, or settle a transaction or transfer of assets may be withdrawn and applied to such purposes, including the payment of commissions, taxes, storage fees, and other charges lawfully accruing in connection with the provision of custodial services. (3)

Rule or order relating to commingling

The Board, in consultation with the Comptroller and State bank supervisors, may prescribe, by rule or order, that customer payment stablecoins or cash may be commingled and deposited in customer accounts with any other assets received by a person described in subsection (a) and required by the Board to be separately accounted for, treated as, and dealt with as belonging to customers.(c)

Prohibition on rehypothecation

Payment stablecoin reserves required under sections 6(f) and 7(e) shall not be pledged, rehypothecated, or reused, except for the purpose of creating liquidity to meet reasonable expectations of requests to redeem payment stablecoins, such that reserves in the form of Treasury bills, bonds, or notes may be pledged as collateral for repurchase agreements with a maturity of not more than 7 days, if—(1)the repurchase agreements are cleared by a central clearing counterparty that is approved by the Board; or(2)the payment stablecoin issuer has obtained the approval of the Board and the Comptroller or State bank supervisor, as applicable.(d)

Disclosures of assets

(1)

In general

Not later than 10 business days after the end of each month, a payment stablecoin issuer shall disclose, in a publicly accessible manner, a summary description that includes—(A)the assets backing the payment stablecoin, the value of the assets, and the number of outstanding payment stablecoins, as of the last day of the month; and(B)a report of all instances in which the payment stablecoin issuer failed to comply with any requirement under section 6(f) or 7(e). (2)

Filing with the Board

At the time of disclosure of the summary description under paragraph (1), the chief financial officer of a payment stablecoin issuer shall also file the summary description with the Board under penalty of perjury.(3)

Publication by the Board

Not later than 10 business days after receiving a filing under paragraph (2), the Board shall make the filing available on a website of the Board.(4)

Verification of disclosures

The Comptroller or State bank supervisor shall, as part of the regular examination of the payment stablecoin issuer, verify the composition of the assets and the accuracy of the summary description under paragraph (1).(e)

Disclosures to customers

A payment stablecoin issuer shall clearly disclose to customers that a payment stablecoin is not guaranteed by the United States Government and is not subject to deposit or share insurance by the Federal Deposit Insurance Corporation or the National Credit Union Administration. (f)

Misrepresentation of disclosures

A payment stablecoin issuer that misrepresents a disclosure under subsection (d) or (e) shall be subject to the penalty under section 18(a)(4) of the Federal Deposit Insurance Act (12 U.S.C. 1828(a)(4)) or section 709 of title 18, United States Code, as applicable.(g)

Redemptions

Not later than 1 business day after the receipt of a redemption request of a customer, a payment stablecoin issuer shall redeem an outstanding payment stablecoin of that payment stablecoin issuer at par in legal tender, as defined in section 5103 of title 31, United States Code.(h)

Limitation on activities

As determined by the Comptroller or State bank supervisor, in consultation with the Board, a payment stablecoin issuer may conduct only the following activities:(1)Management of required payment stablecoin reserves under sections 6(f) and 7(e).(2)Custodial services.(3)Settlement and clearing.(4)Post-trade services.(5)Incidental activities relating to the issuance and redemption of payment stablecoins and management of required reserves.(i)

Contracted services

(1)

In general

Except as otherwise provided under paragraph (2), whenever a payment stablecoin issuer, or an affiliate thereof, relies on or causes to be performed for itself, by contract, any services or activities authorized under this Act or that are necessary to the functioning of the payment stablecoin, whether on or off its premises—(A)the person that performs such services or activities shall be subject to regulation and supervision by the Comptroller or State bank supervisor that supervises the payment stablecoin issuer, as applicable, and the Board, solely with respect to the limited scope of the performance of such services and activities;(B)the person that performs such services or activities shall be subject to minimum financial resource requirements established by the Board, in consultation with the Comptroller and State bank supervisors, and shall be deemed a financial institution for purposes of title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.);(C)not later than the sooner of 30 days after making a contract for the performance of such services or activities or the date of the performance of such services or activities, the payment stablecoin issuer shall notify the Comptroller or State bank supervisor, as applicable, and the Board of the existence of the relationship;(D)for the purpose of ensuring compliance with the requirements under this subsection, the Board, after making best efforts to obtain necessary information from public sources and existing regulators, including the primary Federal or State regulator of the person performing such services or activities, if applicable, may conduct examinations of and require reports from such person solely with respect to the limited scope of the performance of services and activities subject to this subsection; and(E)the Board shall enforce the requirements of this subsection as if the person providing such services or activities was a payment stablecoin issuer. (2)

Limitations

Paragraph (1) shall not apply to—(A)a person performing the services or activities described in that paragraph that is subject to supervision or regulation by a primary financial regulatory agency described in subparagraph (A), (B), or (C) of section 2(12) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301(12)), or a State bank supervisor; and(B)a person that primarily engages in the business of providing hardware or software to facilitate the custody or safekeeping by a customer of the payment stablecoins of that customer.(j)

Treatment under the Bank Secrecy Act

(1)

In general

A payment stablecoin issuer or a person providing contracted services under subsection (i) shall be treated as a financial institution for purposes of the Bank Secrecy Act.(2)

Exception

This subsection shall not apply to any person that primarily engages in the business of providing hardware or software to facilitate the custody or safekeeping by a customer of the payment stablecoins of that customer.(k)

Collateral availability

(1)

In general

The Board, in consultation with the Comptroller, State bank supervisors, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, shall monitor the use of assets authorized as payment stablecoin reserves under sections 6(f) and 7(e), including United States Treasury bills, bonds, and notes, and the impact of the use of such assets on collateral availability and the efficient functioning of the capital markets. (2)

Rule of construction

Nothing in this subsection shall be construed as giving the Board supervisory or regulatory authority not otherwise granted under this Act.

Holding company supervision, affiliates, mergers, and acquisitions of payment stablecoin issuers

(a)

Holding companies and insured depository institutions

(1)

In general

A bank holding company or insured depository institution that has chartered a depository institution as a payment stablecoin issuer under section 7 shall be considered a bank for purposes of the Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.). (2)

Exception

Paragraph (1) shall not apply to an insured depository institution that is a savings association for the purposes of section 10(a) of the Home Owners’ Loan Act (12 U.S.C. 1467a(a)).(b)

Holding company supervision for other depository institutions

(1)

Requirements

A person with a controlling interest in a depository institution that is a payment stablecoin issuer which is not subject to subsection (a) shall—(A)annually submit to the Comptroller or State bank supervisor, as applicable, and the Board—(i)audited financial statements;(ii)a description of all affiliated or parent entities and the relationship of the affiliated or parent entity with the payment stablecoin issuer; and(iii)any other information the Board and the Comptroller or State bank supervisor, as applicable, may by rule reasonably require; and(B)if required by the Comptroller or State bank supervisor, as applicable, and the Board, execute a tax allocation agreement with the depository institution that—(i)expressly states that an agency relationship exists between the person and the depository institution with respect to tax assets generated by the depository institution, and that the tax assets are held in trust by the person for the benefit of the depository institution and will be promptly remitted to the depository institution; and(ii)may provide that the amount and timing of any payments or refunds to the depository institution by the person should be no less favorable than if the depository institution were a separate taxpayer.(2)

Examination and divestiture

(A)

In general

If the Comptroller or State bank supervisor, as applicable, and the Board determine it would be manifestly in the public interest and that reasonable cause exists to believe it is necessary to protect the customers of a depository institution that is a payment stablecoin issuer, the Comptroller or State bank supervisor, as applicable, and the Board may—(i)conduct an examination of a person with controlling interest in the depository institution or otherwise reasonably require information from the person; and(ii)require a person with a controlling interest in the depository institution to divest itself of or sever its relationship with the depository institution if necessary to maintain the safety and soundness of the depository institution, after consultation with the Secretary of the Treasury and an opportunity for a public hearing. (B)

Opportunity to remediate

Divestiture shall not be ordered under this section unless the Comptroller or State bank supervisor, and the Board provide the depository institution with a meaningful opportunity to remediate findings relating to the safety and soundness of the depository institution.(c)

Requirement relating to controlling interests

A person shall be predominantly engaged in financial activities, as defined in section 102(a)(6) of the Financial Stability Act of 2010 (12 U.S.C. 5311(a)(6)), in order to have a controlling interest in a payment stablecoin issuer.(d)

Affiliates

(1)

In general

All subsidiaries and affiliates of a payment stablecoin issuer that are not subject to subsection (a) shall be engaged in activities that are financial in nature (as described in section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k))).(2)

Exception

Paragraph (1) shall not apply to a subsidiary or affiliate that accounts for less than 25 percent of the revenue of the holding company of the subsidiary or affiliate. (3)

Transactions with affiliates

A payment stablecoin issuer is subject to the same restrictions on transactions with affiliates, to the same extent and subject to the same exceptions and exemptions as a member bank under sections 23A and 23B of the Federal Reserve Act (12 U.S.C. 371c, 371c–1).(e)

Approval of mergers and acquisitions

(1)

In general

No person may obtain a controlling interest in a payment stablecoin issuer that is not subject to section (a) without the approval of the Board and the Comptroller or State bank supervisor, as applicable. (2)

Rules

The Board, in consultation with the Comptroller and State bank supervisors, shall adopt rules to implement paragraph (1) that, consistent with this section, shall be as close as practicable to the process used by an appropriate Federal banking agency (as defined in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. 1813(q))) in evaluating and approving a change of control of an insured depository institution under section 7(j) of such Act (12 U.S.C. 1817(j)). (3)

Scope of rules

Criteria for approval under the rules adopted pursuant to paragraph (2) shall be exclusively limited to the safety and soundness of the depository institution that issues a payment stablecoin.

Issuance of payment stablecoins by non-depository trust companies

(a)

In general

(1)

In general

A non-depository trust company may issue and redeem payment stablecoins and conduct other activities in accordance with this section and section 4(g) if the value of all outstanding payment stablecoins in total does not exceed $10,000,000,000, as adjusted under section 3(b).(2)

Issuance threshold exceeded

If a non-depository trust company exceeds the threshold described in paragraph (1), the non-depository trust company shall, not later than 180 days after exceeding the threshold—(A)consistent with subsection (k), file a completed application with the Comptroller or State bank supervisor, as applicable, to convert to a depository institution charter under section 7 and be approved as provided in that section; or(B)in consultation with the State bank supervisor, implement a plan to appropriately limit activities below the threshold, consistent with the safety and soundness of the non-depository trust company and customer protection.(b)

Authorization To issue payment stablecoin

(1)

Application

(A)

In general

A non-depository trust company shall submit to a State bank supervisor, separately or as part of a charter application, an application for authorization to issue payment stablecoins. (B)

Standards for evaluation

The State bank supervisor may consult with the Board with respect to the following exclusive set of standards prior to approving an application under subparagraph (A):(i)The ability of the applicant to maintain required reserves backing the payment stablecoins.(ii)The financial resources, managerial or technical expertise, and governance of the applicant.(iii)The benefit to the public, including relating to innovation and competition.(iv)The stability of the financial system of the United States.(2)

Registration

(A)

Deadline

(i)

In general

Not later than 180 days after the approval of an application under paragraph (1), a non-depository trust company shall register with the Board by submitting to the Board a complete registration statement. (ii)

Extension

The Board may extend the deadline under clause (i) by an additional 180 days, if the Board determines appropriate.(B)

Contents of a complete registration statement

(i)

Rules required

Consistent with section 15 of this Act, the Board, in consultation with State bank supervisors, shall issue rules describing the content, documents, and materials required to be submitted to the Board that constitute a complete registration statement, which shall include materials required to be filed in an application to comply with the standards under paragraph (1)(B). (ii)

Completeness

If the State bank supervisor determines that an applicant has submitted all of the materials required under this subparagraph, the registration shall be deemed complete.(3)

Authorization to issue payment stablecoins

(A)

Effective date

(i)

In general

An approval of an application under paragraph (1) shall be deemed effective on the date that is 90 days after the date the applicant submits a complete registration statement to the Board under paragraph (2), unless the Board, by a vote of 2/3 of all members, votes to deny the application by written order explaining the reasons for denial.(ii)

Extension

Upon the request of an applicant, the Board may extend the effective date under clause (i).(B)

Issue prohibited before effective date

A non-depository trust company may not issue payment stablecoins before the effective date under subparagraph (A).(4)

Request for additional information

Nothing in this subsection shall be construed as prohibiting the Board from requesting further information from an applicant, but any request by the Board for further information from an applicant shall not affect the status of the registration statement as complete, as provided under paragraph (2)(B)(ii).(5)

Public availability of filings

The Board shall make each registration statement filed with the Board under this section available to the public on the website of the Board.(6)

Consultation

The Board shall consult with the applicable State bank supervisor relating to a non-depository trust company registration under this section, which may include sharing materials submitted as part of the application to issue a payment stablecoin.(c)

Supervision, regulation, and enforcement

(1)

Supervision authority

Upon the filing of a complete registration statement with the Board, a non-depository trust company shall be subject to supervision by the State bank supervisor, and the Board and State bank supervisor shall have enforcement authority as provided in section 11.(2)

Regular examinations

The applicable State bank supervisor shall make regular examinations of a non-depository trust company authorized to issue a payment stablecoin under this section on a regular basis in order to inform such State bank supervisor of—(A)the nature of the operations and financial condition of the non-depository trust company and any affiliates;(B)the financial, operational, and other risks within the non-depository trust company that may pose a threat to—(i)the safety and soundness of the non-depository trust company; or(ii)the stability of the financial system of the United States; and(C)the systems of the non-depository trust company for monitoring and controlling the risks described in subparagraph (B). (d)

Submission of reports

At the frequency established by rule of the Board, in consultation with State bank supervisors, each non-depository trust company subject to this section shall submit a report of condition under oath to the applicable State bank supervisor relating to—(1)the financial condition and status of systems for monitoring and controlling financial and operating risks of the non-depository trust company; and(2)compliance by the non-depository trust company, and any subsidiary thereof, with this Act and other applicable laws.(e)

Existing reports and examinations

(1)

In general

In supervising a non-depository trust company under this section, a State bank supervisor shall, to the fullest extent possible, use existing reports and other supervisory information and avoid duplication of examination activities, reporting requirements, and requests for information. (2)

Reports to the Board

Each State bank supervisor shall promptly provide to the Board all reports under subsection (d) and reports of examinations under this section.(f)

Reserve requirements

(1)

In general

A non-depository trust company that issues a payment stablecoin under this section shall maintain reserves of not less than 100 percent of the nominal value of all outstanding payment stablecoins issued by the non-depository trust company, as of the end of each business day. A non-depository trust company may maintain reserves comprised of—(A)United States coins, currency, or other instrument that is legal tender described in section 5103 of title 31, United States Code;(B)demand deposits at a depository institution, except that deposits in an insured depository institution shall not exceed the limit of deposit or share insurance available for that account;(C)United States Treasury bills, bonds, or notes with a maturity date of 90 days or less from the date of purchase; and(D)repurchase agreements, with a maturity date of 7 days or less, that are backed by United States Treasury bills with a maturity date of 1 year or less from the date of the repurchase agreement.(g)

Custody

A non-depository trust company shall be the legal custodian of required payment stablecoin reserves under subsection (f), but the non-depository trust company shall use a depository institution as subcustodian to provide for the safekeeping of reserves.(h)

Relation to Gramm-Leach-Bliley Act

A non-depository trust company that issues a payment stablecoin under this section shall be deemed to be a financial institution for the purposes of title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.). (i)

Rules

(1)

In general

The Board, in consultation with the State bank supervisors and the Financial Crimes Enforcement Network, shall adopt rules to implement this section, including—(A)a simplified capital treatment for non-depository trust companies under this section, which shall be exceed the greater of the projected receivership costs of the non-depository trust company or the projected costs of operation of the non-depository trust company over a 3-year period;(B)appropriate liquidity, interest rate, and risk management standards commensurate with the size of a non-depository trust company;(C)management practices with respect to required payment stablecoin assets;(D)appropriate operational, compliance, and information technology risk management, including Bank Secrecy Act and sanctions compliance; and(E)other rules required by this section.(2)

Significant differences

In determining capital requirements applicable to a non-depository trust company that has no material assets other than required payment stablecoin assets under this section—(A)the non-depository trust company shall not be subject to requirements similar to section 171 of the Financial Stability Act of 2010 (12 U.S.C. 5371); and(B)State bank supervisors and the Board shall take into account the limited risks of the assets of the non-depository trust company.(j)

Rules of construction

Nothing in this section may be construed as—(1)preventing a State bank supervisor from imposing additional or more strict regulatory standards on a non-depository trust company for issuing payment stablecoins; or(2)affecting existing State laws governing interstate trust company business or permitting non-depository trust companies to conduct payment stablecoin activities on an interstate basis which are inconsistent with State laws governing interstate trust company business. (k)

Planning for conversion

Not later than 180 days after the date that the nominal value of all outstanding payment stablecoins issued by a non-depository trust company first exceeds $9,000,000,000, as adjusted under section 3(b), at the end of a business day, the non-depository trust company shall, in consultation with the applicable State bank supervisor, develop a plan for the conversion of the non-depository trust company into a depository institution under section 7, which may include capital planning, management planning, and third-party vendor management.(l)

Existing non-Depository trust companies

A non-depository trust company shall only conduct payment stablecoin activities specified under this Act within the trust company.

Issuance of payment stablecoins by depository institutions

(a)

In general

(1)

In general

A depository institution may issue and redeem payment stablecoins and conduct other activities in accordance with this section and section 4(g). (2)

Charter of depository institutions

(A)

In general

An insured depository institution or bank holding company shall charter a separate depository institution to issue a payment stablecoin.(B)

Threshold

A payment stablecoin issuer with the nominal value of all outstanding units of the stablecoin which exceeds $10,000,000,000 (as adjusted under section 3(b)) shall be a depository institution under this section, but nothing shall be construed as prohibiting a payment stablecoin issuer with less than $10,000,000,000 of nominal value of outstanding payment stablecoins from obtaining a depository institution charter under this section.(b)

Authorization To issue payment stablecoin

(1)

Application

(A)

Application to chartering authority

A depository institution shall submit, separately or as part of a charter application, to the Comptroller or a State bank supervisor, as applicable, an application for authorization to issue payment stablecoins.(B)

Application to Board as national payment stablecoin issuer

At the same time as the filing of an application under paragraph (1), a depository institution shall submit to the Board an application for authorization as a national payment stablecoin issuer.(2)

Standards for approval

The following exclusive set of standards shall govern the decision of the Comptroller or State bank supervisor, as applicable, with respect to an application under paragraph (1):(A)The ability of the applicant to maintain required reserves backing the payment stablecoins required under this section.(B)The financial resources, managerial or technical expertise, and governance of the applicant, including risk management and compliance.(C)The benefit to the public, including relating to innovation and competition.(D)The stability of the financial system of the United States.(3)

Application contents

(A)

Rules required

Not later than 180 days after the date of enactment of this Act, the Board, in consultation with the Comptroller and State bank supervisors, shall issue rules describing the content, documents, and materials required to be submitted to the Board that constitute a complete application, which shall include—(i)a tailored recovery and resolution plan, consistent with the standards adopted under subsection (h)(1)(E), that would permit the orderly resumption of a safe and sound operation or the orderly wind-down of operations in the event of distress, including the redemption of all outstanding payment stablecoins;(ii)a draft customer agreement; (iii)a flow of funds explanation;(iv)an information technology operations and security plan; and (v)all materials required to comply with the standards under paragraph (2).(B)

Completeness

If the Comptroller or State bank supervisor, as applicable, determines that an applicant has submitted all of the materials required under this paragraph, the application shall be deemed complete.(4)

Public notice

(A)

In general

The Board shall provide a copy of each application under this section to the public (with any confidential information redacted) and provide for a 60-day public comment period during which the public may submit written comments on the application. (B)

Exception

The Board may waive the public comment requirement under subparagraph (A) if the Board determines that it must act immediately to prevent the failure of a depository institution or the probable failure of an affiliate of the institution. (5)

Written decision

(A)

In general

Not later than 180 days after receiving a complete application pursuant to paragraph (3), the Board shall render a written decision to approve or deny the national payment stablecoin issuer application under paragraph (1), with appropriate findings, and the Comptroller or State bank supervisor shall render a decision on the charter application as otherwise provided by Federal or State law.(B)

Approval by majority vote

The Board shall not approve an application under paragraph (1) unless a majority of its members vote to approve.(C)

Extension

Upon the request of an applicant, the Board may extend the decision deadline of the Board under subparagraph (A). (6)

Requests for additional information

Nothing in this subsection shall be construed as prohibiting the Board from requesting further information from an applicant, but any request by the Board for further information from an applicant shall not affect the status of the application as complete, as provided under paragraph (3)(B). (c)

Supervision

Upon authorization as a national payment stablecoin issuer under this section, a depository institution shall be subject to prudential supervision and regulation by the Comptroller or State bank supervisor, as applicable, and the Board, as specified under this Act. (d)

Required payment stablecoin assets

(1)

In general

A depository institution that issues a payment stablecoin under this section shall maintain reserves of not less than 100 percent of the nominal value of all outstanding payment stablecoins, as of the end of each business day. (2)

Composition of reserves

A depository institution may maintain reserves comprised of—(A)United States coins, currency, or other instrument that is legal tender described in section 5103 of title 31, United States Code;(B)demand deposits at a depository institution, except that deposits in an insured depository institution shall not exceed the limit of deposit or share insurance available for that account;(C)balances held at a Federal Reserve bank;(D)United States Treasury bills, notes, or bonds with a maturity date of 90 days or less after the date of purchase; and(E)repurchase agreements with a maturity date of 7 days or less, that are backed by United States Treasury bills with a maturity date of 1 year or less from the date of the repurchase agreement. (e)

Call report

As applicable, the Comptroller or State bank supervisor and the Board shall require a depository institution that issues a payment stablecoin to report, in detail, on the composition of the assets and liabilities in each periodic report of condition, or in an alternative format approved by the Federal Financial Institutions Examination Council, at the frequency otherwise required by law for depository institutions.(f)

Examinations

(1)

Use of existing reports

In supervising a depository institution under this section, the Comptroller or State bank supervisor, as applicable, and the Board shall, to the fullest extent possible, use existing reports and other supervisory information and avoid duplication of examination activities, reporting requirements, and requests for information. (2)

Regular examinations

The Comptroller or State bank supervisor, as applicable, and the Board shall make regular examinations of a depository institution under this section on a regular basis in order to inform the Comptroller or State bank supervisor, as applicable, and the Board of—(A)the nature of the operations and financial condition of the depository institution and any affiliates;(B)the financial, operational, and other risks within the depository institution that may pose a threat to—(i)the safety and soundness of the depository institution; or(ii)the stability of the financial system of the United States; and(C)the systems of the depository institution for monitoring and controlling the risks described in subparagraph (B). (g)

Relation to Gramm-Leach-Bliley Act

A depository institution that issues a payment stablecoin under this section shall be deemed to be a financial institution for the purposes of title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.). (h)

Rules

(1)

In general

The Board, in consultation with the Comptroller, State bank supervisors, and the Financial Crimes Enforcement Network, shall adopt rules to implement this section, including—(A)capital treatment for depository institutions under this section, which shall be not greater than the total sum of—(i)the greater of—(I)projected receivership costs; or(II)projected costs of operation over a 3-year period; and(ii)the sum of—(I)operational risk, as provided under paragraph (2)(C); and(II)collateral reasonably needed to address payment system risk;(B)managing liquidity, leverage, and market and interest rate risk;(C)management practices with respect to required payment stablecoin assets;(D)appropriate operational, compliance, and information technology risk management, including Bank Secrecy Act and sanctions compliance; (E)tailored recovery and resolution standards relating to payment stablecoins; and(F)third-party risk management, including appropriate governance of relationships with crypto asset exchanges.(2)

Significant differences

In determining capital requirements applicable to a depository institution that has no material assets other than required payment stablecoin assets under this section—(A)the depository institution shall not be subject to section 171 of the Financial Stability Act of 2010 (12 U.S.C. 5371);(B)the Board, in consultation with the Comptroller and State bank supervisors, shall take into account the significant differences between the risks of the assets of the institution and those of depository institutions with assets that consist primarily of commercial or consumer loans; and(C)assessment of operational risk shall occur commensurate with the size and complexity of the depository institution.(i)

Rules of construction

Nothing in this Act may be construed as—(1)preventing the Comptroller or a State bank supervisor which charters a depository institution from imposing additional or more strict regulatory standards on the institution for issuing payment stablecoins; (2)making inapplicable the provisions of section 24(j) of the Federal Deposit Insurance Act (12 U.S.C. 1831a(j)) to a depository institution, including the ability of a depository institution to operate under home State law on an interstate basis without further licensure, registration, or authorization, as provided in that Act; or (3)requiring a depository institution to obtain deposit insurance to issue a payment stablecoin under this section or to conduct incidental activities under this section. (j)

Conversion of a non-Depository trust company payment stablecoin issuer

Not later than 2 years after the date of enactment of this Act, the Board, in consultation with the Comptroller and State bank supervisors, shall issue rules—(1)establishing a process for a non-depository trust company registered under section 6 to convert to a depository institution under this section;(2)setting forth an expedited process for approval that is consistent with this section; and(3)providing for the implementation of the plan required to be developed under subsection (l) of section 6 of this Act. (k)

Existing holding companies and depository institutions

A bank holding company or insured depository institution shall only conduct payment stablecoin activities authorized by this Act within a depository institution subsidiary of the insured depository institution or a bank holding company.

Certificate of authority to commence banking for certain national associations

Section 5169 of the Revised Statutes (12 U.S.C. 27) is amended—(1)in subsection (a), in the third sentence, by striking to those of a non-depository trust company and activities related thereto. and inserting “to—

(1)those of a non-depository trust company and fiduciary activities related thereto; or(2)those of a depository institution for the purposes of issuing a payment stablecoin and activities related thereto as a national payment stablecoin issuer under section 7 of the Lummis-Gillibrand Payment Stablecoin Act.

; and

(2)by adding at the end the following:

(c)The Comptroller may, by rule, establish assessments depository institutions engaged in issuing payment stablecoins.

Appointment of FDIC as conservator or receiver of payment stablecoin issuers

(a)

Definition

As used in this section, the term customer means a person, or authorized representative of the person, that—(1)utilized or is utilizing any service of a payment stablecoin issuer with respect to an account in the name of the person maintained by the payment stablecoin issuer; or(2)is in possession or control of a payment stablecoin issued by a payment stablecoin issuer for which the payment stablecoin issuer for which an open account with the issuer is needed to redeem the payment stablecoin. (b)

Funding

(1)

In general

A payment stablecoin issuer shall not be charged deposit insurance premiums for the purposes of this section, but the Federal Deposit Insurance Corporation (in this section referred to as the Corporation) may use the capital of the payment stablecoin issuer and any returns on required payment stablecoin reserves to fund the costs of a receivership or conservatorship. (2)

Limitation

The Corporation shall not exercise borrowing authority under section 14 of the Federal Deposit Insurance Act (12 U.S.C. 1824) related to a receivership or conservatorship under this section.(c)

Liquidation as closing of payment stablecoin issuer

For the purposes of this section, a payment stablecoin issuer shall be deemed to have been closed on account or inability to meet the demands of its customers in any case in which it has been closed for the purpose of liquidation without adequate provision being made for payment of its customers.(d)

Appointment of Corporation as conservator or receiver

(1)

In general

Notwithstanding any other provision of Federal law, the law of any State, or the constitution of any State, the Corporation may accept appointment and act as conservator or receiver for a payment stablecoin issuer upon appointment in the manner provided in paragraph (2) or (3).(2)

OCC depository institutions

(A)

Appointment

(i)

Conservator

The Corporation may, at the discretion of the Comptroller, be appointed conservator of a payment stablecoin issuer which is a depository institution chartered by the Comptroller and the Corporation may accept such appointment.(ii)

Receiver

The Corporation shall be appointed receiver, and shall accept such appointment, whenever a receiver is appointed for the purpose of liquidation or winding up the affairs of a payment stablecoin issuer which is a depository institution chartered by the Comptroller, notwithstanding any other provision of Federal law.(B)

Additional powers

In addition to and not in derogation of the powers conferred and the duties imposed by this section on the Corporation as conservator or receiver, the Corporation, to the extent not inconsistent with such powers and duties, shall have any other power conferred on or any duty (which is related to the exercise of such power) imposed on a conservator or receiver for any Federal depository institution under any other provision of law.(C)

Corporation not subject to any other agency

When acting as conservator or receiver pursuant to an appointment described in subparagraph (A), the Corporation shall not be subject to the direction or supervision of any other agency or department of the United States or any State in the exercise of the Corporation’s rights, powers, and privileges.(D)

Depository institution in conservatorship subject to banking agency supervision

Notwithstanding subparagraph (C), a payment stablecoin issuer which is a depository institution chartered by the Comptroller for which the Corporation has been appointed conservator shall remain subject to the supervision of the Comptroller.(3)

State-chartered payment stablecoin issuers

(A)

Appointment by State bank supervisor

Whenever a State bank supervisor appoints a conservator or receiver for such institution and tenders appointment to the Corporation, the Corporation may accept such appointment.(B)

Additional powers

In addition to the powers conferred and the duties related to the exercise of such powers imposed by State law on any conservator or receiver appointed under the law of such State, the Corporation, as conservator or receiver pursuant to an appointment described in subparagraph (A), shall have the powers conferred and the duties imposed by this section on the Corporation as conservator or receiver.(C)

Corporation not subject to any other agency

When acting as conservator or receiver pursuant to an appointment described in subparagraph (A), the Corporation shall not be subject to the direction or supervision of any other agency or department of the United States or any State in the agency or department of the United States or any State in the exercise of its rights, powers, and privileges.(D)

Issuer in conservatorship subject to banking agency supervision

Notwithstanding subparagraph (C), a State-chartered payment stablecoin issuer for which the Corporation has been appointed conservator shall remain subject to the supervision of the State bank supervisor.(4)

Grounds for appointing conservator or receiver

The grounds for appointing a conservator or receiver (which may be the Corporation) for a payment stablecoin issuer are as follows:(A)

Assets insufficient for obligations

The issuer’s assets are less than the issuer’s obligations to its creditors and others.(B)

Substantial dissipation

Substantial dissipation of assets or earnings due to—(i)any violation of any statute or regulation; or(ii)any unsafe or unsound practice.(C)

Unsafe or unsound condition

An unsafe or unsound condition to transact business.(D)

Cease and desist orders

Any willful violation of a cease and desist order which has become final.(E)

Concealment

Any concealment of the institution’s books, papers, records, or assets, or any refusal to submit the institution’s books, papers, records, or affairs for inspection to any examiner or to any lawful agent of the Comptroller, State bank supervisor, or the Board.(F)

Inability to meet obligations

The issuer is likely to be unable to pay its obligations or meet its customers’ demands in the normal course of business.(G)

Losses

The issuer has incurred or is likely to incur losses that will deplete all or substantially all of its capital, and there is no reasonable prospect for the institution to come into compliance with capital requirements specified under this Act, consistent with Board regulation.(H)

Violations of law

Any violation of any law or regulation, or any unsafe or unsound practice or condition that is likely to—(i)cause insolvency or substantial dissipation of assets or earnings;(ii)weaken the issuer’s condition; or(iii)otherwise seriously prejudice the interests of the institution’s customers.(I)

Consent

The issuer, by resolution of its board of directors or its shareholders or members, consents to the appointment.(J)

Undercapitalization of institution

The institution is undercapitalized as specified by Board rule, and—(i)has no reasonable prospect of becoming adequately capitalized (as defined by Board rule);(ii)fails to become adequately capitalized when required to do so; (iii)fails to submit a capital restoration plan; or(iv)materially fails to implement a capital restoration plan.(K)

Undercapitalization of issuer

The issuer—(i)is critically undercapitalized, as defined by Board rule; or(ii)otherwise has substantially insufficient capital.(L)

Money laundering offense

The Attorney General notifies the Board, Comptroller, or State bank supervisor, as applicable, or the Corporation in writing that the payment stablecoin issuer has been found guilty of a criminal offense under section 1956 or 1957 of title 18, United States Code, or section 5322 or 5324 of title 31, United States Code.(5)

Directors not liable for acquiescing in appointment of conservator or receiver

The members of the board of directors of a payment stablecoin issuer shall not be liable to the issuer’s shareholders or creditors for acquiescing in or consenting in good faith to—(A)the appointment of the Corporation as conservator or receiver for that issuer; or(B)an acquisition or combination in which the Corporation requires the issuer to be acquired or combined with another payment stablecoin issuer.(e)

Powers and duties of Corporation as conservator or receiver

(1)

Rulemaking authority of Corporation

The Corporation may prescribe such regulations as the Corporation determines to be appropriate regarding the conduct of conservatorships or receiverships of payment stablecoin issuers, in consultation with the Comptroller, State bank supervisors, and the Board.(2)

General powers

(A)

Successor to institution

The Corporation shall, as conservator or receiver, and by operation of law, succeed to—(i)all rights, titles, powers, and privileges of the payment stablecoin issuer, and of any stockholder, member, accountholder, depositor, officer, or director of such issuer with respect to the issuer and the assets of the issuer; and(ii)title to the books, records, and assets of any previous conservator or other legal custodian of such institution.(B)

Operate the institution

The Corporation may, as conservator or receiver—(i)take over the assets of and operate the payment stablecoin issuer with all the powers of the members or shareholders, the directors, and the officers of the issuer and conduct all business of the issuer;(ii)collect all obligations and money due to the institution;(iii)perform all functions of the issuer in the name of the issuer which are consistent with the appointment as conservator or receiver; and(iv)preserve and conserve the assets and property of the issuer.(C)

Functions of issuer’s officers, directors, and shareholders

The Corporation may, by regulation or order, provide for the exercise of any function by any member or stockholder, director, or officer of any payment stablecoin issuer for which the Corporation has been appointed conservator or receiver.(D)

Powers as conservator

The Corporation may, as conservator, take such action as may be—(i)necessary to put the payment stablecoin issuer in a sound and solvent condition; and(ii)appropriate to carry on the business of the issuer and preserve and conserve the assets and property of the issuer.(E)

Additional powers as receiver

The Corporation may, as receiver, place the payment stablecoin issuer in liquidation and proceed to realize upon the assets of the issuer, having due regard to the conditions of credit in the locality.(F)

Organization of new institutions

The Corporation may, as receiver, with respect to any payment stablecoin issuer, organize a bridge payment stablecoin issuer under subsection (m).(G)

Merger; transfer of assets and liabilities

(i)

In general

The Corporation may, as conservator or receiver—(I)merge the payment stablecoin issuer with another payment stablecoin issuer; or(II)subject to clause (ii), transfer any asset or liability of the issuer in default without any approval, assignment, or consent with respect to such transfer.(ii)

Approval by appropriate regulator

No transfer described in clause (i)(II) may be made to a payment stablecoin issuer or without the approval of the appropriate payment stablecoin regulator for such issuer.(H)

Payment of valid obligations

The Corporation, as conservator or receiver, shall pay all valid obligations of the payment stablecoin issuer, as determined by the Corporation.(I)

Subpoena authority

(i)

In general

The Corporation may, as conservator, receiver, or exclusive manager and for purposes of carrying out any power, authority, or duty with respect to a payment stablecoin issuer (including determining any claim against the issuer and determining and realizing upon any asset of any person in the course of collecting money due the issuer), exercise any power established under section 8(n) of the Federal Deposit Insurance Act (12 U.S.C. 1818(n)) and the provisions of such section shall apply with respect to the exercise of any such power under this subparagraph in the same manner as such provisions apply under such section.(ii)

Authority of board of directors

A subpoena or subpoena duces tecum may be issued under clause (i) only by, or with the written approval of, the Board of Directors of the Corporation or their designees.(iii)

Rule of construction

This subsection shall not be construed as limiting any rights that the Corporation, in any capacity, may otherwise have under section 10(c) of the Federal Deposit Insurance Act (12 U.S.C. 1820(c)).(J)

Incidental powers

The Corporation may, as conservator or receiver—(i)exercise all powers and authorities necessary to conduct the conservatorship or receivership, respectively, and such incidental powers as shall be necessary to carry out such powers; and(ii)take any action authorized by this section, which the Corporation determines is in the best interests of the payment stablecoin issuer, its customers, or the Corporation.(K)

Utilization of private sector

In carrying out its responsibilities in the management and disposition of assets from payment stablecoin issuers, as conservator, receiver, or in its corporate capacity, the Corporation shall utilize the services of private persons, including property management, auction marketing, legal, and brokerage services, only if such services are available in the private sector and the Corporation determines utilization of such services is the most practicable, efficient, and cost effective.(3)

Authority of receiver to determine claims

(A)

In general

The Corporation may, as receiver, determine claims in accordance with the requirements of this subsection and regulations prescribed under paragraph (4).(B)

Notice requirements

The Corporation, as receiver, in any case involving the liquidation or winding up of the affairs of a closed payment stablecoin issuer, shall—(i)promptly publish a notice to the payment stablecoin issuer’s creditors to present their claims, together with proof, to the receiver by a date specified in the notice which shall be not less than 90 days after the publication of such notice; and(ii)republish such notice approximately 1 month and 2 months, respectively, after the publication under clause (i).(C)

Mailing required

The Corporation, as receiver, shall mail a notice similar to the notice published under subparagraph (B)(i) at the time of such publication to any creditor shown on the issuer’s books—(i)at the creditor’s last address appearing in such books; or(ii)upon discovery of the name and address of a claimant not appearing on the issuer’s books within 30 days after the discovery of such name and address.(4)

Rulemaking authority relating to determination of claims

(A)

In general

The Corporation may prescribe regulations regarding the allowance or disallowance of claims by the Corporation, as receiver, and providing for administrative determination of claims and review of such determination.(B)

Final settlement payment procedure

In the handling of receiverships of payment stablecoin issuers, to maintain essential liquidity and to prevent financial disruption, the Corporation may, after the declaration of an issuer’s insolvency, settle all unsecured claims on the receivership with a final settlement payment which shall constitute full payment and disposition of the Corporation’s obligations to such claimants.(5)

Procedures for determination of claims

(A)

Determination period

(i)

In general

Before the end of the 180-day period beginning on the date any claim against a payment stablecoin issuer is filed with the Corporation as receiver, the Corporation shall determine whether to allow or disallow the claim and shall notify the claimant of any determination with respect to such claim.(ii)

Extension of time

The period described in clause (i) may be extended by a written agreement between the claimant and the Corporation.(iii)

Mailing of notice sufficient

The requirements of clause (i) shall be deemed to be satisfied if the notice of any determination with respect to any claim is mailed to the last address of the claimant which appears—(I)on the payment stablecoin issuer’s books;(II)in the claim filed by the claimant; or(III)in documents submitted in proof of the claim.(iv)

Contents of notice of disallowance

If any claim filed under clause (i) is disallowed, the notice to the claimant shall contain—(I)a statement of each reason for the disallowance; and(II)the procedures available for obtaining agency review of the determination to disallow the claim or judicial determination of the claim.(B)

Allowance of proven claims

The Corporation, as receiver, shall allow any claim received on or before the date specified in the notice published under paragraph (3)(B)(i) by the receiver from any claimant which is proved to the satisfaction of the receiver.(C)

Disallowance of claims filed after end of filing period

(i)

In general

Except as provided in clause (ii), claims filed after the date specified in the notice published under paragraph (3)(B)(i) shall be disallowed and such disallowance shall be final.(ii)

Certain exceptions

Clause (i) shall not apply with respect to any claim filed by any claimant after the date specified in the notice published under paragraph (3)(B)(i) and such claim may be considered by the Corporation, as receiver, if—(I)the claimant did not receive notice of the appointment of the receiver in time to file such claim before such date; and(II)such claim is filed in time to permit payment of such claim.(D)

Authority to disallow claims

(i)

In general

The Corporation, as receiver, may disallow any portion of any claim by a creditor or claim of security, preference, or priority which is not proved to the satisfaction of the receiver.(ii)

Payments to less than fully secured creditors

In the case of a claim of a creditor against a payment stablecoin issuer which is secured by any property or other asset of such issuer, the Corporation, as receiver—(I)may treat the portion of such claim which exceeds an amount equal to the fair market value of such property or other asset as an unsecured claim against the issuer; and(II)may not make any payment with respect to such unsecured portion of the claim other than in connection with the disposition of all claims of unsecured creditors of the issuer.(E)

No judicial review of determination

No court may review the Corporation’s determination pursuant to subparagraph (D) to disallow a claim.(F)

Legal effect of filing

(i)

Statute of limitations tolled

For purposes of any applicable statute of limitations, the filing of a claim with the Corporation as receiver shall constitute a commencement of an action.(ii)

No prejudice to other actions

Subject to paragraph (12), the filing of a claim with the Corporation as receiver shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the Corporation as receiver.(6)

Provision for agency review or judicial determination of claims

(A)

In general

Before the end of the 60-day period beginning on the earlier of—(i)the end of the period described in paragraph (5)(A)(i) with respect to any claim against a payment stablecoin issuer for which the Corporation is receiver; or(ii)the date of any notice of disallowance of such claim pursuant to paragraph (5)(A)(i),

the claimant may request administrative review of the claim in accordance with subparagraph (A) or (B) of paragraph (7) or file suit on such claim (or continue an action commenced before the appointment of the Corporation as receiver in the district or territorial court of the United States for the district within which the payment stablecoin issuer’s principal place of business is located or the United States District Court for the District of Columbia (and such court shall have jurisdiction to hear such claim).

(B)

Statute of limitations

If any claimant fails to—(i)request administrative review of any claim in accordance with subparagraph (A) or (B) of paragraph (7); or(ii)file suit on such claim (or continue an action commenced before the appointment of the Corporation as receiver),

before the end of the 60-day period described in subparagraph (A), the claim shall be deemed to be disallowed (other than any portion of such claim which was allowed by the receiver) as of the end of such period, such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim.

(7)

Review of claims

(A)

Administrative hearing

If any claimant requests review under this subparagraph in lieu of filing or continuing any action under paragraph (6) and the Corporation agrees to such request, the Corporation shall consider the claim after opportunity for a hearing on the record. The final determination of the Corporation with respect to such claim shall be subject to judicial review under chapter 7 of title 5, United States Code.(B)

Other review procedures

(i)

In general

The Corporation shall also establish such alternative dispute resolution processes as may be appropriate for the resolution of claims filed under paragraph (5)(A)(i).(ii)

Criteria

In establishing alternative dispute resolution processes under clause (i), the Corporation shall strive for procedures which are expeditious, fair, independent, and low cost.(iii)

Voluntary binding or nonbinding procedures

The Corporation may establish both binding and nonbinding processes, which may be conducted by any government or private party, but all parties, including the claimant and the Corporation, shall agree to the use of the process established under clause (i) in a particular case.(iv)

Consideration of incentives

The Corporation shall seek to develop incentives for claimants to participate in the alternative dispute resolution process established under clause (i).(8)

Expedited determination of claims

(A)

Establishment required

The Corporation shall establish a procedure for expedited relief outside of the routine claims process established under paragraph (5) for claimants who—(i)allege the existence of legally valid and enforceable or perfected security interests in assets of a payment stablecoin issuer for which the Corporation has been appointed receiver; and(ii)allege that irreparable injury will occur if the routine claims procedure is followed.(B)

Determination period

Before the end of the 90-day period beginning on the date any claim is filed in accordance with the procedures established pursuant to subparagraph (A), the Corporation shall—(i)determine—(I)whether to allow or disallow such claim; or(II)whether such claim should be determined pursuant to the procedures established pursuant to paragraph (5); and(ii)notify the claimant of the determination, and if the claim is disallowed, provide a statement of each reason for the disallowance and the procedure for obtaining agency review or judicial determination.(C)

Period for filing or renewing suit

Any claimant who files a request for expedited relief shall be permitted to file a suit, or to continue a suit filed before the appointment of the receiver, seeking a determination of the claimant’s rights with respect to such security interest after the earlier of—(i)the end of the 90-day period beginning on the date of the filing of a request for expedited relief; or(ii)the date the Corporation denies the claim.(D)

Statute of limitations

If an action described in subparagraph (C) is not filed, or the motion to renew a previously filed suit is not made, before the end of the 30-day period beginning on the date on which such action or motion may be filed in accordance with subparagraph (B), the claim shall be deemed to be disallowed as of the end of such period (other than any portion of such claim which was allowed by the receiver), such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim.(E)

Legal effect of filing

(i)

Statute of limitations tolled

For purposes of any applicable statute of limitations, the filing of a claim with the Corporation as receiver shall constitute a commencement of an action.(ii)

No prejudice to other actions

Subject to paragraph (12), the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the appointment of the Corporation as receiver.(9)

Agreement as basis of claim

Any agreement which does not meet the requirements set forth in section 13(e) of the Federal Deposit Insurance Act (12 U.S.C. 1823(e)), shall not form the basis of, or substantially comprise, a claim against the Corporation as receiver.(10)

Payment of claims

(A)

In general

The Corporation as receiver may, in the discretion of the Corporation and to the extent funds are available, pay creditor claims approved pursuant to a final determination pursuant to paragraph (7) or (8), or determined by the final judgment of any court of competent jurisdiction in such manner and amounts as are authorized under this section.(B)

Payment of dividends on claims

The Corporation, as receiver, may, in the sole discretion of the Corporation, pay dividends on proved claims at any time, and no liability shall attach to the Corporation (in such Corporation’s corporate capacity or as receiver), by reason of any such payment, for failure to pay dividends to a claimant whose claim is not proved at the time of any such payment.(C)

Rulemaking authority of Corporation

The Corporation may prescribe such rules, including definitions of terms, as it deems appropriate to establish a single uniform interest rate for or to make payments of post insolvency interest to creditors holding proven claims against the receivership estates of payment stablecoin issuers following satisfaction by the Corporation as receiver of the principal amount of all creditor claims.(11)

Customer preference

(A)

In general

Subject to section 5(e)(2)(C) of the Federal Deposit Insurance Act (12 U.S.C. 1815(e)(2)(C)), amounts realized from the liquidation or other resolution of a payment stablecoin issuer by the Corporation as receiver shall be distributed to pay claims (other than secured claims to the extent of any such security) in the following order of priority:(i)Administrative expenses of the Corporation as receiver.(ii)Outstanding payment stablecoin liabilities.(iii)Any other general or senior liability of the issuer (which is not a liability described in clause (iv) or (v)).(iv)Any obligation subordinated to payment stablecoin liabilities or general creditors (which is not an obligation described in clause (v)).(v)Any obligation to shareholders or members arising as a result of their status as shareholders or members (including any holding company or any shareholder or creditor of such company).(B)

Rehypothecation of payment stablecoin reserves

A person who violates section 4 shall not be considered to have a secured claim under subparagraph (A) or State law.(C)

Effect on State law

(i)

In general

The provisions of subparagraph (A) shall not supersede the law of any State except to the extent such law is inconsistent with the provisions of such subparagraph, and then only to the extent of the inconsistency.(ii)

Procedure for determination of inconsistency

Upon the Corporation’s own motion or upon the request of any person with a claim described in subparagraph (A) or any State which is submitted to the Corporation in accordance with procedures which the Corporation shall prescribe, the Corporation shall determine whether any provision of the law of any State is inconsistent with any provision of subparagraph (A) and the extent of any such inconsistency.(iii)

Judicial review

The final determination of the Corporation under clause (ii) shall be subject to judicial review under chapter 7 of title 5, United States Code.(D)

Accounting report

Any distribution by the Corporation in connection with any claim described in subparagraph (A)(v) shall be accompanied by the accounting report required under paragraph (15)(B).(12)

Suspension of legal actions

(A)In general. After the appointment of the Corporation as conservator or receiver for a payment stablecoin issuer, the Corporation may request a stay for a period not to exceed—(i)45 days, in the case of the Corporation as conservator; and(ii)90 days, in the case of the Corporation as receiver,

in any judicial action or proceeding to which the issuer is or becomes a party.

(B)

Grant of stay by all courts required

Upon receipt of a request by the Corporation as conservator or receiver pursuant to subparagraph (A) for a stay of any judicial action or proceeding in any court with jurisdiction of such action or proceeding, the court shall grant such stay as to all parties.(13)

Additional rights and duties

(A)

Prior final adjudication

The Corporation shall abide by any final unappealable judgment of any court of competent jurisdiction which was rendered before the appointment of the Corporation as conservator or receiver.(B)

Rights and remedies of conservator or receiver

In the event of any appealable judgment, the Corporation as conservator or receiver shall—(i)have all the rights and remedies available to the payment stablecoin issuer (before the appointment of such conservator or receiver) and the Corporation in its corporate capacity, including removal to Federal court and all appellate rights; and(ii)not be required to post any bond in order to pursue such remedies.(C)

No attachment or execution

No attachment or execution may issue by any court upon assets in the possession of the Corporation as receiver.(D)

Limitation on judicial review

Except as otherwise provided in this subsection, no court shall have jurisdiction over—(i)any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets of a payment stablecoin issuer for which the Corporation has been appointed receiver, including assets which the Corporation may acquire from itself as such receiver; or(ii)any claim relating to any act or omission of such issuer or the Corporation as receiver.(E)

Disposition of assets

In exercising any right, power, privilege, or authority as conservator or receiver in connection with any sale or disposition of assets of any payment stablecoin issuer for which the Corporation has been appointed conservator or receiver, the Corporation shall conduct its operations in a manner which—(i)maximizes the net present value return from the sale or disposition of such assets;(ii)minimizes the amount of any loss realized in the resolution of cases;(iii)ensures adequate competition and fair and consistent treatment of offerors; and(iv)prohibits discrimination on the basis of race, sex, or ethnic groups in the solicitation and consideration of offers.(14)

Statute of limitations for actions brought by conservator or receiver

(A)

In general

Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the Corporation as conservator or receiver shall be—(i)in the case of any contract claim, the longer of—(I)the 6-year period beginning on the date the claim accrues; or(II)the period applicable under State law; and(ii)in the case of any tort claim, the longer of—(I)the 3-year period beginning on the date the claim accrues; or(II)the period applicable under State law.(B)

Determination of the date on which a claim accrues

For purposes of subparagraph (A), the date on which the statute of limitations begins to run on any claim described in such subparagraph shall be the later of—(i)the date of the appointment of the Corporation as conservator or receiver; or(ii)the date on which the cause of action accrues.(C)

Revival of expired State causes of action

(i)

In general

In the case of any tort claim described in clause (ii) for which the statute of limitations applicable under State law with respect to such claim has expired not more than 5 years before the appointment of the Corporation as conservator or receiver, the Corporation may bring an action as conservator or receiver on such claim without regard to the expiration of the statute of limitations applicable under State law.(ii)

Claims described

A tort claim referred to in clause (i) is a claim arising from fraud, intentional misconduct resulting in unjust enrichment, or intentional misconduct resulting in substantial loss to the institution.(15)

Accounting and recordkeeping requirements

(A)

In general

The Corporation as conservator or receiver shall, consistent with the accounting and reporting practices and procedures established by the Corporation, maintain a full accounting of each conservatorship and receivership or other disposition of issuers in default.(B)

Annual accounting or report

With respect to each conservatorship or receivership to which the Corporation was appointed, the Corporation shall make an annual accounting or report, as appropriate, available to the Secretary of the Treasury, the Comptroller General of the United States, and the authority that appointed the Corporation as conservator or receiver.(C)

Availability of reports

Any report prepared pursuant to subparagraph (B) shall be made available by the Corporation upon request to any shareholder of the payment stablecoin issuer for which the Corporation was appointed conservator or receiver or any other member of the public.(D)

Recordkeeping requirement

(i)

In general

Except as provided in clause (ii), after the end of the 6-year period beginning on the date the Corporation is appointed as receiver of a payment stablecoin issuer, the Corporation may destroy any records of such institution which the Corporation, in the Corporation’s discretion, determines to be unnecessary unless directed not to do so by a court of competent jurisdiction or governmental agency, or otherwise prohibited by law.(ii)

Old records

Notwithstanding clause (i), the Corporation may destroy records of a payment stablecoin issuer which are at least 10 years old as of the date on which the Corporation is appointed as the receiver of such payment stablecoin issuer in accordance with clause (i) at any time after such appointment is final, without regard to the 6-year period of limitation contained in clause (i).(16)

Fraudulent transfers

(A)

In general

The Corporation, as conservator or receiver for a payment stablecoin issuer, may avoid a transfer of any interest of an institution-affiliated party, or any person who the Corporation determines is a debtor of the issuer, in property, or any obligation incurred by such party or person, that was made within 5 years of the date on which the Corporation was appointed conservator or receiver if such party or person voluntarily or involuntarily made such transfer or incurred such liability with the intent to hinder, delay, or defraud the payment stablecoin issuer, the Corporation, Board, Comptroller, or a State bank supervisor.(B)

Right of recovery

To the extent a transfer is avoided under subparagraph (A), the Corporation may recover, for the benefit of the payment stablecoin issuer, the property transferred, or, if a court so orders, the value of such property (at the time of such transfer) from—(i)the initial transferee of such transfer or the institution-affiliated party or person for whose benefit such transfer was made; or(ii)any immediate or mediate transferee of any such initial transferee.(C)

Rights of transferee or obligee

The Corporation may not recover under subparagraph (B) from—(i)any transferee that takes for value, including satisfaction or securing of a present or antecedent debt, in good faith; or(ii)any immediate or mediate good faith transferee of such transferee.(D)

Rights in bankruptcy

The rights under this paragraph of the Corporation shall be superior to any rights of a trustee or any other party (other than any party which is a Federal agency) under title 11, United States Code.(17)

Attachment of assets and other injunctive relief

Subject to paragraph (18), any court of competent jurisdiction may, at the request of the Corporation (in the Corporation’s capacity as conservator or receiver for any payment stablecoin issuer or in the Corporation’s corporate capacity with respect to any asset acquired or liability assumed by the Corporation), issue an order in accordance with Rule 65 of the Federal Rules of Civil Procedure, including an order placing the assets of any person designated by the Corporation under the control of the court and appointing a trustee to hold such assets.(18)

Standards

(A)

Showing

Rule 65 of the Federal Rules of Civil Procedure shall apply with respect to any proceeding under paragraph (17) without regard to the requirement of such rule that the applicant show that the injury, loss, or damage is irreparable and immediate.(B)

State proceeding

If, in the case of any proceeding in a State court, the court determines that rules of civil procedure available under the laws of such State provide substantially similar protections to such party’s right to due process as Rule 65 (as modified with respect to such proceeding by subparagraph (A)), the relief sought by the Corporation pursuant to paragraph (17) may be requested under the laws of such State.(19)

Treatment of claims arising from breach of contracts executed by the receiver or conservator

(A)

In general

Notwithstanding any other provision of this subsection, any final and unappealable judgment for monetary damages entered against the Corporation as receiver or conservator for a payment stablecoin issuer for the breach of an agreement executed or approved by the Corporation after the date of its appointment shall be paid as an administrative expense of the receiver or conservator. (B)

Rule of construction

Nothing in this paragraph shall be construed to limit the power of the Corporation as receiver or conservator to exercise any rights under contract or law, including to terminate, breach, cancel, or otherwise discontinue such agreement.(f)

Provisions relating to contracts entered into before appointment of conservator or receiver

(1)

Authority to repudiate contracts

In addition to any other rights the Corporation as conservator or receiver may have, the Corporation may disaffirm or repudiate any contract or lease—(A)to which the issuer is a party;(B)the performance of which the Corporation, in the discretion of the Corporation, determines to be burdensome; and(C)the disaffirmance or repudiation of which the Corporation determines, in the discretion of the Corporation, will promote the orderly administration of the affairs of the issuer.(2)

Timing of repudiation

The Corporation as conservator or receiver appointed for any payment stablecoin issuer in accordance with subsection (d), shall determine whether or not to exercise the rights of repudiation under this subsection within a reasonable period following such appointment.(3)

Claims for damages for repudiation

(A)

In general

Except as otherwise provided in subparagraph (C) and paragraphs (4), (5), and (6), the liability of the Corporation as conservator or receiver for the disaffirmance or repudiation of any contract pursuant to paragraph (1) shall be—(i)limited to actual direct compensatory damages; and(ii)determined as of—(I)the date of the appointment of the Corporation as conservator or receiver; or(II)in the case of any contract or agreement referred to in paragraph (8), the date of the disaffirmance or repudiation of such contract or agreement.(B)

No liability for other damages

For purposes of subparagraph (A), the term actual direct compensatory damages does not include—(i)punitive or exemplary damages;(ii)damages for lost profits or opportunity; or(iii)damages for pain and suffering.(C)

Measure of damages for repudiation of financial contracts

In the case of any qualified financial contract or agreement to which paragraph (8) applies, compensatory damages shall be—(i)deemed to include normal and reasonable costs of cover or other reasonable measures of damages utilized in the industries for such contract and agreement claims; and(ii)paid in accordance with this subsection and subsection (g) except as otherwise specifically provided in this section.(4)

Leases under which the issuer is the lessee

(A)

In general

If the Corporation as conservator or receiver disaffirms or repudiates a lease under which the payment stablecoin issuer was the lessee, the conservator or receiver shall not be liable for any damages (other than damages determined pursuant to subparagraph (B)) for the disaffirmance or repudiation of such lease.(B)

Payments of rent

Notwithstanding subparagraph (A), the lessor under a lease to which such subparagraph applies shall—(i)unless the lessor is in default or breach of the terms of the lease, be entitled to the contractual rent accruing before the later of the date—(I)the notice of disaffirmance or repudiation is mailed; or(II)the disaffirmance or repudiation becomes effective;(ii)have no claim for damages under any acceleration clause or other penalty provision in the lease; and(iii)have a claim for any unpaid rent, subject to all appropriate offsets and defenses, due as of the date of the appointment which shall be paid in accordance with this subsection and subsection (g).(5)

Leases under which the issuer is the lessor

(A)

In general

If the Corporation as conservator or receiver repudiates an unexpired written lease of real property of the payment stablecoin issuer under which the issuer is the lessor and the lessee is not, as of the date of such repudiation, in default, the lessee under such lease may either—(i)treat the lease as terminated by such repudiation; or(ii)remain in possession of the leasehold interest for the balance of the term of the lease unless the lessee defaults under the terms of the lease after the date of such repudiation.(B)

Provisions applicable to lessee remaining in possession

If any lessee under a lease described in subparagraph (A) remains in possession of a leasehold interest pursuant to clause (ii) of such subparagraph—(i)the lessee—(I)shall continue to pay the contractual rent pursuant to the terms of the lease after the date of the repudiation of such lease; and(II)may offset against any rent payment which accrues after the date of the repudiation of the lease, any damages which accrue after such date due to the nonperformance of any obligation of the payment stablecoin issuer under the lease after such date; and(ii)the Corporation as conservator or receiver shall not be liable to the lessee for any damages arising after such date as a result of the repudiation other than the amount of any offset allowed under clause (i)(II).(6)

Contracts for the sale of real property

(A)

In general

If the Corporation as conservator or receiver repudiates any contract (which meets the requirements of each paragraph of section 13(e)of the Federal Deposit Insurance Act (12 U.S.C. 1823(e)) for the sale of real property and the purchaser of such real property under such contract is in possession and is not, as of the date of such repudiation, in default, such purchaser may either—(i)treat the contract as terminated by such repudiation; or(ii)remain in possession of such real property.(B)

Provisions applicable to purchaser remaining in possession

If any purchaser of real property under any contract described in subparagraph (A) remains in possession of such property pursuant to clause (ii) of such subparagraph—(i)the purchaser—(I)shall continue to make all payments due under the contract after the date of the repudiation of the contract; and(II)may offset against any such payments any damages which accrue after such date due to the nonperformance (after such date) of any obligation of the payment stablecoin issuer under the contract; and(ii)the Corporation as conservator or receiver shall—(I)not be liable to the purchaser for any damages arising after such date as a result of the repudiation other than the amount of any offset allowed under clause (i)(II);(II)deliver title to the purchaser in accordance with the provisions of the contract; and(III)have no obligation under the contract other than the performance required under subclause (II).(C)

Assignment and sale allowed

(i)

In general

No provision of this paragraph shall be construed as limiting the right of the Corporation as conservator or receiver to assign the contract described in subparagraph (A) and sell the property subject to the contract and the provisions of this paragraph.(ii)

No liability after assignment and sale

If an assignment and sale described in clause (i) is consummated, the Corporation as conservator or receiver shall have no further liability under the contract described in subparagraph (A) or with respect to the real property which was the subject of such contract.(7)

Provisions applicable to service contracts

(A)

Services performed before appointment

In the case of any contract for services between any person and any payment stablecoin issuer for which the Corporation has been appointed conservator or receiver, any claim of such person for services performed before the appointment of the Corporation shall be—(i)a claim to be paid in accordance with subsections (e) and (g); and(ii)deemed to have arisen as of the date the Corporation was appointed conservator or receiver.(B)

Services performed after appointment and prior to repudiation

If, in the case of any contract for services described in subparagraph (A), the conservator or receiver accepts performance by the other person before the Corporation as conservator or receiver makes any determination to exercise the right of repudiation of such contract under this section—(i)the other party shall be paid under the terms of the contract for the services performed; and(ii)the amount of such payment shall be treated as an administrative expense of the conservatorship or receivership.(C)

Acceptance of performance no bar to subsequent repudiation

The acceptance by the Corporation as conservator or receiver of services referred to in subparagraph (B) in connection with a contract described in such subparagraph shall not affect the right of the Corporation as conservator or receiver to repudiate such contract under this section at any time after such performance.(8)

Certain qualified financial contracts

(A)

Rights of parties to contracts

Subject to paragraphs (9) and (10) of this subsection and notwithstanding any other provision of Federal or State law (other than subsection (e)(9) of this section and section 13(e)of the Federal Deposit Insurance Act (12 U.S.C. 1823(e)), no person shall be stayed or prohibited from exercising—(i)any right such person has to cause the termination, liquidation, or acceleration of any qualified financial contract with a payment stablecoin issuer which arises upon the appointment of the Corporation as receiver for such issuer at any time after such appointment;(ii)any right under any security agreement or arrangement or other credit enhancement related to one or more qualified financial contracts described in clause (i); or(iii)any right to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with 1 or more contracts and agreements described in clause (i), including any master agreement for such contracts or agreements.(B)

Applicability of other provisions

Subsection (e)(12) shall apply in the case of any judicial action or proceeding brought against the Corporation as receiver referred to in subparagraph (A), or the payment stablecoin issuer for which the Corporation was appointed receiver, by any party to a contract or agreement described in subparagraph (A)(i) with such institution.(C)

Certain transfers not avoidable

(i)

In general

Notwithstanding paragraph (11), section 5242 of the Revised Statutes of the United States (12 U.S.C. 91), or any other Federal or State law relating to the avoidance of preferential or fraudulent transfers, the Corporation, whether acting as such or as conservator or receiver of a payment stablecoin issuer, may not avoid any transfer of money or other property in connection with any qualified financial contract with a payment stablecoin issuer.(ii)

Exception for certain transfers

Clause (i) shall not apply to any transfer of money or other property in connection with any qualified financial contract with a payment stablecoin issuer if the Corporation determines that the transferee had actual intent to hinder, delay, or defraud such institution, the creditors of such institution, or any conservator or receiver appointed for such institution.(D)

Certain contracts and agreements defined

For purposes of this subsection, the following definitions shall apply:(i)

Qualified financial contract

The term qualified financial contract means any securities contract, commodity contract, forward contract, repurchase agreement, swap agreement, and any similar agreement that the Corporation determines by regulation, resolution or order to be a qualified financial contract for purposes of this paragraph.(ii)

Securities contract

The term securities contract—(I)means a contract for the purchase, sale, or loan of a security, a certificate of deposit, a mortgage loan, any interest in a mortgage loan, a group or index of securities, certificates of deposit, or mortgage loans or interests therein (including any interest therein or based on the value thereof) or any option on any of the foregoing, including any option to purchase or sell any such security, certificate of deposit, mortgage loan, interest, group or index, or option, and including any repurchase or reverse repurchase transaction on any such security, certificate of deposit, mortgage loan, interest, group or index, or option (whether or not such repurchase or reverse repurchase transaction is a repurchase agreement);(II)does not include any purchase, sale, or repurchase obligation under a participation in a commercial mortgage loan unless the Corporation determines by regulation, resolution, or order to include any such agreement within the meaning of such term;(III)means any option entered into on a national securities exchange relating to foreign currencies;(IV)means the guarantee (including by novation) by or to any securities clearing agency of any settlement of cash, securities, certificates of deposit, mortgage loans or interests therein, group or index of securities, certificates of deposit, or mortgage loans or interests therein (including any interest therein or based on the value thereof) or option on any of the foregoing, including any option to purchase or sell any such security, certificate of deposit, mortgage loan, interest, group or index, or option (whether or not such settlement is in connection with any agreement or transaction referred to in subclauses (I) through (XII) (other than subclause (II));(V)means any margin loan;(VI)means any extension of credit for the clearance or settlement of securities transactions;(VII)means any loan transaction coupled with a securities collar transaction, any prepaid securities forward transaction, or any total return swap transaction coupled with a securities sale transaction;(VIII)means any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;(IX)means any combination of the agreements or transactions referred to in this clause;(X)means any option to enter into any agreement or transaction referred to in this clause;(XI)means a master agreement that provides for an agreement or transaction referred to in subclause (I), (III), (IV), (V), (VI), (VII), (VIII), (IX), or (X), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a securities contract under this clause, except that the master agreement shall be considered to be a securities contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (III), (IV), (V), (VI), (VII), (VIII), (IX), or (X); and(XII)means any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in this clause, including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause.(iii)

Commodity contract

The term commodity contract means—(I)with respect to a futures commission merchant, a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade;(II)with respect to a foreign futures commission merchant, a foreign future;(III)with respect to a leverage transaction merchant, a leverage transaction;(IV)with respect to a clearing organization, a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization, or commodity option traded on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization;(V)with respect to a commodity options dealer, a commodity option;(VI)any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;(VII)any combination of the agreements or transactions referred to in this clause;(VIII)any option to enter into any agreement or transaction referred to in this clause;(IX)a master agreement that provides for an agreement or transaction referred to in subclause (I), (II), (III), (IV), (V), (VI), (VII), or (VIII), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a commodity contract under this clause, except that the master agreement shall be considered to be a commodity contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (II), (III), (IV), (V), (VI), (VII), or (VIII); or(X)any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in this clause, including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause.(iv)

Forward contract

The term forward contract means—(I)a contract (other than a commodity contract) for the purchase, sale, or transfer of a commodity or any similar good, article, service, right, or interest which is presently or in the future becomes the subject of dealing in the forward contract trade, or product or byproduct thereof, with a maturity date more than 2 days after the date the contract is entered into, including, a repurchase or reverse repurchase transaction (whether or not such repurchase or reverse repurchase transaction is a repurchase agreement), consignment, lease, swap, hedge transaction, deposit, loan, option, allocated transaction, unallocated transaction, or any other similar agreement;(II)any combination of agreements or transactions referred to in subclauses (I) and (III);(III)any option to enter into any agreement or transaction referred to in subclause (I) or (II);(IV)a master agreement that provides for an agreement or transaction referred to in subclause (I), (II), or (III), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a forward contract under this clause, except that the master agreement shall be considered to be a forward contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (II), or (III); or(V)any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (II), (III), or (IV), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.(v)

Repurchase agreement

The term repurchase agreement (which definition also applies to a reverse repurchase agreement)—(I)means an agreement, including related terms, which provides for the transfer of 1 or more certificates of deposit, mortgage related securities (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), mortgage loans, interests in mortgage-related securities or mortgage loans, eligible bankers’ acceptances, qualified foreign government securities or securities that are direct obligations of, or that are fully guaranteed by, the United States or any agency of the United States against the transfer of funds by the transferee of such certificates of deposit, eligible bankers’ acceptances, securities, mortgage loans, or interests with a simultaneous agreement by such transferee to transfer to the transferor thereof certificates of deposit, eligible bankers’ acceptances, securities, mortgage loans, or interests as described above, at a date certain not later than 1 year after such transfers or on demand, against the transfer of funds, or any other similar agreement;(II)does not include any repurchase obligation under a participation in a commercial mortgage loan unless the Corporation determines by regulation, resolution, or order to include any such participation within the meaning of such term;(III)means any combination of agreements or transactions referred to in subclauses (I) and (IV);(IV)means any option to enter into any agreement or transaction referred to in subclause (I) or (III);(V)means a master agreement that provides for an agreement or transaction referred to in subclause (I), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a repurchase agreement under this clause, except that the master agreement shall be considered to be a repurchase agreement under this subclause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (III), or (IV); and(VI)means any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (III), (IV), or (V), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.

For purposes of this clause, the term qualified foreign government security means a security that is a direct obligation of, or that is fully guaranteed by, the central government of a member of the Organization for Economic Cooperation and Development (as determined by regulation or order adopted by the Board).

(vi)

Swap agreement

The term swap agreement means—(I)any agreement, including the terms and conditions incorporated by reference in any such agreement, which is an interest rate swap, option, future, or forward agreement, including a rate floor, rate cap, rate collar, cross-currency rate swap, and basis swap; a spot, same day-tomorrow, tomorrow-next, forward, or other foreign exchange, precious metals, or other commodity agreement; a currency swap, option, future, or forward agreement; an equity index or equity swap, option, future, or forward agreement; a debt index or debt swap, option, future, or forward agreement; a total return, credit spread or credit swap, option, future, or forward agreement; a commodity index or commodity swap, option, future, or forward agreement; weather swap, option, future, or forward agreement; an emissions swap, option, future, or forward agreement; or an inflation swap, option, future, or forward agreement;(II)any agreement or transaction that is similar to any other agreement or transaction referred to in this clause and that is of a type that has been, is presently, or in the future becomes, the subject of recurrent dealings in the swap or other derivatives markets (including terms and conditions incorporated by reference in such agreement) and that is a forward, swap, future, option, or spot transaction on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, quantitative measures associated with an occurrence, extent of an occurrence, or contingency associated with a financial, commercial, or economic consequence, or economic or financial indices or measures of economic or financial risk or value;(III)any combination of agreements or transactions referred to in this clause;(IV)any option to enter into any agreement or transaction referred to in this clause;(V)a master agreement that provides for an agreement or transaction referred to in subclause (I), (II), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement contains an agreement or transaction that is not a swap agreement under this clause, except that the master agreement shall be considered to be a swap agreement under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (II), (III), or (IV); and(VI)any security agreement or arrangement or other credit enhancement related to any agreements or transactions referred to in subclause (I), (II), (III), (IV), or (V), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.

Such term is applicable for purposes of this subsection only and shall not be construed or applied so as to challenge or affect the characterization, definition, or treatment of any swap agreement under any other statute, regulation, or rule, including the Gramm-Leach-Bliley Act (Public Law 106–102; 113 Stat. 1338), the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27 et seq.), the securities laws (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), and the Commodity Exchange Act (7 U.S.C. 1 et seq.).

(vii)

Treatment of master agreement as one agreement

Any master agreement for any contract or agreement described in any preceding clause of this subparagraph (or any master agreement for such master agreement or agreements), together with all supplements to such master agreement, shall be treated as a single agreement and a single qualified financial contract. If a master agreement contains provisions relating to agreements or transactions that are not themselves qualified financial contracts, the master agreement shall be deemed to be a qualified financial contract only with respect to those transactions that are themselves qualified financial contracts.(viii)

Transfer

The term transfer means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property, including retention of title as a security interest and foreclosure of the payment stablecoin issuer’s equity of redemption.(ix)

Person

The term person includes any governmental entity in addition to any entity included in the definition of such term in section 1 of title 1, United States Code.(E)

Certain protections in event of appointment of conservator

Notwithstanding any other provision of Federal or State law (other than subsections (e)(9) and (f)(10) of this section, and section 13(e) of the Federal Deposit Insurance Act (12 U.S.C. 1823(e))), no person shall be stayed or prohibited from exercising—(i)any right such person has to cause the termination, liquidation, or acceleration of any qualified financial contract with a payment stablecoin issuer in a conservatorship based upon a default under such financial contract which is enforceable under applicable non-insolvency law;(ii)any right under any security agreement or arrangement or other credit enhancement related to one or more qualified financial contracts described in clause (i); or(iii)any right to offset or net out any termination values, payment amounts, or other transfer obligations arising under or in connection with such qualified financial contracts.(F)

Clarification

No provision of law shall be construed as limiting the right or power of the Corporation, or authorizing any court or agency to limit or delay, in any manner, the right or power of the Corporation to transfer any qualified financial contract in accordance with paragraphs (9) and (10) of this subsection or to disaffirm or repudiate any such contract in accordance with paragraph (1).(G)

Walkaway clauses not effective

(i)

In general

Notwithstanding the provisions of subparagraphs (A) and (E), and sections 403 and 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4403, 4404), no walkaway clause shall be enforceable in a qualified financial contract of a payment stablecoin issuer in default.(ii)

Limited suspension of certain obligations

In the case of a qualified financial contract referred to in clause (i), any payment or delivery obligations otherwise due from a party pursuant to the qualified financial contract shall be suspended from the time the Corporation is appointed as receiver until the earlier of—(I)the time such party receives notice that such contract has been transferred pursuant to paragraph (9)(A); or(II)5:00 p.m. (eastern time) on the business day following the date of the appointment of the Corporation as receiver.(iii)

Walkaway clause defined

For purposes of this subparagraph, the term walkaway clause means any provision in a qualified financial contract that suspends, conditions, or extinguishes a payment obligation of a party, in whole or in part, or does not create a payment obligation of a party that would otherwise exist, solely because of such party’s status as a nondefaulting party in connection with the insolvency of a payment stablecoin issuer that is a party to the contract or the appointment of or the exercise of rights or powers by the Corporation as conservator or receiver of such issuer, and not as a result of a party’s exercise of any right to offset, setoff, or net obligations that exist under the contract, any other contract between those parties, or applicable law.(H)

Recordkeeping requirements

The Corporation, in consultation with the Board, Comptroller and State bank supervisors, may prescribe regulations requiring more detailed recordkeeping by a payment stablecoin issuer with respect to qualified financial contracts (including market valuations) if the condition of such payment stablecoin issuer warrants it.(9)

Transfer of qualified financial contracts

(A)In general. In making any transfer of assets or liabilities of a payment stablecoin issuer in default which includes any qualified financial contract, the Corporation as conservator or receiver for such issuer shall either—(i)transfer to one financial institution, other than a financial institution for which a conservator, receiver, trustee in bankruptcy, or other legal custodian has been appointed or which is otherwise the subject of a bankruptcy or insolvency proceeding—(I)all qualified financial contracts between any person or any affiliate of such person and the payment stablecoin issuer in default;(II)all claims of such person or any affiliate of such person against such issuer under any such contract (other than any claim which, under the terms of any such contract, is subordinated to the claims of general unsecured creditors of such issuer);(III)all claims of such payment stablecoin issuer against such person or any affiliate of such person under any such contract; and(IV)all property securing or any other credit enhancement for any contract described in subclause (I) or any claim described in subclause (II) or (III) under any such contract; or(ii)transfer none of the qualified financial contracts, claims, property or other credit enhancement referred to in clause (i) (with respect to such person and any affiliate of such person).(B)

Transfer to a foreign bank, foreign financial institution, or branch or agency of a foreign bank or financial institution

In transferring any qualified financial contracts and related claims and property under subparagraph (A)(i), the Corporation as conservator or receiver for the payment stablecoin issuer shall not make such transfer to a foreign bank, financial institution organized under the laws of a foreign country, or a branch or agency of a foreign bank or financial institution unless, under the law applicable to such bank, financial institution, branch or agency, to the qualified financial contracts, and to any netting contract, any security agreement or arrangement or other credit enhancement related to one or more qualified financial contracts, the contractual rights of the parties to such qualified financial contracts, netting contracts, security agreements or arrangements, or other credit enhancements are enforceable substantially to the same extent as permitted under this section.(C)

Transfer of contracts subject to the rules of a clearing organization

In the event that the Corporation as conservator or receiver transfers any qualified financial contract and related claims, property, and credit enhancements pursuant to subparagraph (A)(i) and such contract is cleared by or subject to the rules of a clearing organization, the clearing organization shall not be required to accept the transferee as a member by virtue of the transfer.(D)

Definitions

For purposes of this paragraph—(i)the term financial institution means a broker or dealer, a depository institution, a futures commission merchant, or any other institution, as determined by the Corporation by regulation to be a financial institution; and(ii)the term clearing organization has the meaning given the term in section 402 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4402).(10)

Notification of transfer

(A)

In general

If the Corporation as conservator or receiver for a payment stablecoin issuer in default makes any transfer of the assets and liabilities of such institution, and the transfer includes any qualified financial contract, the conservator or receiver shall notify any person who is a party to any such contract of such transfer by 5:00 p.m. (eastern time) on the business day following the date of the appointment of the Corporation as receiver in the case of a receivership, or the business day following such transfer in the case of a conservatorship.(B)

Certain rights not enforceable

(i)

Receivership

A person who is a party to a qualified financial contract with a payment stablecoin issuer may not exercise any right that such person has to terminate, liquidate, or net such contract under paragraph (8)(A) of this subsection or section 403 or 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4403, 4404), solely by reason of or incidental to the appointment of the Corporation as receiver for the payment stablecoin issuer (or the insolvency or financial condition of the issuer for which the receiver has been appointed)—(I)until 5:00 p.m. (eastern time) on the business day following the date of the appointment of the receiver; or(II)after the person has received notice that the contract has been transferred pursuant to paragraph (9)(A).(ii)

Conservatorship

A person who is a party to a qualified financial contract with a payment stablecoin issuer may not exercise any right that such person has to terminate, liquidate, or net such contract under paragraph (8)(E) of this subsection or section 403 or 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4403, 4404), solely by reason of or incidental to the appointment of the Corporation as conservator for the payment stablecoin issuer (or the insolvency or financial condition of the issuer for which the Corporation has been appointed conservator).(iii)

Notice

For purposes of this paragraph, the Corporation as receiver or conservator of a payment stablecoin issuer shall be deemed to have notified a person who is a party to a qualified financial contract with such issuer if the Corporation has taken steps that are reasonably calculated to provide notice to such person by the time specified in subparagraph (A).(C)

Business day defined

For purposes of this paragraph, the term business day means any day other than any Saturday, Sunday, or any day on which either the New York Stock Exchange or the Federal Reserve Bank of New York is closed.(11)

Disaffirmance or repudiation of qualified financial contracts

In exercising the rights of disaffirmance or repudiation of a conservator or receiver with respect to any qualified financial contract to which a payment stablecoin issuer is a party, the Corporation as conservator or receiver for such issuer shall either—(A)disaffirm or repudiate all qualified financial contracts between—(i)any person or any affiliate of such person; and(ii)the payment stablecoin issuer in default; or(B)disaffirm or repudiate none of the qualified financial contracts referred to in subparagraph (A) (with respect to such person or any affiliate of such person).(12)

Certain security interests not avoidable

No provision of this subsection shall be construed as permitting the avoidance of any legally enforceable or perfected security interest in any of the assets of any payment stablecoin issuer except where such an interest is taken in contemplation of the issuer’s insolvency or with the intent to hinder, delay, or defraud the issuer or the creditors of such issuer.(13)

Authority to enforce contracts

(A)

In general

The Corporation as conservator or receiver may enforce any contract, other than a director’s or officer’s liability insurance contract or a bond, entered into by the payment stablecoin issuer notwithstanding any provision of the contract providing for termination, default, acceleration, or exercise of rights upon, or solely by reason of, insolvency or the appointment of or the exercise of rights or powers by the Corporation as conservator or receiver.(B)

Certain rights not affected

No provision of this paragraph may be construed as impairing or affecting any right of the Corporation as conservator or receiver to enforce or recover under a director’s or officer’s liability insurance contract or bond under other applicable law.(C)

Consent requirement

(i)

In general

Except as otherwise provided by this section or section 15 of the Federal Deposit Insurance Act (12 U.S.C. 1825), no person may exercise any right or power to terminate, accelerate, or declare a default under any contract to which the payment stablecoin issuer is a party, or to obtain possession of or exercise control over any property of the issuer or affect any contractual rights of the issuer, without the consent of the Corporation as conservator or receiver, as appropriate, during the 45-day period beginning on the date of the appointment of the Corporation as conservator, or during the 90-day period beginning on the date of the appointment of the Corporation as receiver, as applicable.(ii)

Certain exceptions

No provision of this subparagraph shall apply to a director or officer liability insurance contract or bond, to the rights of parties to certain qualified financial contracts pursuant to paragraph (8), or to the rights of parties to netting contracts pursuant to subtitle A of title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4401 et seq.), or shall be construed as permitting the Corporation as conservator or receiver to fail to comply with otherwise enforceable provisions of such contract.(iii)

Rule of construction

Nothing in this subparagraph shall be construed to limit or otherwise affect the applicability of title 11, United States Code.(14)

Savings clause

The meanings of terms used in this subsection are applicable for purposes of this subsection only, and shall not be construed or applied so as to challenge or affect the characterization, definition, or treatment of any similar terms under any other statute, regulation, or rule, including the Gramm-Leach-Bliley Act (Public Law 106–102; 113 Stat. 1338), the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27 et seq.), the securities laws (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)), and the Commodity Exchange Act (7 U.S.C. 1 et seq.).(g)

Payment of stablecoin liabilities

(1)

In general

In case of the liquidation of, or other closing or winding up of the affairs of a payment stablecoin issuer, payment of the outstanding payment stablecoin liabilities of the issuer shall be made by the Corporation as soon as possible, subject to the provisions of subsection (h), either by cash or by making available to each depositor a transferred deposit in an insured depository institution.(2)

Proof of claims

The Corporation, in its discretion, may require proof of claims to be filed and may approve or reject such claims for payment stablecoin liabilities.(3)

Resolution of disputes

A determination by the Corporation regarding any claim for payment of stablecoin liabilities shall be treated as a final determination for purposes of this section. In its discretion, the Corporation may promulgate regulations prescribing procedures for resolving any disputed claim.(4)

Review of Corporation determination

A final determination made by the Corporation regarding any claim for payment of stablecoin liabilities shall be a final agency action reviewable in accordance with chapter 7 of title 5, United States Code, by the United States district court for the Federal judicial district where the principal place of business of the payment stablecoin issuer is located.(5)

Statute of limitations

Any request for review of a final determination by the Corporation regarding any claim regarding payment of stablecoin liabilities shall be filed with the appropriate United States district court not later than 60 days after the date on which such determination is issued.(h)

Subrogation of Corporation

(1)

In general

Notwithstanding any other provision of Federal law, the law of any State, or the constitution of any State, the Corporation, upon the payment to any customer as provided in subsection (g) in connection with a payment stablecoin issuer described in such subsection or the assumption of payment stablecoin liabilities by another payment stablecoin issuer pursuant to this section, shall be subrogated to all rights of the customer against such issuer to the extent of such payment or assumption.(2)

Dividends on subrogated amounts

The subrogation of the Corporation under paragraph (1) with respect to any payment stablecoin issuer shall include the right on the part of the Corporation to receive the same dividends from the proceeds of the assets of such issuer and recoveries on account of stockholders’ liability as would have been payable to the customer on a claim for the stablecoin liability.(3)

Waiver of certain claims

With respect to a payment stablecoin issuer, the Corporation shall waive, in favor only of any person against whom stockholders’ individual liability may be asserted, any claim on account of such liability in excess of the liability, if any, to the issuer or its creditors, for the amount unpaid upon such stock in such issuer; but any such waiver shall be effected in such manner and on such terms and conditions as will not increase recoveries or dividends on account of claims to which the Corporation is not subrogated.(4)

Applicability of State law

Subject to subsection (e)(11), if the Corporation is appointed pursuant to subsection (d)(3), the rights of customers and other creditors of any State-chartered payment stablecoin issuer shall be determined in accordance with the applicable provisions of State law.(i)

Valuation of claims in default

(1)

In general

Notwithstanding any other provision of Federal law or the law of any State and regardless of the method which the Corporation determines to utilize with respect to a payment stablecoin issuer in default or in danger of default, including transactions authorized under subsection (o), this subsection shall govern the rights of the creditors (other than customers) of such institution.(2)

Maximum liability

The maximum liability of the Corporation, acting as receiver or in any other capacity, to any person having a claim against the receiver or the payment stablecoin issuer for which such receiver is appointed shall equal the amount such claimant would have received if the Corporation had liquidated the assets and liabilities of such institution without exercising the Corporation’s authority under subsection (o) of this section.(j)

Limitation on court action

Except as provided in this section, no court may take any action, except at the request of the Board of Directors of the Corporation by regulation or order, to restrain or affect the exercise of powers or functions of the Corporation as a conservator or a receiver.(k)

Liability of directors and officers

A director or officer of a payment stablecoin issuer may be held personally liable for monetary damages in any civil action by, on behalf of, or at the request or direction of the Corporation, which action is prosecuted wholly or partially for the benefit of the Corporation—(1)acting as conservator or receiver of such issuer;(2)acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed by such receiver or conservator; or(3)for gross negligence, including any similar conduct or conduct that demonstrates a greater disregard of a duty of care (than gross negligence) including intentional tortious conduct, as such terms are defined and determined under applicable State law, provided that nothing in this paragraph shall impair or affect any right of the Corporation under other applicable law.(l)

Damages

In any proceeding related to any claim against a payment stablecoin issuer’s director, officer, employee, agent, attorney, accountant, appraiser, or any other party employed by or providing services to a payment stablecoin issuer, recoverable damages determined to result from the improvident or otherwise improper use or investment of any payment stablecoin issuer’s assets shall include principal losses and appropriate interest.(m)

Bridge payment stablecoin issuers

(1)

Organization

(A)

Purpose

When 1 or more payment stablecoin issuers are in default, or when the Corporation anticipates that 1 or more payment stablecoin issuers may become in default, the Corporation may, in its discretion, organize, and the Office of the Comptroller of the Currency, with respect to 1 or more payment stablecoin issuers, shall charter, 1 or more depository institutions, as appropriate, with respect thereto with the powers and attributes of payment stablecoin issuers as applicable, subject to the provisions of this subsection, to be referred to as bridge payment stablecoin issuers.(B)

Authorities

Upon the granting of a charter to a bridge payment stablecoin issuer, the bridge issuer may—(i)assume such payment stablecoin assets and liabilities of the payment stablecoin issuer that is or are in default or in danger of default as the Corporation may, in its discretion, determine to be appropriate; and(ii)perform any other temporary function which the Corporation may, in its discretion, prescribe in accordance with this the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.).(C)

Articles of association

The articles of association and organization certificate of a bridge payment stablecoin issuer as approved by the Corporation shall be executed by 3 representatives designated by the Corporation.(D)

Interim directors

A bridge payment stablecoin issuer shall have an interim board of directors consisting of not fewer than 5 nor more than 10 members appointed by the Corporation.(E)

National bank or Federal savings association

A bridge payment stablecoin issuer shall be organized as a depository institution under the National Bank Act (12 U.S.C. 21 et seq.).(2)

Chartering

(A)

Conditions

A depository institution may be chartered by the Comptroller as a bridge payment stablecoin issuer only if the Board of Directors of the Corporation determines that—(i)the amount which is reasonably necessary to operate such bridge issuer will not exceed the amount which is reasonably necessary to save the cost of liquidating, including paying the liabilities of, 1 or more payment stablecoin issuers in default or in danger of default with respect to which the bridge payment stablecoin issuer is chartered;(ii)the continued operation of such payment stablecoin issuer or issuers in default or in danger of default with respect to which the bridge payment stablecoin issuer is chartered is essential to provide continued services to the customers of the issuer; or(iii)the continued operation of such payment stablecoin issuer or issuers in default or in danger of default with respect to which the bridge issuer is chartered is in the best interest of the customer of such issuer or issuers in default or in danger of default or the public.(B)

Insured national bank or Federal savings association

A bridge depository institution shall be a national payment stablecoin issuer from the time it is chartered by the Comptroller as a depository institution.(C)

Bridge bank treated as being in default for certain purposes

A bridge payment stablecoin issuer shall be treated as an issuer in default at such times and for such purposes as the Corporation may, in its discretion, determine.(D)

Management

A bridge payment stablecoin issuer, upon the granting of its charter, shall be under the management of a board of directors consisting of not fewer than 5 nor more than 10 members appointed by the Corporation.(E)

Bylaws

The board of directors of a bridge payment stablecoin issuer shall adopt such bylaws as may be approved by the Corporation.(3)

Transfer of assets and liabilities

(A)

In general

(i)

Transfer upon grant of charter

Upon the granting of a charter to a bridge payment stablecoin issuer pursuant to this subsection, the Corporation, as receiver, or any other receiver appointed with respect to any payment stablecoin issuer in default with respect to which the bridge payment stablecoin issuer is chartered may transfer any assets and liabilities of such issuer in default to the bridge issuer in accordance with paragraph (1).(ii)

Subsequent transfers

At any time after a charter is granted to a bridge payment stablecoin issuer, the Corporation, as receiver, or any other receiver appointed with respect to a payment stablecoin issuer in default may transfer any assets and liabilities of such issuer in default as the Corporation may, in its discretion, determine to be appropriate in accordance with paragraph (1).(iii)

Effective without approval

The transfer of any assets or liabilities of a payment stablecoin issuer in default transferred to a bridge payment stablecoin issuer shall be effective without any further approval under Federal or State law, assignment, or consent with respect thereto.(4)

Powers of bridge payment stablecoin issuers

Each bridge payment stablecoin issue chartered under this subsection shall have all corporate powers of, and be subject to the same provisions of law as, a payment stablecoin issuer that is a depository institution chartered by the Comptroller, as appropriate, except that—(A)the Corporation may—(i)remove the interim directors and directors of a bridge issuer;(ii)fix the compensation of members of the interim board of directors and the board of directors and senior management, as determined by the Corporation in its discretion, of a bridge issuer; and(iii)waive any requirement established under section 5145, 5146, 5147, 5148, or 5149 of the Revised Statutes (relating to directors of national banks) or section 31 of the Banking Act of 1933 (12 U.S.C. 71a) which would otherwise be applicable with respect to directors of a bridge issuer by operation of paragraph (2)(B);(B)the Corporation may indemnify the representatives for purposes of paragraph (1)(B) and the interim directors, directors, officers, employees, and agents of a bridge payment stablecoin issuer on such terms as the Corporation determines to be appropriate;(C)no requirement under any provision of law relating to the capital of a payment stablecoin issuer shall apply with respect to a bridge issuer;(D)the Comptroller of the Currency may establish a limitation on the extent to which any person may become indebted to a bridge issuer without regard to the amount of the bridge issuer’s capital or surplus;(E)(i)the board of directors of a bridge payment stablecoin issuer shall elect a chairperson who may also serve in the position of chief executive officer, except that such person shall not serve either as chairperson or as chief executive officer without the prior approval of the Corporation; and(ii)the board of directors of a bridge payment stablecoin issuer may appoint a chief executive officer who is not also the chairperson, except that such person shall not serve as chief executive officer without the prior approval of the Corporation;(F)the Comptroller shall waive any requirement for a fidelity bond with respect to a bridge payment stablecoin issuer at the request of the Corporation;(G)any judicial action to which a bridge payment stablecoin issuer becomes a party by virtue of its acquisition of any assets or assumption of any liabilities of a payment stablecoin issuer in default shall be stayed from further proceedings for a period of up to 45 days at the request of the bridge issuer;(H)no agreement which tends to diminish or defeat the right, title or interest of a bridge payment stablecoin issuer in any asset of a payment stablecoin issuer in default acquired by it shall be valid against the bridge issuer unless such agreement—(i)is in writing;(ii)was executed by such payment stablecoin issuer in default and the person or persons claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by such issuer in default;(iii)was approved by the board of directors of such payment stablecoin issuer in default, which approval shall be reflected in the minutes of said board; and(iv)has been, continuously from the time of its execution, an official record of such payment stablecoin issuer in default; and(I)except with the prior approval of the Corporation, a bridge payment stablecoin issuer may not, in any transaction or series of transactions, issue capital stock or be a party to any merger, consolidation, disposition of assets or liabilities, sale or exchange of capital stock, or similar transaction, or change its charter.(5)

Capital

(A)

No capital required

The Corporation shall not be required to—(i)issue any capital stock on behalf of a bridge payment stablecoin issuer chartered under this subsection; or(ii)purchase any capital stock of a bridge payment stablecoin issuer.(B)

Capital of insolvent institution

Upon the organization of a bridge payment stablecoin issuer, the capital of the insolvent payment stablecoin issuer shall be used to fund the operations of the bridge issuer.(C)

Authority to issue capital stock

Whenever the Board of Directors of the Corporation determines it is advisable to do so, the Corporation shall cause capital stock of a bridge payment stablecoin issuer to be issued and offered for sale in such amounts and on such terms and conditions as the Corporation may, in its discretion, determine.(D)

Capital levels

A bridge payment stablecoin issuer shall not be considered undercapitalized under any other provision of Federal law.(6)

No Federal status

(A)

Agency status

A bridge payment stablecoin issuer shall not be considered an agency, establishment, or instrumentality of the United States.(B)

Employee status

Representatives for purposes of paragraph (1)(C), interim directors, directors, officers, employees, or agents of a bridge payment stablecoin issuer shall not be considered, solely by virtue of service in any such capacity, officers or employees of the United States. Any employee of the Corporation or of any Federal instrumentality who serves at the request of the Corporation as a representative for purposes of paragraph (1)(C), interim director, director, officer, employee, or agent of a bridge payment stablecoin issuer shall not—(i)solely by virtue of service in any such capacity lose any existing status as an officer or employee of the United States for purposes of title 5, United States Code, or any other provision of law; or(ii)receive any salary or benefits for service in any such capacity with respect to a bridge payment stablecoin issuer in addition to such salary or benefits as are obtained through employment with the Corporation or such Federal instrumentality.(7)

Duration of bridge payment stablecoin issuer

Subject to paragraphs (8) and (9), the status of a bridge payment stablecoin issuer as such shall terminate at the end of the 2-year period following the date it was granted a charter. The Board of Directors of the Corporation may, in its discretion, extend the status of the bridge payment stablecoin issuer as such for 3 additional 1-year periods.(8)

Termination of bridge payment stablecoin issuer status

The status of any bridge payment stablecoin issuer as such shall terminate upon the earliest of—(A)the merger or consolidation of the bridge issuer with a payment stablecoin issuer that is not a bridge issuer;(B)at the election of the Corporation, the sale of a majority of the capital stock of the bridge payment stablecoin issuer to an entity other than the Corporation and other than another bridge issuer;(C)the sale of 80 percent, or more, of the capital stock of the bridge payment stablecoin issuer to an entity other than the Corporation and other than another bridge issuer;(D)at the election of the Corporation, either the assumption of all or substantially all of the payment stablecoin liabilities of the bridge payment stablecoin issuer by another payment stablecoin issuer, or the acquisition of all or substantially all of the assets of the bridge issuer by a payment stablecoin issuer that is not a bridge issuer, or other entity as permitted under applicable law; and(E)the expiration of the period provided in paragraph (7), or the earlier dissolution of the bridge payment stablecoin issuer as provided in paragraph (10).(9)

Effect of termination events

(A)

Merger or consolidation

A bridge payment stablecoin issuer that participates in a merger or consolidation as provided in paragraph (8)(A) shall be for all purposes a payment stablecoin issuer that is a depository institution under the supervision and regulation of the Comptroller, as the case may be, with all the rights, powers, and privileges thereof, and such merger or consolidation shall be conducted in accordance with, and shall have the effect provided in, the provisions of applicable law.(B)

Charter conversion

Following the sale of a majority of the capital stock of the bridge payment stablecoin issuer as provided in paragraph (8)(B), the Corporation may amend the charter of the bridge payment stablecoin issuer to reflect the termination of the status of the bridge issuer as such, whereupon the issuer shall remain a depository institution under the supervision of the Comptroller, as the case may be, with all of the rights, powers, and privileges thereof, subject to all laws and regulations applicable thereto.(C)

Sale of stock

Following the sale of 80 percent or more of the capital stock of a bridge payment stablecoin issuer as provided in paragraph (8)(C), the payment stablecoin issuer shall remain a depository institution that is a payment stablecoin issuer under the supervision of the Comptroller, with all of the rights, powers, and privileges thereof, subject to all laws and regulations applicable thereto.(D)

Assumption of liabilities and sale of assets

Following the assumption of all or substantially all of the liabilities of the bridge payment stablecoin issuer, or the sale of all or substantially all of the assets of the bridge issuer, as provided in paragraph (8)(D), at the election of the Corporation, the bridge issuer may retain its status as such for the period provided in paragraph (7).(E)

Amendments to charter

Following the consummation of a transaction described in subparagraph (A), (B), (C), or (D) of paragraph (8), the charter of the resulting issuer shall be amended to reflect the termination of bridge payment stablecoin issuer status, if appropriate.(10)

Dissolution of bridge payment stablecoin issuer

(A)

In general

Notwithstanding any other provision of State or Federal law, if the bridge payment stablecoin issuer’s status as such has not previously been terminated by the occurrence of an event specified in subparagraph (A), (B), (C), or (D) of paragraph (8)—(i)the Board of Directors of the Corporation may, in its discretion, dissolve a bridge payment stablecoin issuer in accordance with this paragraph at any time; and(ii)the Board of Directors of the Corporation shall promptly commence dissolution proceedings in accordance with this paragraph upon the expiration of the 2-year period following the date the bridge payment stablecoin issuer was chartered, or any extension thereof, as provided in paragraph (7).(B)

Procedures

The Comptroller shall appoint the Corporation as receiver for a bridge payment stablecoin issuer upon certification by the Board of Directors of the Corporation to the Comptroller of its determination to dissolve the bridge issuer. The Corporation as such receiver shall wind up the affairs of the bridge issuer. With respect to any such bridge payment stablecoin issuer, the Corporation as such receiver shall have all the rights, powers, and privileges and shall perform the duties related to the exercise of such rights, powers, or privileges granted by law to a receiver of payment stablecoin issuers and notwithstanding any other provision of law in the exercise of such rights, powers, and privileges the Corporation shall not be subject to the direction or supervision of any State agency or other Federal agency.(11)

Multiple bridge payment stablecoin issuers

Subject to paragraph (1)(B)(i), the Corporation may, in the Corporation’s discretion, organize 2 or more bridge payment stablecoin issuers under this subsection to assume any payment stablecoin liabilities, and purchase any assets of a single payment stablecoin issuer in default.(n)

Supervisory records

Whenever the Corporation has been appointed as receiver for a payment stablecoin issuer, the Comptroller or State bank supervisor, and the Board, shall make available all supervisory records to the receiver which may be used by the receiver in any manner the receiver determines to be appropriate.(o)

Certain sales of assets prohibited

(1)

Persons who engaged in improper conduct with, or caused losses to, payment stablecoin issuers

The Corporation shall prescribe regulations which, at a minimum, shall prohibit the sale of assets of a failed payment stablecoin issuer by the Corporation to—(A)any person who—(i)has defaulted, or was a member of a partnership or an officer or director of a corporation that has defaulted, on 1 or more obligations the aggregate amount of which exceed $1,000,000, to such failed payment stablecoin issuer; and(ii)proposes to purchase any such asset in whole or in part through the use of the proceeds of a loan or advance of credit from the Corporation or from any institution for which the Corporation has been appointed as conservator or receiver;(B)any person who participated, as an officer or director of such failed issuer or of any affiliate of such issuer, in a material way in transactions that resulted in a substantial loss to such failed issuer;(C)any person who has been removed from, or prohibited from participating in the affairs of, such failed issuer pursuant to any final enforcement action by the Comptroller, State bank supervisor or the Board; or(D)any person who has demonstrated a pattern or practice of defalcation regarding obligations to such failed issuer.(2)

Convicted debtors

Except as provided in paragraph (3), any person who has been convicted of an offense under section 215, 656, 657, 1005, 1006, 1007, 1008, 1014, 1032, 1341, 1343, or 1344 of title 18, United States Code, or of conspiring to commit such an offense, affecting any payment stablecoin issuer for which the Corporation was appointed conservator or receiver, may not purchase any asset of such institution from the Corporation as conservator or receiver.(3)

Settlement of claims

Paragraphs (1) and (2) shall not apply to the sale or transfer by the Corporation of any asset of any payment stablecoin issuer to any person if the sale or transfer of the asset resolves or settles, or is part of the resolution or settlement, of—(A)1 or more claims that have been, or could have been, asserted by the Corporation against the person; or(B)obligations owed by the person to any payment stablecoin issuer or the Corporation.(p)

Expedited procedures for certain claims

(1)

Time for filing notice of appeal

The notice of appeal of any order, whether interlocutory or final, entered in any case brought by the Corporation against a payment stablecoin issuer’s director, officer, employee, agent, attorney, accountant, or appraiser or any other person employed by or providing services to a payment stablecoin issuer shall be filed not later than 30 days after the date of entry of the order. The hearing of the appeal shall be held not later than 120 days after the date of the notice of appeal. The appeal shall be decided not later than 180 days after the date of the notice of appeal.(2)

Scheduling

Consistent with section 1657 of title 28, United States Code, a court of the United States shall expedite the consideration of any case brought by the Corporation against a payment stablecoin issuer’s director, officer, employee, agent, attorney, accountant, or appraiser or any other person employed by or providing services to the issuer. As far as practicable, the court shall give such case priority on its docket.(3)

Judicial discretion

The court may modify the schedule and limitations stated in paragraphs (1) and (2) in a particular case, based on a specific finding that the ends of justice that would be served by making such a modification would outweigh the best interest of the public in having the case resolved expeditiously.(q)

Foreign investigations

The Corporation, as conservator or receiver of a payment stablecoin and for purposes of carrying out any power, authority, or duty with respect to an issuer—(1)may request the assistance of any foreign banking authority and provide assistance to any foreign banking authority in accordance with section 8(v) of the Federal Deposit Insurance Act (12 U.S.C. 1818(v)); and(2)may each maintain an office to coordinate foreign investigations or investigations on behalf of foreign banking authorities.(r)

Prohibition on entering secrecy agreements and protective orders

The Corporation may not enter into any agreement or approve any protective order which prohibits the Corporation from disclosing the terms of any settlement of an administrative or other action for damages or restitution brought by the Corporation in its capacity as conservator or receiver for a payment stablecoin issuer.(s)

Agencies may share information without waiving privilege

(1)

In general

A covered agency, in any capacity, shall not be deemed to have waived any privilege applicable to any information by transferring that information to or permitting that information to be used by—(A)any other covered agency, in any capacity; or(B)any other agency of the Federal Government (as defined in section 6 of title 18, United States Code).(2)

Definitions

For purposes of this subsection:(A)

Covered agency

The term covered agency means any of the following:(i)Any Federal banking agency or State bank supervisor.(ii)The Farm Credit Administration.(iii)The Farm Credit System Insurance Corporation.(iv)The National Credit Union Administration.(v)The Government Accountability Office.(vi)The Bureau of Consumer Financial Protection.(vii)The Federal Housing Finance Agency.(B)

Privilege

The term privilege includes any work-product, attorney-client, or other privilege recognized under Federal or State law.(3)

Rule of construction

Paragraph (1) shall not be construed as implying that any person waives any privilege applicable to any information because paragraph (1) does not apply to the transfer or use of that information.

10.

Conforming amendments

(a)

Title 11

Section 109(b)(2) of title 11, United States Code, is amended to read as follows:

(2)a domestic insurance company, bank (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)), savings bank, cooperative bank, savings and loan association, building and loan association, depository institution, homestead association, a New Markets Venture Capital company as defined in section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 689), a small business investment company licensed by the Small Business Administration under section 301 of the Small Business Investment Act of 1958 (15 U.S.C. 681), credit union, payment stablecoin issuer (as defined in section __01 of the Lummis-Gillibrand Payment Stablecoin Act), or industrial bank or similar institution that is an insured bank (as defined in section 3(h) of the Federal Deposit Insurance Act (12 U.S.C. 1813(h)); or

(b)

Federal Deposit Insurance Act

Section 13(e)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1823(e)(1)) is amended—(1)in the matter preceding subparagraph (A), by inserting or a payment stablecoin issuer after any insured depository institution;(2)in subparagraph (B), by inserting or the payment stablecoin issuer after the depository institution each place it appears;(3)in subparagraph (C), by striking the the depository institution or its loan committee and inserting the depository institution (or its loan committee) or a payment stablecoin issuer; and(4)in subparagraph (D), by inserting or the payment stablecoin issuer after the depository institution.

11.

Enforcement

(a)

Civil action

The applicable payment stablecoin regulator may bring an action in the appropriate district court of the United States, or the court of any territory of the United States, to seek an order for the enforcement of this Act and such court shall have jurisdiction and power to order and require compliance herewith, including through injunctive relief. (b)

Prohibition on unauthorized participation by convicted individuals

(1)

In general

No person who has been convicted of any criminal offense involving insider trading, embezzlement, cybercrime, money laundering, or financing of terrorism, or of felony financial fraud may serve as an executive officer or a person with control of more than 5 percent of the shares of a payment stablecoin issuer.(2)

Waiver; exceptions

The Board shall provide by rule a process to apply for a waiver of the prohibition under paragraph (1) and may provide for de minimis exceptions to the prohibition under such paragraph that would not require a waiver.(c)

Suspension or revocation

The applicable payment stablecoin regulator may prohibit a payment stablecoin issuer from issuing payment stablecoins under a registration or authorization if the regulator determines that the payment stablecoin issuer, or an institution-affiliated party, is—(1)violating or has violated an applicable law, regulation, or order;(2)violating or has violated any condition imposed in writing by the Comptroller, State bank supervisor, or Board in connection with a written agreement entered into between the payment stablecoin issuer and the appropriate regulator or a condition imposed in connection with any application or other request; or(3)operating in an unsafe or unsound manner.(d)

Cease-and-Desist proceedings

If the applicable payment stablecoin regulator has reasonable cause to believe that a payment stablecoin issuer or any institution-affiliated party is violating or has violated this Act, any rule or order issued pursuant to this Act, or any written agreement entered into with the Comptroller, State bank supervisor, or Board, or condition imposed in writing in connection with any application or other request, the applicable payment stablecoin regulator may, by provisions that are mandatory or otherwise, order the payment stablecoin issuer or institution-affiliated party of the payment stablecoin issuer to— (1)cease and desist from such violation or practice;(2)take affirmative action to correct the conditions resulting from any such violation or practice; or(3)take such other action, as determined to be appropriate.(e)

Removal and prohibition authority

The applicable payment stablecoin regulator may remove an institution-affiliated party from their position or office or prohibit further participation of the institution-affiliated party in the affairs of the payment stablecoin issuer or in the affairs of all payment stablecoin issuers if the applicable payment stablecoin regulator determines that—(1)the institution-affiliated party has, directly or indirectly, committed a violation or attempted violation of this Act;(2)the institution-affiliated party has committed a violation of any provision of sub-chapter II of chapter 53 of title 31, United States Code; or(3)the institution-affiliated party is otherwise disqualified pursuant to subsection (b).(f)

Enforcement and penalty authorities with respect to safety and soundness

With respect to a payment stablecoin issuer, if the applicable payment stablecoin regulator has reasonable cause to believe that the payment stablecoin issuer or an institution-affiliated party of the payment stablecoin issuer is engaging or has engaged in an unsafe or unsound practice, the applicable payment stablecoin regulator shall have the same authorities and responsibilities as the Federal Deposit Insurance Corporation with respect to an insured depository institution and an institution-affiliated party under section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818).(g)

Procedure

(1)

Notice

For each violation or attempted violation of this Act, the applicable payment stablecoin regulator shall provide notice to the payment stablecoin issuer and any institution-affiliated party of the payment stablecoin issuer, which shall include—(A)a statement of facts constituting the identified violation or attempted violation; and(B)a notice of a hearing that will be held with respect to the violation or attempted violation, including the time and place of the hearing, that is set not less than 30 days after the date of the notice.(2)

Hearing

A hearing described in paragraph (1) shall be held in a Federal judicial district or in the territory in which the payment stablecoin issuer or institution-affiliated party is located, unless the issuer or institution-affiliated party consents to another place, and shall be conducted in accordance with the provisions of chapter 5 of title 5, United States Code.(3)

Written decision

Not later than 90 days after the applicable payment stablecoin regulator has notified the parties that the case has been submitted for a final decision, the applicable payment stablecoin regulator shall render a written decision that includes a statement of the findings of fact upon which the decision is predicated and shall be served upon each party to the proceeding an order or orders consistent with the provisions of this section. (4)

Orders

An order issued under this subsection shall—(A)be effective as of the date set by the appropriate payment stablecoin regulator after the date of the decision, except in the case of a cease-and-desist order issued upon consent, which shall become effective at the time specified therein; and(B)remain effective and enforceable as provided in the order, except to such extent as it is stayed, modified, terminated, or set aside by the action of a regulator or a reviewing court.(5)

Appearance

Unless a payment stablecoin issuer or institution-affiliated party of such issuer appears at the hearing, personally or by a duly authorized representative, such issuer or party shall be deemed to have consented to the suspension or revocation of registration or authorization, a cease-and-desist order, or removal, as applicable.(h)

Judicial review

(1)

In general

With respect to a final order under this section not issued by consent of a payment stablecoin issuer or an institution-affiliated party, an aggrieved person may, not later than 30 days after the date of service of the order and written decision, file a petition for review in an appropriate court of appeals of the United States, or in the United States Court of Appeals for the District of Columbia Circuit to request that the order be modified, terminated, or set aside. (2)

Transmission of the record

Upon the filing of a petition under paragraph (1) with the appropriate court, the clerk of that court shall transmit a copy of the petition to the applicable payment stablecoin regulator which shall transmit to the court the record of the proceeding relating to the petition, as provided in section 2112 of title 28, United States Code. (3)

Exclusive jurisdiction

(A)

In general

Upon the filing of a petition under paragraph (1) with the appropriate court, that court shall have exclusive jurisdiction to—(i)review the final action, as provided in chapter 7 of title 5, United States Code; and(ii)affirm, modify, terminate, or set aside, in whole or in part, the applicable order. (B)

Final judgement

Except upon review by the Supreme Court upon writ of certiorari, as provided in section 1254 of title 28, United States Code, the judgment and decree of the court is final.(i)

Commencement of proceedings not treated as a stay

(1)

In general

The commencement of proceedings for judicial review under subsection (h) shall not, unless specifically ordered by the appropriate court, operate as a stay of any order. (2)

Enforcement

The applicable payment stablecoin regulator may, in its discretion, apply to the appropriate United States district court or the United States court of any territory, for the enforcement of any effective and outstanding notice or order issued under this section, and such court shall have jurisdiction and power to order and require compliance herewith, but, except as otherwise provided in this section, no court shall have jurisdiction to affect by injunction or otherwise the issuance or enforcement of any notice or order under this section, or to review, modify, suspend, terminate, or set aside any such notice or order.(j)

Temporary cease and desist proceedings

(1)

In general

If the applicable payment stablecoin regulator determines that a violation or attempted violation identified under this section, or the continuation thereof, is likely to cause a receivership, insolvency, or significant dissipation of assets or earnings of a payment stablecoin issuer, or is likely to weaken the condition of the payment stablecoin issuer or otherwise prejudice the interests of its customers prior to the completion of the proceedings conducted pursuant to subsection (h), the applicable payment stablecoin regulator may issue a temporary order requiring a payment stablecoin issuer or institution-affiliated party to cease and desist from any such violation or practice and to take affirmative action to prevent or remedy such receivership, insolvency, dissipation, condition, or prejudice pending completion of such proceedings.(2)

Effective date

An order described under paragraph (1) shall become effective upon service on the payment stablecoin issuer or the institution-affiliated party and, unless set aside, limited, or suspended by a court, remain effective and enforceable pending the completion of the administrative proceedings pursuant to such notice and until such time as the applicable payment stablecoin regulator removes the suspension or the cease-and-desist order has expired.(k)

Judicial review

Not later than 10 days after the date a payment stablecoin issuer concerned or any institution-affiliated party has been served with a temporary cease-and-desist order, the payment stablecoin issuer or such party may apply to the appropriate United States district court, or the United States District Court for the District of Columbia, for an injunction setting aside, limiting, or suspending the enforcement, operation, or effectiveness of such order pending the completion of the administrative proceeding pursuant to the notice of charges served upon the payment stablecoin issuer or such party under subsection (g)(4), and such court shall have jurisdiction to issue such injunction. (l)

Enforcement of temporary cease and desist orders

In the case of a violation or attempted violation of, or failure to obey, a temporary cease-and-desist order issued pursuant to this section, the applicable payment stablecoin regulator may apply to the appropriate United States district court, or the United States court of any territory, for an injunction to enforce such order, and, if the court determines that there has been such violation or attempted violation or failure to obey, it shall be the duty of the court to issue such injunction.(m)

Failure To register or be authorized

Any payment stablecoin issuer that fails to obtain the applicable registration or authorization under this Act, or an institution-affiliated party that knowingly participates in such a failure, shall be liable for a civil penalty of not more than $1,000,000 to the Board for each day during which such failure continues. The Board may also seek appropriate relief under subsection (a) for failure of a payment stablecoin issuer or other person to register or be authorized under section 6 or 7, as appropriate. (n)

First tier civil monetary penalties

Except as provided in subsection (m), a payment stablecoin issuer or institution-affiliated party of such payment stablecoin issuer that violates this Act or any rule or order issued pursuant to this Act, or that violates any condition imposed in writing in connection with a written agreement entered into between the payment stablecoin issuer and the applicable payment stablecoin regulator, or a condition imposed in connection with any application or other request, shall be liable for a civil penalty of up to $100,000 for each day during which the violation continues.(o)

Second tier civil monetary penalties

Except as provided in subsection (m), a payment stablecoin issuer or any institution-affiliated party of such payment stablecoin issuer that knowingly participates in a violation of any provision of this Act, or any rule or order issued pursuant thereto, is liable for a civil penalty of up to an additional $100,000 for each day during which the violation continues.(p)

Civil monetary penalty procedure

(1)

Assessment and collection

Any civil monetary penalty imposed under this section may be assessed and collected by the applicable payment stablecoin regulator by following the procedure set forth under subsection (g). (2)

Deadline

The applicable payment stablecoin regulator may commence an action for a civil penalty resulting from a violation of this Act at any time before the end of the 6-year period beginning on the date of such violation.(q)

Enforcement of civil monetary penalties

(1)

In general

If a payment stablecoin issuer or institution-affiliated party fails to pay a civil monetary penalty assessed under this section, the applicable payment stablecoin regulator shall recover the amount assessed by action in the appropriate United States district court. The validity and appropriateness of a civil monetary penalty assessed under this section shall not be subject to review. (2)

Restraining order

In any action brought pursuant to this subsection, or in an action brought in aid of, or to enforce an order in, any administrative or other civil action for money damages, restitution, or civil money penalties, the court may, upon application, issue a restraining order that—(A)prohibits any person subject to the proceeding from withdrawing, transferring, removing, dissipating, or disposing of any assets; and(B)appoints a temporary receiver to administer the restraining order.(r)

Notice under this section after separation from service

The resignation, termination of employment or participation, or separation of an institution-affiliated party (including a separation caused by the closing of a payment stablecoin issuer) shall not affect the jurisdiction and authority of the applicable payment stablecoin regulator to issue any notice or order and proceed under this section against any such party, if such notice or order is served before the end of the 6-year period beginning on the date such party ceased to be an institution-affiliated party with respect to the payment stablecoin issuer. (s)

Exercise of authority

(1)

In general

In exercising authority under this section with respect to a depository institution that issues a payment stablecoin under section 7 of this Act, the Comptroller or State bank supervisor, as applicable, and the Board shall endeavor to act jointly whenever possible. (2)

Consultation

(A)

Initial consultation required

Prior to opening an investigation, beginning the process of an enforcement action or exercising other authority under this section, the applicable payment stablecoin regulator shall provide notice and consult with the other applicable regulator relating to the necessity and scope of the action. (B)

Exercise of authority

After an initial consultation under this paragraph, the applicable payment stablecoin regulator may exercise authority independently under this section, but shall keep the other applicable regulator reasonably informed about the progress of the action and shall provide not less than 7 days’ prior notice of the timing and scope of the final action.

12.

Interoperability standards

The Board, in consultation with the Comptroller, State bank supervisors, the National Institute of Standards and Technology and other relevant standard setting organizations, shall assess and, if necessary, may, pursuant to section 553 of title 5, United States Code, and in a manner consistent with the utilization of consensus technical standards under section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note), prescribe standards for payment stablecoin issuers and payment stablecoin service providers to promote compatibility and interoperability among payment stablecoin systems and between payment stablecoin systems and other payment systems, including mandatory or minimum technical or legal specifications that enable participants in one payment system to clear and settle payments across payment systems without participating directly in multiple payment systems.

13.

Reservation of authority

(a)

Limitation of authority

Nothing in this Act shall limit the authority of the Board, Comptroller, State bank supervisors, the Secretary of the Treasury, the Bureau of Consumer Financial Protection, the Securities and Exchange Commission, or the Commodity Futures Trading Commission under any provision of law with respect to any person subject to this Act.(b)

Effect on State laws

The provisions of this Act and rules issued pursuant to this Act shall not preempt a law of a State except to the extent such law conflicts with the provisions of this Act, and then only to the extent of such conflict. (c)

Antitrust savings clause

Nothing in this Act shall be construed to modify, impair, or supersede the operation of any of the Federal antitrust laws, as defined in subsection (a) of the first section of the Clayton Act (15 U.S.C. 12(a)) or statutes proscribing unfair or deceptive acts or practices, as defined in section 5(a)(4) of the Federal Trade Commission Act (15 U.S.C. 45(a)(4)).(d)

Insured depository institution savings clause

Nothing in this Act shall be construed to limit the authority of an insured depository institution (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) to engage in activities permissible pursuant to applicable State and Federal law, including accepting or receiving deposits and issuing crypto assets that represent, and have the same legal standing as, deposits, or to limit the authority of the Federal banking agencies to interpret or establish limitations and conditions on such activities.

14.

Accounting treatment of custodial assets

Crypto assets properly held in a custodial account shall not be considered assets or liabilities of the custodian for any purpose and shall be maintained on an off-balance sheet basis, including for the purpose of accounting treatment for the custodian, notwithstanding the form in which the assets are maintained, and for the purposes of the capital calculations of depository institutions and all other financial institutions.

15.

Effective date; implementation and rules

(a)

Effective date

This Act shall take effect on the earlier of—(1)the date that is 540 days after the date of enactment of this Act; or(2)the date that is 90 days after the date on which the Board—(A)issues final rules implementing this Act; and(B)notifies Congress and the public that final rules have been issued.(b)

Transitional provisions for existing non-Depository institutions

(1)

Application priority

An application for authorization under this Act of a State non-depository trust company, or the holder of a State license that only persons engaged in crypto asset activities may obtain, which was chartered or issued under the laws of a State and granted permission by its regulator to issue payment stablecoins before May 1, 2024, shall be approved by the Board before an application from another entity that is filed on or after May 1, 2024. (2)

Approval

An application described in paragraph (1), shall be approved unless the Board finds, by unanimous vote of all members, that the non-depository institution is unlikely to come into compliance with the requirements of section 6(b) not later than 1 year after the effective date of this Act under subsection (a). (3)

Issuance permitted

A State non-depository trust company or holder of a State license to which this subsection applies may continue with issuance, redemption and other similar activities relating to a payment stablecoin under this subsection under this subsection until its application is approved or denied by the Board.(c)

Transitional provisions for existing depository institutions

(1)

Application priority

The application of a depository institution for authorization to become a national payment stablecoin issuer under section 7 of this Act, which was chartered and granted permission by its regulator to issue payment stablecoins before May 1, 2024, shall be decided upon by the Board before any other application for authorization to become a national payment stablecoin issuer which is filed on or after May 1, 2024. (2)

Deemed approved

The application described in paragraph (1) shall be deemed approved unless the Board finds, by unanimous vote of all members, that the depository institution is unlikely to come into compliance with the requirements of section 7(b) not later than 1 year after the date of enactment of this Act. (3)

Issuance permitted

A depository institution to which this subsection applies may continue with issuance, redemption and other similar activities relating to a payment stablecoin under this subsection until its application is approved or denied by the Board.(d)

Findings relating to certain activities

Congress finds the following:(1)In determining whether an activity is financial in nature under the Bank Holding Company Act (12 U.S.C. 1841 et seq.), Congress has required the Board under such Act to—(A)consider changes or reasonably expected changes in the marketplace in which financial companies compete;(B)consider changes or reasonably expected changes in the technology for delivering financial services; and(C)consider the ability of financial companies to compete effectively and efficiently to deliver information and services that are financial in nature through the use of technological means, including any application necessary to protect the security or efficacy of systems for the transmission of data or financial transactions.(2)Lending, exchanging, transferring, investing for others, and safeguarding money and crypto assets, and activities incidental to these functions, are analogous to similar activities permissible for banks under the Bank Holding Company Act (12 U.S.C. 1841 et seq.).(3)The activities described in paragraph (2) shall be deemed financial in nature, or incidental to a financial activity, under the Bank Holding Company Act (12 U.S.C. 1841 et seq.) for purposes of section 5 of this Act. (e)

Report on rulemaking status

Not later than 180 days after the effective date of this Act under subsection (a), the Board 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 status update on the development of the rulemaking under this Act.