1 meeting related to this legislation
Updated 6 days ago
Last progress July 16, 2025 (6 months ago)
Creates a detailed federal regulatory system for payment stablecoins: only approved (“permitted”) issuers may issue U.S. payment stablecoins, and those issuers must meet rules for custody, reserves, disclosures, anti‑money‑laundering, sanctions, and examinations by federal or state regulators. The bill changes how stablecoin assets are treated in bankruptcy, sets technical and interoperability standards, establishes a process for bank-affiliated and federally qualified issuers, allows some foreign issuers under strict conditions, and requires multiple reports, studies, and ongoing supervision. The law preserves some self-custody and person-to-person exemptions, gives States a role for state‑chartered issuers, and creates criminal and civil penalties for unapproved issuance or noncompliance. It becomes effective either 18 months after enactment or sooner if regulators finalize implementing rules (120 days after final rules).
A person may only provide custodial or safekeeping services for the payment stablecoin reserve, payment stablecoins used as collateral, or private keys if the person is supervised by a primary Federal payment stablecoin regulator or a primary financial regulatory agency under Dodd-Frank, or is supervised by a State bank supervisor or State credit union supervisor that provides necessary information to the Board.
Such a person must comply with the customer-protection requirements in subsection (b), unless the person holds the property under similar requirements required by a primary Federal payment stablecoin regulator, the SEC, or the CFTC.
Custodians must treat payment stablecoins, private keys, cash, and other customer property as belonging to the customer and not as the custodian’s own property.
Custodians must take steps appropriate to protect a customer’s payment stablecoins, private keys, cash, and other property from the custodian’s creditors.
Payment stablecoin reserves, payment stablecoins, cash, and other property of a permitted payment stablecoin issuer or customer must be separately accounted for and segregated from the custodian’s own assets.
Who is affected and how:
Financial firms and banks: Banks, credit unions, fintechs, and other financial firms that want to issue, custody, or support payment stablecoins must either become permitted/federally qualified issuers or work with approved issuers. Federally approved bank subsidiaries will get limited preemption of state licensing but face stringent federal supervision, reporting, and AML requirements. This will increase compliance costs, require governance and systems upgrades, and may change business models for crypto firms and traditional financial institutions.
Stablecoin issuers and digital asset service providers: Nonbank crypto companies will face a choice—seek federal or State qualification, comply with reserve, disclosure, and custody rules, or stop offering U.S. payment-stablecoin services. Unauthorized issuance becomes a criminal offense, raising legal risk for some business models.
Consumers and end users: The law aims to increase consumer protections through reserve requirements, segregation of customer assets, transparency, and enforcement powers. That may reduce some risks (e.g., loss of redemption rights if reserves are unavailable). However, stricter rules could reduce the number of products or increase costs passed to consumers.
State regulators and State-chartered banks: States gain explicit supervisory authority for State-qualified issuers but will need to build capacity to examine and certify issuers. Home- and host-State rules for out-of-State issuers create new regulatory coordination tasks. State authorities may also see preemption where federal approval applies.
Insolvency courts and creditors: Bankruptcy treatment changes will shift recovery priorities in failures involving stablecoins, giving stablecoin holders prioritized claims to reserves and creating specific exceptions to the automatic stay for redemptions.
Foreign issuers and markets: Non-U.S. issuers can access the U.S. market only under strict comparability and oversight conditions. The Treasury’s authority to prohibit trading in noncompliant foreign stablecoins could limit cross-border trading and secondary markets.
Law enforcement and AML/Sanctions compliance: The bill strengthens AML and sanctions requirements tied to stablecoin issuance and authorizes Treasury and FinCEN steps to improve illicit-activity detection using new technologies. Firms must implement stronger controls and reporting.
Net effects:
Last progress July 18, 2025 (6 months ago)
Introduced on May 1, 2025 by William Francis Hagerty
President of the United States
