Requirements for issuing payment stablecoins

(a) Standards for the issuance of payment stablecoins (1) In general Each permitted payment stablecoin issuer shall— (A) maintain reserves backing the issuer’s outstanding payment stablecoins on an at least 1 to 1 basis, with reserves comprising— (i) United States 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the credit of an account with a Federal reserve bank; (ii) funds held as demand deposits (or other deposits that may be withdrawn upon request at any time) at insured depository institutions (including foreign branches and agencies of insured depository institutions) or approved foreign depository institutions (as defined in paragraph (5)(v)) or share drafts (or other deposits that may be withdrawn upon request at any time) at insured credit unions, subject to limitations established by the Corporation and the National Credit Union Administration, respectively, to address safety and soundness risks of such insured depository institutions; (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) repurchase agreements, wherein the permitted payment stablecoin issuer is acting as a seller of securities, or reverse repurchase agreements, wherein the permitted payment stablecoin issuer is acting as a purchaser of securities, with an overnight maturity and that are backed by Treasury bills with a maturity of 93 days or less that are— (I) centrally cleared through a clearing agency registered with the Securities and Exchange Commission; or (II) bilateral, settling either through delivery versus payment or through a tri-party control account, with a counterparty that the issuer has determined to be adequately credit worthy even in the event of severe market stress; or (v) securities issued by an investment company under section 8(a) of the Investment Company Act of 1940 that operates as a money market fund in compliance with Rule 2a–7 under the Investment Company Act of 1940 (or any successor rule) and that are invested solely in the underlying assets described in clauses (i) through (iv) and (vi); (B) publicly disclose the issuer’s redemption policy; (C) establish procedures for timely redemption of the issuer’s outstanding payment stablecoins; and (D) publish a report on 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 under subparagraph (A). (2) Eligibility The requirements to maintain reserves under paragraph (1)(A) may not be construed as expanding or contracting eligibility to qualify as a depository institution under section 19(b)(1)(A) of the Federal Reserve Act (12 U.S.C. 461(b)(1)(A)). (3) Prohibition on rehypothecation Reserves described under paragraph (1)(A) may not be pledged, rehypothecated, or reused, except for the purpose of satisfying obligations associated with reserves described under paragraph (1)(A)(iv) if the permitted payment stablecoin issuer receives the prior approval of the primary Federal payment stablecoin regulator or the State payment stablecoin regulator. (4) Monthly certification; examination of reports by registered public accounting firm (A) In general A permitted payment stablecoin issuer shall, each month, have the information disclosed in the previous month-end report required under paragraph (1)(D) examined by an independent registered public accounting firm. (B) Certification Each month, the Chief Executive Officer and Chief Financial Officer of a permitted payment stablecoin issuer shall submit to, as applicable, the primary Federal payment stablecoin regulator or, in the case of a State qualified payment stablecoin issuer, the State payment stablecoin regulator, a certification that, based on such officers’ knowledge, the previous month-end report required under paragraph (1)(D)— (i) does not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading; and (ii) fairly presented in all material respects the information required under paragraph (1)(D) for the period presented in such report. (C) Criminal Penalties Whoever— (i) submits a certification set forth in subparagraph (B) knowing that the report to which the certification relates does not fairly present, in all material respects, the information required to be contained in such report shall be fined not more than $1,000,000 or imprisoned not more than 10 years, or both; or (ii) willfully submits a certification set forth in subparagraph (B) knowing that the report to which the certification relates does not fairly present, in all material respects, the information required to be contained in such report shall be fined not more than $5,000,000, or imprisoned not more than 20 years, or both. (5) Capital, liquidity, risk management, and other requirements (A) In general The primary Federal payment stablecoin regulators shall, jointly and in consultation with the State payment stablecoin regulators, issue rules to establish— (i) capital requirements applicable to a permitted payment stablecoin issuer that— (I) are tailored to the business model and risk profile of a permitted payment stablecoin issuer; (II) do not exceed requirements which are sufficient to ensure the ongoing operations of a permitted payment stablecoin issuer; and (III) if such regulators determine that a capital buffer is necessary to ensure the ongoing operations of a permitted payment stablecoin issuer, may include capital buffers that are tailored to the business model and risk profile of a permitted payment stablecoin issuer; (ii) requirements implementing liquidity standards applicable to reserves described in paragraph (1) for a permitted payment stablecoin issuer, which may not exceed an amount that is sufficient to ensure the financial integrity of a permitted payment stablecoin issuer and the ability of the issuer to meet the financial obligations of the issuer, including redemptions; (iii) reserve asset diversification and interest rate risk management standards applicable to a permitted payment stablecoin issuer that— (I) are tailored to the business model and risk profile of a permitted payment stablecoin issuer; and (II) do not exceed standards which are sufficient to ensure the ongoing operations of a permitted payment stablecoin issuer; and (iv) appropriate operational, compliance, information technology, and cybersecurity risk management standards that are tailored to the business model and risk profile of a permitted payment stablecoin issuer; and (v) requirements regarding the approval of foreign depository institutions that may hold demand deposits of a permitted payment stablecoin issuer. (B) Rule of construction Nothing in this paragraph may 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 permitted payment stablecoin issuers on an individualized basis or by category, taking into consideration the capital structure, business model risk profile, complexity, financial activities, size, and any other risk related factors of permitted payment stablecoin issuers that the primary Federal payment stablecoin regulators determine appropriate; or (ii) the supervisory, regulatory, or enforcement authority of a Federal banking agency (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) or the National Credit Union Administration to further the ability of an institution under the supervision of the Federal banking agency or the National Credit Union Administration to maintain safe and sound operations or comply with this Act. (C) Applicability of existing capital standards (i) Applicability of the Financial Stability Act of 2010 Section 171 of the Financial Stability Act of 2010 (12 U.S.C. 5371) shall not apply to requirements issued under this paragraph. (ii) Rules relating to leverage capital requirements or risk-based capital requirements Where an insured depository institution or depository institution holding company, as defined under section 171(a)(3) of the Financial Stability Act of 2010 (12 U.S.C. 5371(a)(3)), includes, on a consolidated basis, a permitted payment stablecoin issuer, any rule issued by an appropriate Federal banking agency that imposes, on a consolidated basis, a leverage capital requirement or risk-based capital requirement on such insured depository institution or depository institution holding company, shall not require such insured depository institution or depository institution holding company to hold, with respect to the permitted payment stablecoin issuer and its assets and operations, any amount of regulatory capital in excess of the capital that such permitted payment stablecoin issuer must maintain under the capital requirements promulgated pursuant to paragraph (5)(A)(i). (iii) Rulemaking Not later than the date the primary Federal payment stablecoin regulators issue regulations to carry out this section, each Federal banking agency, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813), shall amend or otherwise modify any regulation described in clause (ii) so that it complies with such clause (ii). (6) Treatment under the Bank Secrecy Act A permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the Bank Secrecy Act. (7) Limitation on payment stablecoin activities A permitted payment stablecoin issuer may only— (A) issue payment stablecoins; (B) redeem payment stablecoins; (C) manage related reserves (including purchasing, selling, and holding reserve assets); (D) provide custodial or safekeeping services for payment stablecoins and private keys of payment stablecoins; (E) provide custodial or safekeeping services for reserves, consistent with this Act; (F) undertake other functions that directly support activities described in subparagraphs (A) through (E); and (G) undertake such non-payment stablecoin activities that are allowed by the primary Federal payment stablecoin regulator. (8) Prohibition on yield A permitted payment stablecoin issuer may not pay interest or yield to holders of its payment stablecoins. (9) Regulation of Federal qualified nonbank payment stablecoin issuers by the Comptroller A Federal qualified nonbank payment stablecoin issuer shall be regulated and supervised exclusively by the Comptroller. (b) State-Level regulatory regimes (1) In general A State qualified payment stablecoin issuer may only issue payment stablecoins pursuant to the regulation of a State payment stablecoin regulator of a State with a regulatory regime for issuing payment stablecoins that is certified under this subsection as meeting or exceeding the standards and requirements described in subsection (a). (2) Certification (A) In general Beginning on the date that is 1 year after the date of enactment of this Act or 60 days after the rulemaking described in subsection (d) is completed, whichever is earlier, a State payment stablecoin regulator may submit to the Secretary of the Treasury a certification that the regulatory regime of the State for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection (a). (B) Validity of certification A certification under subparagraph (A) shall be valid upon submission and remain valid unless the Secretary of the Treasury rejects the certification under paragraph (6). (3) Form of certification A certification described under paragraph (2)— (A) shall contain an attestation that the regulatory regime of the State for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection (a); and (B) may include supporting information, such as a copy of any State law or regulation implementing such standards and requirements. (4) Report and attestation (A) In general A State payment stablecoin regulator with a valid certification under this subsection that has made subsequent material changes to its State regulatory regime and wishes to maintain a valid certification shall submit to the Secretary of the Treasury an explanation of all such material changes. (B) Form of material changes explanation With respect to a State payment stablecoin regulator that submits an explanation of material changes to the State regulatory regime under subparagraph (A), the payment stablecoin regulator shall make such explanation in the same manner, and containing the same attestation, as described under paragraph (3) for a certification. (5) Advisory opinions on proposed laws or regulations Upon request of any State payment stablecoin regulator, the Secretary of the Treasury shall— (A) review any proposed law or regulation of the State provided by the State payment stablecoin regulator; and (B) not later than 30 days after being provided the proposed law or regulation, either— (i) inform the State payment stablecoin regulator that the proposed law or regulation is consistent with a State regulatory regime for issuing payment stablecoins that meets or exceeds the standards and requirements described in subsection (a); or (ii) provide the State payment stablecoin regulator with a detailed explanation of why the proposed law or regulation is not consistent with a State regulatory regime for issuing payment stablecoins that meets or exceeds the standards and requirements described in subsection (a). (6) Regimes that are not substantially similar (A) In general The Secretary of the Treasury may reject a certification under paragraph (3) or a certification with respect to which a State payment stablecoin regulator has submitted an explanation of material changes under paragraph (4), if the Secretary, not later than 30 days after the date on which the initial certification or explanation of material changes is submitted— (i) determines that the State regulatory regime does not meet or exceed the standards and requirements described in subsection (a); and (ii) provides the State payment stablecoin regulator with a written explanation for the rejection, describing the reasoned basis for the rejection with sufficient detail such that the State can bring the State regulatory regime into compliance based on the explanation. (B) Opportunity to cure (i) In general With respect to a rejection described under subparagraph (A), the Secretary of the Treasury shall provide the State payment stablecoin regulator with not less than a 180-day period from the date on which the State payment stablecoin regulator is notified of such rejection to— (I) make such changes as may be necessary to ensure the regulatory regime of the State for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection (a); and (II) resubmit the certification or explanation of material changes. (ii) Rejection If, after a State payment stablecoin regulator makes changes described under clause (i) during the period described in clause (i), the Secretary of the Treasury determines that the certification should be rejected, the Secretary of the Treasury shall, not later than 30 days after such determination, provide the State payment stablecoin regulator with a written explanation for the determination, describing the reasoned basis for the determination with sufficient detail such that the State can bring its regime into compliance based on the explanation. (C) Appeal of rejection (i) In general A State payment stablecoin regulator that has had a certification rejected under this paragraph may, after the cure period described under subparagraph (B)(i), appeal such rejection to the United States Court of Appeals for the District of Columbia Circuit, which shall, upon a determination that the regulatory regime of the State for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection (a), reverse such rejection. (ii) Review by the Supreme Court The judgment and decree of the Court of Appeals shall be final, except that the same shall be subject to review by the Supreme Court upon certiorari, as provided in section 1254 of title 28. (D) Right to resubmit A State payment stablecoin regulator that has had a certification rejected under this paragraph may resubmit a new certification under paragraph (2). (7) Appropriate exemptive relief The Secretary of the Treasury shall issue such rules and orders as are necessary to provide appropriate exemptive relief and safe harbors for State qualified payment stablecoin issuers to continue operations during such periods in which any rules promulgated pursuant to subsection (a) materially affect a previously certified State regulatory regime’s ability to meet or exceed the standards and requirements described in subsection (a). (c) Not insured by the Federal Government; misrepresentation of insured status (1) In general Payment stablecoins are not backed by the full faith and credit of the United States, guaranteed by the United States Government, subject to deposit insurance by the Corporation, or subject to share insurance by the National Credit Union Administration. (2) Misrepresentation of insured status It shall be unlawful to represent that a payment stablecoin is backed by the full faith and credit of the United States, guaranteed by the United States Government, or subject to Federal deposit insurance or Federal share insurance. (3) Disclosure Permitted payment stablecoin issuers shall clearly and prominently disclose on their website that payment stablecoins issued by such permitted payment stablecoin issuer are not guaranteed by the United States Government, covered by deposit insurance by the Federal Deposit Insurance Corporation, or by share insurance of the National Credit Union Administration. (4) Penalties Any person who violates this subsection may be prosecuted to the fullest extent of the law, including, as applicable, under— (A) section 18(a)(4) of the Federal Deposit Insurance Act (relating to the prohibition on false advertising in connection with deposit insurance, the misuse of FDIC names, and misrepresentations of insured status); (B) section 709 of title 18, United States Code (relating to false advertising or misuse of names to indicate a Federal agency); (C) criminal penalties under title 18, United States Code, related to fraud; and (D) other remedies available under the law. (d) Officers and directors convicted of certain felonies 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— (1) an officer of a payment stablecoin issuer; or (2) a director of a payment stablecoin issuer. (e) Rulemaking (1) In general The primary Federal payment stablecoin regulators may issue such orders and regulations as may be necessary to administer and carry out the requirements of this section, including to establish conditions, and to prevent evasions thereof. (2) Joint issuance of regulation All regulations issued to carry out this section by the primary Federal payment stablecoin regulators shall be issued jointly, after consultation with State payment stablecoin regulators. (3) Rulemaking deadline Not later than the end of the 180-day period beginning on the date of enactment of this Act, the Federal payment stablecoin regulators shall issue regulations to carry out this section.

(a) Standards for the issuance of payment stablecoins (1) In general Each permitted payment stablecoin issuer shall— (A) maintain reserves backing the issuer’s outstanding payment stablecoins on an at least 1 to 1 basis, with reserves comprising— (i) United States 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) at insured depository institutions (including foreign branches and agencies of insured depository institutions) or approved foreign depository institutions (as determined in paragraph (5)(A)(v)) or share drafts (or other deposits that may be withdrawn upon request at any time) at insured credit unions, subject to limitations established by the Corporation and the National Credit Union Administration, respectively, to address safety and soundness risks of such insured depository institutions; (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) repurchase agreements, wherein the permitted payment stablecoin issuer is acting as a seller of securities, or reverse repurchase agreements, wherein the permitted payment stablecoin issuer is acting as a purchaser of securities, with an overnight maturity and that are backed by Treasury bills with a maturity of 93 days or less that are— (I) centrally cleared through a clearing agency registered with the Securities and Exchange Commission; or (II) bilateral, settling either through delivery versus payment or through a tri-party control account, with a counterparty that the issuer has determined to be adequately credit worthy even in the event of severe market stress; or (v) securities issued by an investment company under section 8(a) of the Investment Company Act of 1940 (15 U.S.C. 80a-8) that operates as a money market fund in compliance with Rule 2a-7 under the Investment Company Act of 1940 (or any successor rule) and that are invested solely in the underlying assets described in clauses (i) through (iv); (B) publicly disclose the issuer’s redemption policy; (C) establish procedures for timely redemption of the issuer’s outstanding payment stablecoins; and (D) publish a report on 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 under subparagraph (A). (2) Eligibility Nothing in this Act shall be construed as expanding or contracting legal eligibility to make deposits, or hold an account, at a Federal reserve bank. (3) Prohibition on rehypothecation Reserves described under paragraph (1)(A) may not be pledged, rehypothecated, or reused, except for the purpose of satisfying obligations associated with reserves described under paragraph (1)(A)(iv). (4) Monthly certification; examination of reports by registered public accounting firm (A) In general A permitted payment stablecoin issuer shall, each month, have the information disclosed in the previous month-end report required under paragraph (1)(D) examined by an independent registered public accounting firm. (B) Certification Each month, the Chief Executive Officer and Chief Financial Officer of a permitted payment stablecoin issuer shall submit to, as applicable, the primary Federal payment stablecoin regulator or, in the case of a State qualified payment stablecoin issuer, the State payment stablecoin regulator, a certification that, based on such officers’ knowledge, the previous month-end report required under paragraph (1)(D)— (i) does not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading; and (ii) fairly presented in all material respects the information required under paragraph (1)(D) for the period presented in such report. (C) Criminal Penalties Whoever— (i) submits a certification set forth in subparagraph (B) knowing that the report to which the certification relates does not fairly present, in all material respects, the information required to be contained in such report shall be fined not more than $1,000,000 or imprisoned not more than 10 years, or both; or (ii) willfully submits a certification set forth in subparagraph (B) knowing that the report to which the certification relates does not fairly present, in all material respects, the information required to be contained in such report shall be fined not more than $5,000,000, or imprisoned not more than 20 years, or both. (5) Capital, liquidity, risk management, and other requirements (A) In general The primary Federal payment stablecoin regulators shall, jointly and in consultation with the State payment stablecoin regulators, issue rules to establish— (i) capital requirements applicable to a permitted payment stablecoin issuer that— (I) are tailored to the business model and risk profile of a permitted payment stablecoin issuer; (II) do not exceed requirements which are sufficient to ensure the ongoing operations of a permitted payment stablecoin issuer; and (III) if such regulators determine that a capital buffer is necessary to ensure the ongoing operations of a permitted payment stablecoin issuer, may include capital buffers that are tailored to the business model and risk profile of a permitted payment stablecoin issuer; (ii) requirements implementing liquidity standards applicable to reserves described in paragraph (1) for a permitted payment stablecoin issuer, which may not exceed an amount that is sufficient to ensure the financial integrity of a permitted payment stablecoin issuer and the ability of the issuer to meet the financial obligations of the issuer, including redemptions; (iii) reserve asset diversification and interest rate risk management standards applicable to a permitted payment stablecoin issuer that— (I) are tailored to the business model and risk profile of a permitted payment stablecoin issuer; and (II) do not exceed standards which are sufficient to ensure the ongoing operations of a permitted payment stablecoin issuer; and (iv) appropriate operational, compliance, information technology, and cybersecurity risk management standards that are tailored to the business model and risk profile of a permitted payment stablecoin issuer; and (v) requirements regarding the approval of foreign depository institutions that may hold demand deposits of a permitted payment stablecoin issuer. (B) Rule of construction Nothing in this paragraph may 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 permitted payment stablecoin issuers on an individualized basis or by category, taking into consideration the capital structure, business model risk profile, complexity, financial activities, size, and any other risk related factors of permitted payment stablecoin issuers that the primary Federal payment stablecoin regulators determine appropriate; or (ii) the supervisory, regulatory, or enforcement authority of a Federal banking agency (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) or the National Credit Union Administration to further the ability of an institution under the supervision of the Federal banking agency or the National Credit Union Administration to maintain safe and sound operations or comply with this Act. (C) Applicability of existing capital standards (i) Applicability of the Financial Stability Act of 2010 Section 171 of the Financial Stability Act of 2010 (12 U.S.C. 5371) shall not apply to requirements issued under this paragraph. (ii) Rules relating to leverage capital requirements or risk-based capital requirements Where an insured depository institution or depository institution holding company, as defined under section 171(a)(3) of the Financial Stability Act of 2010 (12 U.S.C. 5371(a)(3)), includes, on a consolidated basis, a permitted payment stablecoin issuer, any rule issued by an appropriate Federal banking agency that imposes, on a consolidated basis, a leverage capital requirement or risk-based capital requirement on such insured depository institution or depository institution holding company, shall not require such insured depository institution or depository institution holding company to hold, with respect to the permitted payment stablecoin issuer and its assets and operations, any amount of regulatory capital in excess of the capital that such permitted payment stablecoin issuer must maintain under the capital requirements promulgated pursuant to subparagraph (A)(i). (iii) Rulemaking Not later than the date the primary Federal payment stablecoin regulators issue regulations to carry out this section, each Federal banking agency, as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813), shall amend or otherwise modify any rule described in clause (ii) so that it complies with such clause (ii). (6) Treatment Under the Bank Secrecy Act (A) In general A permitted payment stablecoin issuer shall be treated as a financial institution for purposes of the Bank Secrecy Act. (B) Regulations The Secretary of the Treasury, acting through the Director of the Financial Crimes Enforcement Network, and in consultation with the primary Federal payment stablecoin regulators, shall issue regulations to apply the Bank Secrecy Act to permitted payment stablecoin issuers that are tailored to the size and complexity of such issuers, including by requiring each permitted payment stablecoin issuer to— (i) establish and maintain an anti-money laundering and countering the financing of terrorism program, which shall include— (I) an appropriate risk assessment; (II) the development of internal policies, procedures, and controls; (III) the designation of a compliance officer; (IV) an ongoing employee training program; and (V) an independent audit function to test such program; (ii) retain appropriate records of payment stablecoin transactions; (iii) monitor and report suspicious activity, which may include use of appropriate distributed ledger analytics; and (iv) maintain an effective customer identification program to identify and verify initial holders of a payment stablecoin for the purposes of carrying out appropriate customer due diligence. (7) Compliance with sanctions A permitted payment stablecoin issuer shall comply with all laws and regulations related to United States sanctions administered by the Office of Foreign Assets Control. (8) Limitation on payment stablecoin activities A permitted payment stablecoin issuer may only— (A) issue payment stablecoins; (B) redeem payment stablecoins; (C) manage related reserves (including purchasing, selling, and holding reserve assets); (D) provide custodial or safekeeping services for payment stablecoins and private keys of payment stablecoins; (E) provide custodial or safekeeping services for reserves, consistent with this Act; (F) undertake other functions that directly support activities described in subparagraphs (A) through (E); and (G) undertake such non-payment stablecoin activities that are allowed by the primary Federal payment stablecoin regulator. (9) Prohibition on yield A permitted payment stablecoin issuer may not pay interest or yield to holders of its payment stablecoins. (10) Regulation of Federal qualified nonbank payment stablecoin issuers by the Comptroller A Federal qualified nonbank payment stablecoin issuer shall be regulated and supervised exclusively by the Comptroller. (b) State-level regulatory regimes (1) In general A State qualified payment stablecoin issuer may only issue payment stablecoins pursuant to the regulation of a State payment stablecoin regulator of a State with a regulatory regime for issuing payment stablecoins that is certified under this subsection as meeting or exceeding the standards and requirements described in subsection (a). (2) Certification (A) In general Beginning on the date that is 1 year after the date of enactment of this Act or 60 days after the rulemaking described in subsection (d) is completed, whichever is earlier, a State payment stablecoin regulator may submit to the Secretary of the Treasury a certification that the regulatory regime of the State for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection (a). (B) Validity of certification A certification under subparagraph (A) shall be valid upon submission and remain valid unless the Secretary of the Treasury rejects the certification under paragraph (6). (3) Form of certification A certification described under paragraph (2)— (A) shall contain an attestation that the regulatory regime of the State for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection (a); and (B) may include supporting information, such as a copy of any State law or regulation implementing such standards and requirements. (4) Report and attestation (A) In general A State payment stablecoin regulator with a valid certification under this subsection that has made subsequent material changes to its State regulatory regime and wishes to maintain a valid certification shall submit to the Secretary of the Treasury an explanation of all such material changes. (B) Form of material changes explanation With respect to a State payment stablecoin regulator that submits an explanation of material changes to the State regulatory regime under subparagraph (A), the payment stablecoin regulator shall make such explanation in the same manner, and containing the same attestation, as described under paragraph (3) for a certification. (5) Advisory opinions on proposed laws or regulations Upon request of any State payment stablecoin regulator, the Secretary of the Treasury shall— (A) review any proposed law or regulation of the State provided by the State payment stablecoin regulator; and (B) not later than 30 days after being provided the proposed law or regulation, either— (i) inform the State payment stablecoin regulator that the proposed law or regulation is consistent with a State regulatory regime for issuing payment stablecoins that meets or exceeds the standards and requirements described in subsection (a); or (ii) provide the State payment stablecoin regulator with a detailed explanation of why the proposed law or regulation is not consistent with a State regulatory regime for issuing payment stablecoins that meets or exceeds the standards and requirements described in subsection (a). (6) Regimes that are not substantially similar (A) In general The Secretary of the Treasury may reject a certification under paragraph (2) or a certification with respect to which a State payment stablecoin regulator has submitted an explanation of material changes under paragraph (4), if the Secretary, not later than 30 days after the date on which the initial certification or explanation of material changes is submitted— (i) determines that the State regulatory regime does not meet or exceed the standards and requirements described in subsection (a); and (ii) provides the State payment stablecoin regulator with a written explanation for the rejection, describing the reasoned basis for the rejection with sufficient detail such that the State can bring the State regulatory regime into compliance based on the explanation. (B) Opportunity to cure (i) In general With respect to a rejection described under subparagraph (A), the Secretary of the Treasury shall provide the State payment stablecoin regulator with not less than a 180-day period from the date on which the State payment stablecoin regulator is notified of such rejection to— (I) make such changes as may be necessary to ensure the regulatory regime of the State for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection (a); and (II) resubmit the certification or explanation of material changes. (ii) Rejection If, after a State payment stablecoin regulator makes changes described under clause (i) during the period described in clause (i), the Secretary of the Treasury determines that the certification should be rejected, the Secretary of the Treasury shall, not later than 30 days after such determination, provide the State payment stablecoin regulator with a written explanation for the determination, describing the reasoned basis for the determination with sufficient detail such that the State can bring its regime into compliance based on the explanation. (C) Appeal of rejection (i) In general A State payment stablecoin regulator that has had a certification rejected under this paragraph may, after the cure period described under subparagraph (B)(i), appeal such rejection to the United States Court of Appeals for the District of Columbia Circuit, which shall, upon a determination that the regulatory regime of the State for issuing payment stablecoins meets or exceeds the standards and requirements described in subsection (a), reverse such rejection. (ii) Review by the Supreme Court The judgment and decree of the Court of Appeals shall be final, except that the same shall be subject to review by the Supreme Court upon certiorari, as provided in section 1254 of title 28, United States Code. (D) Right to resubmit A State payment stablecoin regulator that has had a certification rejected under this paragraph may resubmit a new certification under paragraph (2). (7) Appropriate exemptive relief The Secretary of the Treasury shall issue such rules and orders as are necessary to provide appropriate exemptive relief and safe harbors for State qualified payment stablecoin issuers to continue operations during such periods in which any rules promulgated pursuant to subsection (a) materially affect a previously certified State regulatory regime’s ability to meet or exceed the standards and requirements described in subsection (a). (c) Not insured by the Federal Government; misrepresentation of insured status (1) In general Payment stablecoins are not backed by the full faith and credit of the United States, guaranteed by the United States Government, subject to deposit insurance by the Corporation, or subject to share insurance by the National Credit Union Administration. (2) Misrepresentation of insured status It shall be unlawful to represent that a payment stablecoin is backed by the full faith and credit of the United States, guaranteed by the United States Government, or subject to Federal deposit insurance or Federal share insurance. (3) Disclosure Permitted payment stablecoin issuers shall clearly and prominently disclose on their website that payment stablecoins issued by such permitted payment stablecoin issuer are not guaranteed by the United States Government, covered by deposit insurance by the Federal Deposit Insurance Corporation, or covered by share insurance of the National Credit Union Administration. (4) Penalties Any person who violates this subsection may be prosecuted to the fullest extent of the law, including, as applicable, under— (A) section 18(a)(4) of the Federal Deposit Insurance Act (12 U.S.C. 1828(a)(4); relating to the prohibition on false advertising in connection with deposit insurance, the misuse of FDIC names, and misrepresentations of insured status); (B) section 709 of title 18, United States Code (relating to false advertising or misuse of names to indicate a Federal agency); (C) criminal penalties under title 18, United States Code, related to fraud; and (D) other remedies available under the law. (d) Officers and directors convicted of certain felonies 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— (1) an officer of a payment stablecoin issuer; or (2) a director of a payment stablecoin issuer. (e) Rulemaking (1) In general The primary Federal payment stablecoin regulators may issue such orders and regulations as may be necessary to administer and carry out the requirements of this section, including to establish conditions, and to prevent evasions thereof. (2) Joint issuance of regulation All regulations issued to carry out this section by the primary Federal payment stablecoin regulators shall be issued jointly, after consultation with State payment stablecoin regulators. (3) Rulemaking deadline Not later than the end of the 180-day period beginning on the date of enactment of this Act, the Federal payment stablecoin regulators shall issue regulations to carry out this section.