The U.S. Stable Act would regulate dollar-pegged payment stablecoins like bank deposits. It authorizes only licensed issuers, demands fully cash-equivalent 1:1 reserves, sets strict capital, liquidity, consumer-protection, AML, KYC, and disclosure rules, and empowers federal agencies to supervise, examine, and enforce compliance.
- Obtain approval as an eligible issuer.
- Establish a U.S. presence.
- Maintain 1:1 reserves in eligible assets.
- Segregate reserves and customer assets.
- Publicly disclose monthly reserve composition.
- Comply with AML, KYC, and Travel Rule.
- Redeem stablecoins at par value.
- Meet required capital and liquidity standards.
What entities are eligible issuers of payment stablecoins under the US Stable Act?
Under the U.S. Stable Act, only specific entities may issue payment stablecoins. These are limited to subsidiaries of insured banks, approved federal nonbank issuers, and approved state issuers.
- Permit subsidiaries of insured banks to issue stablecoins.
- Allow federally approved nonbank entities to issue stablecoins.
- Authorize state-approved entities to issue stablecoins.
- Define eligible issuers as those approved under Section 5.
What are the Exchange Listing Conditions or Trading Restrictions for Stablecoins Under the US Stable Act?
Under the U.S. Stable Act, exchanges must list only payment stablecoins issued by authorized “permitted payment stablecoin issuers.” The Act also prohibits the listing of newly created endogenously collateralized stablecoins during a two-year moratorium.
- List only payment stablecoins from permitted issuers.
- Do not list newly created endogenously collateralized stablecoins during the moratorium.
What are the supervisory intervention powers and enforcement actions under the US Stable Act?
Under the U.S. Stable Act, primary federal regulators have extensive powers to supervise and intervene with payment stablecoin issuers. This includes issuing orders, preventing violations, and imposing penalties for non-compliance.
- Issue orders and regulations to administer requirements.
- Stop issuance for violations of the Act or conditions.
- Issue cease-and-desist orders for suspected violations.
- Order corrective actions for violations.
- Remove or bar institution-affiliated parties for violations.
- Impose temporary cease-and-desist orders in urgent situations.
- Levy daily civil penalties for unlawful issuance.
- Impose daily civil penalties for permitted issuer violations.
- Take enforcement action against state-qualified issuers in exigent circumstances.
What are the local presence and physical presence requirements for stablecoin issuers under the US Stable Act?
Under the U.S. Stable Act, issuers of payment stablecoins must satisfy local presence requirements. This typically involves being established within the United States or a specific U.S. state or territory. Various issuer types, including bank subsidiaries and state-chartered entities, inherently meet this criterion.
Key obligations include:
- Operate within a U.S. regulatory framework.
- Be legally established in a U.S. state or territory.
- Be approved by that jurisdiction’s specific payment stablecoin regulator.
- Be chartered by the U.S. Comptroller of the Currency (OCC).
- Function as U.S. domestic institutions.
What are the Whitepaper/Prospectus and Disclosure Requirements under the US Stable Act?
The provided documentation does not specify detailed whitepaper or prospectus requirements for stablecoin issuers under the U.S. Stable Act.
What are the requirements for Tokenized Asset Reserve Segregation and Custody under the US Stable Act?
Under the U.S. Stable Act, payment stablecoin reserves must be held in specific secure locations. These reserves cannot be pledged, rehypothecated, or reused except for limited liquidity purposes under certain conditions.
- Hold specific reserve components in insured demand deposits or shares.
- Maintain reserves in central-bank reserve deposits.
- Prohibit pledging, rehypothecating, or reusing reserves.
- Allow limited reserve reuse under specific conditions for redemption liquidity.
What custody safeguards must intermediaries follow under the US Stable Act?
Intermediaries providing custody for stablecoins under the U.S. Stable Act must be regulated, safeguard customer assets from intermediary creditors, and keep assets segregated. They must also submit required information to the Board.
- Supervised intermediaries must segregate, separately account for, and not commingle customer assets.
- Treat customer assets as belonging to the customer.
- Safeguard customer assets from the intermediary’s creditors.
- Submit information on business and asset-protection processes.
- Banking institutions may not need to list client assets as liabilities.
- Banking institutions may not need to hold additional capital for custody.
What are the attestation and audit frequency requirements under the US Stable Act?
Under the U.S. Stable Act, permitted payment stablecoin issuers must have their month-end reserve reports examined monthly by a registered public accounting firm.
- Have month-end reserve reports examined monthly.
- Use a registered public accounting firm for examinations.
- Detail outstanding stablecoins in reports.
- Detail reserve composition in reports.
What Usage Caps or Systemic Risk Triggers Apply to Stablecoins under the US Stable Act?
Information regarding usage caps or systemic-risk triggers for stablecoins under the U.S. Stable Act was not specified in the provided documentation.
What are the Issuer-AML/KYC obligations for stablecoin issuers under the US Stable Act?
Under the U.S. Stable Act, permitted payment stablecoin issuers are classified as financial institutions subject to the Bank Secrecy Act (BSA). Issuer-affiliated parties must also adhere to BSA provisions.
- Comply with the BSA as financial institutions.
- Adhere to BSA anti-money-laundering requirements.
- Ensure institution-affiliated parties comply with the BSA.
What is the Scope of Stablecoins and other digital assets covered by the US Stable Act?
The U.S. Stable Act defines payment stablecoins as digital assets pegged to a national currency, intended for payments, and redeemable by the issuer at a fixed value. It explicitly excludes certain assets and places a moratorium on specific endogenously collateralized types.
- Define digital asset as value on a cryptographically-secured ledger.
- Peg payment stablecoins to national currency or deposits.
- Ensure stablecoins are redeemable for fixed monetary value.
- Represent stablecoins maintain stable value relative to peg.
- Exclude national currencies and securities from definition.
- Impose moratorium on certain new endogenously collateralized stablecoins.
- Clarify permitted stablecoins are not securities under several acts.
What are the Issuer-own-capital-or-solvency-buffer and liquidity requirements for payment stablecoin issuers under the US Stable Act?
Federal regulators establish capital and liquidity rules for payment stablecoin issuers under the U.S. Stable Act. These rules ensure ongoing operations, financial integrity, and the ability to meet obligations.
- Establish capital rules for payment stablecoin issuers.
- Establish liquidity rules for payment stablecoin issuers.
- Require capital sufficient for ongoing operations.
- Require liquidity sufficient for redemptions.
- Demonstrate financial resources to meet rules during application.
- Hold additional capital for custody services if a depository or trust.
What are the Redemption Rights and Deadlines for stablecoins under the US Stable Act?
Issuers must redeem payment stablecoins for a fixed amount of monetary value (at par). They are required to publicly disclose their redemption policy and establish procedures ensuring timely redemption.
- Redeem payment stablecoins at fixed monetary value.
- Publicly disclose redemption policy.
- Establish procedures for timely redemption.
- Prohibit reserve rehypothecation unless for meeting redemptions.
- Meet liquidity requirements for redemptions.
- Engage in issuing and redeeming as permissible activities.
What is the Travel Rule coverage for transfers under the US Stable Act?
Under the U.S. Stable Act, permitted payment stablecoin issuers are treated as financial institutions subject to the BSA, including the Travel Rule.
- Treat payment stablecoin issuers as financial institutions.
- Comply with BSA requirements.
- Collect originator and beneficiary information for qualifying transfers.
- Transmit originator and beneficiary information for qualifying transfers.
What is the stance on Permissionless transfer allowed and peer-to-peer transfer capability under the US Stable Act?
The U.S. Stable Act acknowledges distributed ledger technology and supports self-custody by exempting providers of self-custody tools.
- Acknowledge distributed ledger technology.
- Note public ledgers support peer-to-peer transfers.
- Exempt self-custody tool providers.
- Support users holding private keys directly.
- Enable peer-to-peer on-chain transfers without intermediaries.
What are the reserve ratio and eligible asset requirements for payment stablecoins under the US Stable Act?
The U.S. Stable Act requires permitted payment stablecoin issuers to maintain reserves equal to their outstanding stablecoins on a one-to-one basis. Reserves must consist of specific liquid assets and generally cannot be pledged or reused.
- Maintain reserves on a one-to-one basis.
- Include U.S. currency and insured deposits.
- Include short-term Treasury bills.
- Include certain repurchase agreements.
- Prohibit pledging or reusing reserves.
- Allow pledging Treasury bills for short-term repurchase agreements under specific conditions.
What are the Public reserve composition disclosure requirements for stablecoin issuers under the US Stable Act?
Payment stablecoin issuers must publish the monthly composition of their reserves publicly on their website.
- Publish monthly reserve composition on website.
- Include total outstanding stablecoins in publication.
- Detail reserve amount and composition.
What holder identity requirements apply to stablecoin issuers and custodians under the US Stable Act?
Under the U.S. Stable Act, permitted payment stablecoin issuers are classified as financial institutions and must comply with BSA provisions for customer identification and AML rules.
- Classify issuers as financial institutions.
- Comply with BSA provisions.
- Perform customer identification (KYC) checks.
- Implement anti-money-laundering measures.
- Meet conditions for custodial services.
- Be subject to financial-authority supervision.
- Adhere to KYC/AML for clients providing custody.
How is Retail Availability and consumer access addressed under the US Stable Act?
Under the U.S. Stable Act, payment stablecoins are intended for broad use, including by retail consumers. The Act ensures accessibility, considers consumer benefits for issuer approval, and provides protections for retail users’ assets.
- Allow use by “any person,” including individuals.
- Permit payment stablecoins for broad transaction use.
- Consider benefits to consumers in issuer approvals.
- Require custodians to treat customer assets as customer property.
- Permit customers to use self-custody options.
- Analyze consumer notices and disclosures in mandated studies.
What are the licensing and supervision requirements for stablecoin issuers under the US Stable Act?
The U.S. Stable Act establishes distinct federal and state primary regulators for payment stablecoin issuers based on entity type. Federal regulators jointly set capital, liquidity, and risk rules.
- Establish primary federal and state payment stablecoin regulators.
- Mandate joint rules for capital, liquidity, and risk management.
- Require federal issuers to submit an application for approval.
- Authorize federal regulators to issue necessary orders and regulations.
- Supervise and examine federal nonbank payment stablecoin issuers.
- Grant federal regulators authority to suspend or revoke registration.
- Assign state regulators supervision and enforcement authority for state issuers.
What Failure/Resolution-Regime requirements exist for stablecoin issuers under the US Stable Act?
Under the U.S. Stable Act, regulators can issue cease-and-desist orders to address risks such as insolvency. Custodians must protect customer assets from creditors, treating them as customer property.
- Regulators can issue temporary cease-and-desist orders.
- Orders may prevent insolvency or asset dissipation.
- Custodians must treat customer assets as belonging to customers.
- Custodians must protect customer assets from custodian creditors.
- Custodians must separately account for customer assets.
- Custodians must not commingle customer and firm assets.
What are the Idiosyncratic Details and Special Provisions under the US Stable Act?
The U.S. Stable Act includes regulatory nuances like automatic application approval timelines and safe-harbor provisions. It also outlines state–federal coordination and clarifies exclusions for banking activities, custody providers, and certain securities definitions.
- Deem applications approved automatically after 120 days if no decision is made.
- Waive requirements via safe harbor for entities with pending applications.
- Take enforcement actions against institution-affiliated parties up to six years after they leave.
- Delegate state supervisory authority to the Federal Reserve Board via agreement.
- Implement a two-year moratorium on certain endogenously collateralized stablecoins.
- Exempt payment stablecoins from various federal securities definitions.
- Do not restrict banking-institution activities like deposit tokens or custody.