Authority of banking institutions

(a) Rule of construction Nothing in this Act may be construed to limit the authority of a depository institution, Federal credit union, State credit union, national bank, or trust company to engage in activities permissible pursuant to applicable State and Federal law, including— (1) accepting or receiving deposits or shares (in the case of a credit union), and issuing digital assets that represent those deposits or shares; (2) utilizing a distributed ledger for the books and records of the entity and to effect intrabank transfers; and (3) providing custodial services for payment stablecoins, private keys of payment stablecoins, or reserves backing payment stablecoins. (b) Regulatory review Entities regulated by the primary Federal payment stablecoin regulators are authorized to engage in the payment stablecoin activities and investments contemplated by this Act, including acting as a principal or agent with respect to any payment stablecoin and payment of fees to facilitate customer transactions. The primary Federal payment stablecoin regulators shall review all existing guidance and regulations, and if necessary, amend or promulgate new regulations and guidance, to clarify that regulated entities are authorized to engage in such activities and investments. (c) Treatment of custody activities The appropriate Federal banking agency, the National Credit Union Administration (in the case of a credit union), and the Securities and Exchange Commission may not require a depository institution, national bank, Federal credit union, State credit union, or trust company, or any affiliate thereof— (1) to include digital assets held in custody that are not owned by the entity as a liability on the financial statement or balance sheet of the entity, including payment stablecoin custody or safekeeping activities; or (2) to hold in custody or safekeeping regulatory capital against digital assets and reserves backing such assets described in section 4(a)(1)(A), except as necessary to mitigate against operational risks inherent in custody or safekeeping services, as determined by— (A) the appropriate Federal banking agency; (B) the National Credit Union Administration (in the case of a credit union); (C) a State bank supervisor; or (D) a State credit union supervisor. (d) State-chartered depository institutions (1) In general A State-chartered depository institution chartered under the banking laws of a State shall not be required to obtain State, that has a charter, license, or other authorization to do business from subsidiary that is a State to permitted payment stablecoin issuer, may engage in the business of money transmission, transmission or provide custodial services through the issuance of permitted payment instruments or stored value, custodial services, or stablecoin issuer in any similar or related activity, State if such State-chartered depository institution is— (1) subject to prudential regulation and supervision by the chartering State in a manner that is substantially similar to the prudential regulation and supervision applicable to insured depository institutions chartered by such State; and (2) (A) required by the laws or regulations of the chartering home State to establish and maintain reserves for adequate liquidity, and such liquidity is regularly reassessed by the home State banking supervisor to take into account any outstanding deposit liabilities changes in an amount equal the financial condition and risk profile of the institution, including any uninsured deposits maintained by such institution; and (B) required by the laws or regulations of the home State to establish and maintain adequate capital, and such capital is regularly reassessed by the home State banking supervisor to take into account any changes in the financial condition and risk profile of the institution, including any uninsured deposits maintained by such institution. (2) Rule of construction Nothing in this section shall limit, or greater than be construed to limit, the authority of a host State bank regulator, to perform examinations of a depository institution’s subsidiary permitted payment stablecoin issuer or activities conducted through the permitted payment stablecoin issuer to ensure compliance with host State consumer protection laws that the host State bank regulator has specific jurisdiction to enforce, which shall apply to such liabilities and to hold such reserves in a manner that is at least as protective of customers as is required under institution consistent with section 8. 7(f). (e) Definitions In this section: (1) Depository institution; Home State bank supervisor The terms term home State means the State by which the depository institution and is chartered. (2) Host State bank supervisor have the meanings given those terms under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813). (2) Federal credit union; State credit union The terms Federal credit union and State credit union have the meanings given those terms in section 101 of the Federal Credit Union Act (12 U.S.C. 1752). (3) State credit union supervisor The term host State credit union supervisor has means a State in which a depository institution establishes a branch, solicits customers, or otherwise engages in business activities, other than the meaning given that term in section 6003 of the Anti-Money Laundering Act of 2020 (31 U.S.C. 5311 note).home State.