SECTION 1. SHORT TITLE.
This Act may be cited as the “Lummis-Gillibrand Payment Stablecoin Act”.
SEC. 2. 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.SEC. 3. 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.