12 USC 5903 - Requirements for issuing payment stablecoins

U.S Code last checked for updates: Jul 28, 2025

§ 5903.

Requirements for issuing payment stablecoins

(a)

Standards for the issuance of payment stablecoins

(1)

In general

A permitted payment stablecoin issuer shall—

(A)

maintain identifiable reserves backing the outstanding payment stablecoins of the permitted payment stablecoin issuer on an at least 1 to 1 basis, with reserves comprising—

(i)

United States coins and currency (including Federal Reserve notes) or money standing to the credit of an account with a Federal Reserve Bank;

(ii)

funds held as demand deposits (or other deposits that may be withdrawn upon request at any time) or insured shares at an insured depository institution (including any foreign branches or agents, including correspondent banks, of an insured depository institution), subject to limitations established by the Corporation and the National Credit Union Administration, as applicable, to address safety and soundness risks of such insured depository institution;

(iii)

Treasury bills, notes, or bonds—

(I)

with a remaining maturity of 93 days or less; or

(II)

issued with a maturity of 93 days or less;

(iv)

money received under repurchase agreements, with the permitted payment stablecoin issuer acting as a seller of securities and with an overnight maturity, that are backed by Treasury bills with a maturity of 93 days or less;

(v)

reverse repurchase agreements, with the permitted payment stablecoin issuer acting as a purchaser of securities and with an overnight maturity, that are collateralized by Treasury notes, bills, or bonds on an overnight basis, subject to overcollateralization in line with standard market terms, that are—

(I)

tri-party;

(II)

centrally cleared through a clearing agency registered with the Securities and Exchange Commission; or

(III)

bilateral with a counterparty that the issuer has determined to be adequately creditworthy even in the event of severe market stress;

(vi)

securities issued by an investment company registered under section 80a–8(a) of title 15, or other registered Government money market fund, and that are invested solely in underlying assets described in clauses (i) through (v);

(vii)

any other similarly liquid Federal Government-issued asset approved by the primary Federal payment stablecoin regulator, in consultation with the State payment stablecoin regulator, if applicable, of the permitted payment stablecoin issuer; or

(viii)

any reserve described in clause 1

 So in original.

(i) through (iii) or clause 1 (vi) through (vii) in tokenized form, provided that such reserves comply with all applicable laws and regulations;

(B)

publicly disclose the issuer’s redemption policy, which shall—

(i)

establish clear and conspicuous procedures for timely redemption of outstanding payment stablecoins, provided that any discretionary limitations on timely redemptions can only be imposed by a State qualified payment stablecoin regulator, the Corporation, the Comptroller, or the Board, consistent with section 5906 of this title; and

(ii)

publicly, clearly, and conspicuously disclose in plain language all fees associated with purchasing or redeeming the payment stablecoins, provided that such fees can only be changed upon not less than 7 days’ prior notice to consumers; and

(C)

publish the monthly composition of the issuer’s reserves on the website of the issuer, containing—

(i)

the total number of outstanding payment stablecoins issued by the issuer; and

(ii)

the amount and composition of the reserves described in subparagraph (A), including the average tenor and geographic location of custody of each category of reserve instruments.

(2)

Prohibition on rehypothecation

Reserves required under paragraph (1)(A) may not be pledged, rehypothecated, or reused by the permitted payment stablecoin issuer, either directly or indirectly, except for the purpose of—

(A)

satisfying margin obligations in connection with investments in permitted reserves under clauses (iv) and (v) of paragraph (1)(A);

(B)

satisfying obligations associated with the use, receipt, or provision of standard custodial services; or

(C)

creating liquidity to meet reasonable expectations of requests to redeem payment stablecoins, such that reserves in the form of Treasury bills may be sold as purchased securities for repurchase agreements with a maturity of 93 days or less, provided that either—

(i)

the repurchase agreements are cleared by a clearing agency registered with the Securities and Exchange Commission; or

(ii)

the permitted payment stablecoin issuer receives the prior approval of its primary Federal payment stablecoin regulator or State payment stablecoin regulator, as applicable.

(3)

Monthly certification; examination of reports by registered public accounting firm

(A)

In general

(B)

Certification

Each month, the Chief Executive Officer and Chief Financial Officer of a permitted payment stablecoin issuer shall submit a certification as to the accuracy of the monthly report to, as applicable—

(i)

the primary Federal payment stablecoin regulator of the permitted payment stablecoin issuer; or

(ii)

the State payment stablecoin regulator of the permitted payment stablecoin issuer.

(C)

Criminal penalty

(4)

Capital, liquidity, and risk management requirements

(A)

In general

The primary Federal payment stablecoin regulators shall, or in the case of a State qualified payment stablecoin issuer, the State payment stablecoin regulator shall, consistent with section 5913 of this title, issue regulations implementing—

(i)

capital requirements applicable to permitted payment stablecoin issuers that—

(I)

are tailored to the business model and risk profile of permitted payment stablecoin issuers;

(II)

do not exceed requirements that are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers; and

(III)

in the case of the primary Federal payment stablecoin regulators, if the primary Federal payment stablecoin regulators determine that a capital buffer is necessary to ensure the ongoing operations of permitted payment stablecoin issuers, may include capital buffers that are tailored to the business model and risk profile of permitted payment stablecoin issuers;

(ii)

the liquidity standard under paragraph (1)(A);

(iii)

reserve asset diversification, including deposit concentration at banking institutions, and interest rate risk management standards applicable to permitted payment stablecoin issuers that—

(I)

are tailored to the business model and risk profile of permitted payment stablecoin issuers; and

(II)

do not exceed standards that are sufficient to ensure the ongoing operations of permitted payment stablecoin issuers; and

(iv)

appropriate operational, compliance, and information technology risk management principles-based requirements and standards, including Bank Secrecy Act and sanctions compliance standards, that—

(I)

are tailored to the business model and risk profile of permitted payment stablecoin issuers; and

(II)

are consistent with applicable law.

(B)

Rule of construction

Nothing in this paragraph shall be construed to limit—

(i)

the authority of the primary Federal payment stablecoin regulators, in prescribing standards under this paragraph, to tailor or differentiate among issuers on an individual basis or by category, taking into consideration the capital structure, business model risk profile, complexity, financial activities (including financial activities of subsidiaries), size, and any other risk-related factors of permitted payment stablecoin issuers that a primary Federal payment stablecoin regulator determines appropriate, provided that such tailoring or differentiation occurs without respect to whether a permitted payment stablecoin issuer is regulated by a State payment stablecoin regulator; or

(ii)

any supervisory, regulatory, or enforcement authority of a primary Federal payment stablecoin regulator to further the safe and sound operation of an institution for which the primary Federal payment stablecoin regulator is the appropriate regulator.

(C)

Applicability of existing capital standards

(i)

Definition

(ii)

Applicability of Financial Stability Act

(iii)

Rules relating to leverage capital requirements or risk-based capital requirements

(iv)

Modifications

(5)

Treatment under the Bank Secrecy Act and sanctions laws

(A)

In general

A permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the Bank Secrecy Act, and as such, shall be subject to all Federal laws applicable to a financial institution located in the United States relating to economic sanctions, prevention of money laundering, customer identification, and due diligence, including—

(i)

maintenance of an effective anti-money laundering program, which shall include appropriate risk assessments and designation of an officer to supervise the program;

(ii)

retention of appropriate records;

(iii)

monitoring and reporting of any suspicious transaction relevant to a possible violation of law or regulation;

(iv)

technical capabilities, policies, and procedures to block, freeze, and reject specific or impermissible transactions that violate Federal or State laws, rules, or regulations;

(v)

maintenance of an effective customer identification program, including identification and verification of account holders with the permitted payment stablecoin issuer, high-value transactions, and appropriate enhanced due diligence; and

(vi)

maintenance of an effective economic sanctions compliance program, including verification of sanctions lists, consistent with Federal law.

(B)

Rulemaking

(C)

Reservation of authority

(6)

Coordination with permitted payment stablecoin issuers with respect to blocking of property and technological capabilities to comply with lawful orders

(A)

In general

The Secretary of the Treasury—

(i)

shall, to the best of the Secretary’s ability, coordinate with a permitted payment stablecoin issuer before taking any action to block and prohibit transactions in property and interests in property of a foreign person to ensure that the permitted payment stablecoin issuer is able to effectively block a payment stablecoin of the foreign person upon issuance of the payment stablecoin; and

(ii)

is not required to notify any permitted payment stablecoin issuer of any intended action described in clause (i) prior to taking such action.

(B)

Compliance with lawful orders

(C)

Report required

(D)

Rule of construction

(7)

Limitation on payment stablecoin activities

(A)

In general

A permitted payment stablecoin issuer may only—

(i)

issue payment stablecoins;

(ii)

redeem payment stablecoins;

(iii)

manage related reserves, including purchasing, selling, and holding reserve assets or providing custodial services for reserve assets, consistent with State and Federal law;

(iv)

provide custodial or safekeeping services for payment stablecoins, required reserves, or private keys of payment stablecoins, consistent with this chapter; and

(v)

undertake other activities that directly support any of the activities described in clauses (i) through (iv).

(B)

Rule of construction

(8)

Prohibition on tying

(A)

In general

(B)

Regulations

(9)

Prohibition on the use of deceptive names

(A)

In general

A permitted payment stablecoin issuer may not—

(i)

use any combination of terms relating to the United States Government, including “United States”, “United States Government”, and “USG” in the name of a payment stablecoin; or

(ii)

market a payment stablecoin in such a way that a reasonable person would perceive the payment stablecoin to be—

(I)

legal tender, as described in section 5103 of title 31;

(II)

issued by the United States; or

(III)

guaranteed or approved by the Government of the United States.

(B)

Pegged stablecoins

(10)

Audits and reports

(A)

Annual financial statement

(i)

In general

(ii)

Auditor

(iii)

Standards

(iv)

Rule of construction

(B)

Public disclosure and submission to Federal regulators

Each permitted payment stablecoin issuer required to prepare an audited annual financial statement under subparagraph (A) shall—

(i)

make such audited financial statements publicly available on the website of the permitted payment stablecoin issuer; and

(ii)

submit such audited financial statements annually to their primary Federal payment stablecoin regulator.

(C)

Consultation

(11)

Prohibition on interest

(12)

Non-financial services public companies

(A)

Definitions

In this paragraph:

(i)

Financial activities

The term “financial activities”—

(I)

has the meaning given that term in section 1843(k) of this title; and

(II)

for the avoidance of doubt, includes those activities described in subparagraphs (A) and (B) of section 5901(7) of this title and section 5903(a)(7)(A) of this title.

(ii)

Public company

(B)

Prohibition

(i)

In general

A public company that is not predominantly engaged in 1 or more financial activities, and its wholly or majority owned subsidiaries or affiliates, may not issue a payment stablecoin unless the public company obtains a unanimous vote of the Stablecoin Certification Review Committee finding that—

(I)

it will not pose a material risk to the safety and soundness of the United States banking system, the financial stability of the United States, or the Deposit Insurance Fund;

(II)

the public company will comply with data use limitations providing that, unless the public company receives consent from the consumer, nonpublic personal information obtained from stablecoin transaction data may not be—

(aa)

used to target, personalize, or rank advertising or other content;

(bb)

sold to any third party; or

(cc)

shared with non-affiliates; and

(III)

the public company and the affiliates of the public company will comply with the tying prohibitions under paragraph (8).

(ii)

Exception

The prohibition under clause (i) against the sharing of consumer information shall not apply to sharing of such information—

(I)

to comply with Federal, State, or local laws, rules, and other applicable legal requirements;

(II)

to comply with a properly authorized civil, criminal, or regulatory investigation, subpoena, or summons by a Federal, State, or local authority; or

(III)

to respond to judicial process or a government regulatory authority having jurisdiction over the public company.

(C)

Extension of prohibition

(i)

In general

Any company not domiciled in the United States or its Territories that is not predominantly engaged in 1 or more financial activities, may not issue a payment stablecoin unless the public company obtains a unanimous vote of the Stablecoin Certification Review Committee finding that—

(I)

it will not pose a material risk to the safety and soundness of the United States banking system, the financial stability of the United States, or the Deposit Insurance Fund;

(II)

(aa)

used to target, personalize, or rank advertising or other content;

(bb)

sold to any third party; or

(cc)

shared with non-affiliates; except ¹

(III)

the public company and the affiliates of the public company will comply with the tying prohibitions under paragraph (8).

(ii)

Exception

The prohibition under clause (i) against the sharing of consumer information shall not apply to sharing of such information—

(I)

to comply with Federal, State, or local laws, rules, and other applicable legal requirements;

(II)

to comply with a properly authorized civil, criminal, or regulatory investigation, subpoena, or summons by a Federal, State, or local authority; or

(III)

to respond to judicial process or a government regulatory authority having jurisdiction over the public company.

(D)

Rulemaking

(13)

Eligibility

(14)

Rule of construction

(b)

Regulation by the Comptroller

(1)

In general

(2)

Omitted

(c)

State-level regulatory regimes

(1)

Option for State-level regulatory regime

(2)

Principles

(3)

Review

(4)

Certification

(A)

Initial certification

(B)

Form of certification

(C)

Annual recertification

(5)

Certification review

(A)

In general

Not later than 30 days after the date on which a State payment stablecoin regulator submits an initial certification or a recertification under paragraph (4), the Stablecoin Certification Review Committee shall—

(i)

approve such certification if the Committee unanimously determines that the State-level regulatory regime meets or exceeds the standards and requirements described in subsection (a); or

(ii)

deny such certification and provide the State payment stablecoin regulator with a written explanation of the denial, describing the reasoned basis for the denial with sufficient detail to enable the State payment stablecoin regulator and State-level regulatory regime to make any changes necessary to meet or exceed the standards and requirements described in subsection (a).

(B)

Recertifications

With respect to any recertification certification ¹ submitted by a State payment stablecoin regulator under paragraph (4), the Stablecoin Certification Review Committee shall only deny the recertification if—

(i)

the State-level regulatory regime has materially changed from the prior certification or there has been a significant change in circumstances; and

(ii)

the material change in the regime or significant change in circumstances described in clause (i) is such that the State-level regulatory regime will not promote the safe and sound operation of State qualified payment stablecoin issuers under its supervision.

(C)

Opportunity to cure

(i)

In general

With respect to a denial described under subparagraph (A) or (B), the Stablecoin Certification Review Committee shall provide the State payment stablecoin regulator with not less than 180 days from the date on which the State payment stablecoin regulator is notified of such denial to—

(I)

make such changes as may be necessary to ensure the State-level regulatory regime meets or exceeds the standards described in subsection (a); and

(II)

resubmit the initial certification or recertification.

(ii)

Denial

(D)

Appeal of denial

(E)

Right to resubmit

(6)

List

(7)

Expedited certifications of existing regulatory regimes

(d)

Transition to Federal oversight

(1)

Depository institution

A State chartered depository institution that is a State qualified payment stablecoin issuer with a payment stablecoin with a consolidated total outstanding issuance of more than $10,000,000,000 shall—

(A)

not later than 360 days after the payment stablecoin reaches such threshold, transition to the Federal regulatory framework of the primary Federal payment stablecoin regulator of the State chartered depository institution, which shall be administered by the State payment stablecoin regulator of the State chartered depository institution and the primary Federal payment stablecoin regulator acting jointly; or

(B)

beginning on the date the payment stablecoin reaches such threshold, cease issuing new payment stablecoins until the payment stablecoin is under the $10,000,000,000 consolidated total outstanding issuance threshold.

(2)

Other institutions

A State qualified payment stablecoin issuer not described in paragraph (1) with a payment stablecoin with a consolidated total outstanding issuance of more than $10,000,000,000 shall—

(A)

not later than 360 days after the payment stablecoin reaches such threshold, transition to the Federal regulatory framework under subsection (a) administered by the relevant State payment stablecoin regulator and the Comptroller, acting in coordination; or

(B)

(3)

Waiver

(A)

In general

(B)

Criteria for waiver

The primary Federal payment stablecoin regulator shall consider the following exclusive criteria in determining whether to issue a waiver under this paragraph:

(i)

The capital maintained by the State qualified payment stablecoin issuer.

(ii)

The past operations and examination history of the State qualified payment stablecoin issuer.

(iii)

The experience of the State payment stablecoin regulator in supervising payment stablecoin and digital asset activities.

(iv)

The supervisory framework, including regulations and guidance, of the State qualified payment stablecoin issuer with respect to payment stablecoins and digital assets.

(C)

Rule of construction

(i)

Federal oversight

(ii)

State oversight

(e)

Misrepresentation of insured status

(1)

In general

(2)

Misrepresentation of insured status

(A)

In general

(B)

Penalty

(3)

Marketing

(A)

In general

(B)

Penalty

(C)

Determination of the number of violations

For purposes of determining the number of violations for which to impose penalties under subparagraph (B), separate acts of noncompliance are a single violation when the acts are the result of—

(i)

a common or substantially overlapping originating cause; or

(ii)

the same statement or publication.

(D)

Referral to Secretary of the Treasury

(f)

Officers or directors convicted of certain felonies

(1)

In general

No individual who has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud may serve as—

(A)

an officer of a payment stablecoin issuer; or

(B)

a director of a payment stablecoin issuer.

(2)

Penalty

(A)

In general

(B)

Referral to Attorney General

(g)

Clarification relating to Federal savings association reserves

(h)

Rulemaking

(1)

In general

(2)

Coordinated issuance of regulations

(i)

Rules of construction

Nothing in this chapter shall be construed—

(1)

as expanding the authority of the Board with respect to the services the Board can make directly available to the public; or

(2)

to limit or prevent the continued application of applicable ethics statutes and regulations administered by the Office of Government Ethics, or the ethics rules of the Senate and the House of Representatives, including section 208 of title 18 and sections 2635.702 and 2635.802 of title 5, Code of Federal Regulations. For the avoidance of doubt, existing Office of Government Ethics laws and the ethics rules of the Senate and the House of Representatives prohibit any member of Congress or senior executive branch official from issuing a payment stablecoin during their time in public service. For the purposes of this paragraph, an employee described in section 202 of title 18 shall be deemed an executive branch employee for purposes of complying with section 208 of that title.

(Pub. L. 119–27, § 4, July 18, 2025, 139 Stat. 425.)

cite as: 12 USC 5903