I 

116TH CONGRESS 

2D SESSION H. R. 8827 

To amend the Federal Deposit Insurance Act to provide for the classification 

and regulation of stablecoins, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 30, 2020 

Ms. TLAIB (for herself, Mr. LYNCH, and Mr. GARCI ́A of Illinois) introduced 

the following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Federal Deposit Insurance Act to provide 

for the classification and regulation of stablecoins, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stablecoin Classifica5 tion and Regulation Act of 2020’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) Article I, Section 8, Clause 5 of the United 

9 States Constitution provides that Congress shall 

10 have the power ‘‘to coin money, regulate the value 


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1 thereof, and of foreign coin, and fix the standard of 

2 weights and measures’’. 

3 (2) Section 2A of the Federal Reserve Act (12 

4 U.S.C. 225a) provides that the mandate of the 

5 Board of Governors of the Federal Reserve System 

6 is to ‘‘promote effectively the goals of maximum em7 ployment, stable prices, and moderate long-term in8 terest rates’’. 

9 (3) Section 21(a) of the Banking Act of 1933 

10 (12 U.S.C. 378(a)) provides in part that: 

11 ‘‘(a) After the expiration of one year after [June 16, 

12 1933] it shall be unlawful . . . 

13 ‘‘(2) For any person, firm, corporation, associa14 tion, business trust, or other similar organization to 

15 engage, to any extent whatever with others than his 

16 or its officers, agents or employees, in the business 

17 of receiving deposits subject to check or to repay18 ment upon presentation of a pass book, certificate of 

19 deposit, or other evidence of debt, or upon request 

20 of the depositor, unless such person, firm, corpora21 tion, association, business trust, or other similar or22 ganization (A) shall be incorporated under, and au23 thorized to engage in such business by, the laws of 

24 the United States or of any State, Territory, or Dis25 trict, and subjected, by the laws of the United 


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1 States, or of the State, Territory, or District where2 in located, to examination and regulation, or (B) 

3 shall be permitted by the United States, any State, 

4 territory, or district to engage in such business and 

5 shall be subjected by the laws of the United States, 

6 or such State, territory, or district to examination 

7 and regulations or, (C) shall submit to periodic ex8 amination by the banking authority of the State 

9 Territory, or District where such business is carried 

10 on and shall make and publish periodic reports of its 

11 condition, exhibiting in detail its resources and li12 abilities, such examination and reports to be made 

13 and published at the same times and in the same 

14 manner and under the same conditions as required 

15 by the law of such State, Territory, District in the 

16 case of incorporated banking institutions engaged in 

17 such business in the same locality.’’. 

18 (4) Section 3(l) of the Federal Deposit Insur19 ance Act (12 U.S.C. 1813(l)) provides that under 

20 the Federal Deposit Insurance Act, the term ‘‘de21 posit’’ means: 

22 ‘‘(1) the unpaid balance of money or its equiva23 lent received or held by a bank or savings associa24 tion in the usual course of business and for which 

25 it has given or is obligated to give credit, either conVerDate Sep 11 2014 00:33 Dec 04, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8827.IH H8827

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1 ditionally or unconditionally, to a commercial, check2 ing, savings, time, or thrift account, or which is evi3 denced by its certificate of deposit, thrift certificate, 

4 investment certificate, certificate of indebtedness, or 

5 other similar name, or a check or draft drawn 

6 against a deposit account and certified by the bank 

7 or savings association, or a letter of credit or a trav8 eler’s check on which the bank or savings association 

9 is primarily liable: Provided, That, without limiting 

10 the generality of the term money or its equivalent, 

11 any such account or instrument must be regarded as 

12 evidencing the receipt of the equivalent of money 

13 when credited or issued in exchange for checks or 

14 drafts or for a promissory note upon which the per15 son obtaining any such credit or instrument is pri16 marily or secondarily liable, or for a charge against 

17 a deposit account, or in settlement of checks, drafts, 

18 or other instruments forwarded to such bank or sav19 ings association for collection, 

20 ‘‘(2) trust funds as defined in this Act received 

21 or held by such bank or savings association, whether 

22 held in the trust department or held or deposited in 

23 any other department of such bank or savings asso24 ciation, 


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1 ‘‘(3) money received or held by a bank or sav2 ings association, or the credit given for money or its 

3 equivalent received or held by a bank or savings as4 sociation, in the usual course of business for a spe5 cial or specific purpose, regardless of the legal rela6 tionship thereby established, including without being 

7 limited to, escrow funds, funds held as security for 

8 an obligation due to the bank or savings association 

9 or others (including funds held as dealers reserves) 

10 or for securities loaned by the bank or savings asso11 ciation, funds deposited by a debtor to meet matur12 ing obligations, funds deposited as advance payment 

13 on subscriptions to United States Government secu14 rities, funds held for distribution or purchase of se15 curities, funds held to meet its acceptances or letters 

16 of credit, and withheld taxes: Provided, That there 

17 shall not be included funds which are received by the 

18 bank or savings association for immediate applica19 tion to the reduction of an indebtedness to the re20 ceiving bank or savings association, or under condi21 tion that the receipt thereof immediately reduces or 

22 extinguishes such an indebtedness, 

23 ‘‘(4) outstanding draft (including advice or au24 thorization to charge a bank’s or a savings associa25 tion’s balance in another bank or savings associaVerDate Sep 11 2014 00:33 Dec 04, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8827.IH H8827

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1 tion), cashier’s check, money order, or other officer’s 

2 check issued in the usual course of business for any 

3 purpose, including without being limited to those 

4 issued in payment for services, dividends, or pur5 chases, and 

6 ‘‘(5) such other obligations of a bank or savings 

7 association as the Board of Directors, after consulta8 tion with the Comptroller of the Currency, and the 

9 Board of Governors of the Federal Reserve System, 

10 shall find and prescribe by regulation to be deposit 

11 liabilities by general usage, except that the following 

12 shall not be a deposit for any of the purposes of this 

13 Act or be included as part of the total deposits or 

14 of an insured deposit: 

15 ‘‘(A) any obligation of a depository institu16 tion which is carried on the books and records 

17 of an office of such bank or savings association 

18 located outside of any State, unless— 

19 ‘‘(i) such obligation would be a deposit 

20 if it were carried on the books and records 

21 of the depository institution, and would be 

22 payable at, an office located in any State; 

23 and 

24 ‘‘(ii) the contract evidencing the obli25 gation provides by express terms, and not 


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1 by implication, for payment at an office of 

2 the depository institution located in any 

3 State; 

4 ‘‘(B) any international banking facility de5 posit, including an international banking facility 

6 time deposit, as such term is from time to time 

7 defined by the Board of Governors of the Fed8 eral Reserve System in regulation D or any suc9 cessor regulation issued by the Board of Gov10 ernors of the Federal Reserve System; and 

11 ‘‘(C) any liability of an insured depository 

12 institution that arises under an annuity con13 tract, the income of which is tax deferred under 

14 section 72 of the Internal Revenue Code of 

15 1986.’’. 

16 (5) Section 1(a) of the Federal Deposit Insur17 ance Act (12 U.S.C. 1811(a)) provides that the Fed18 eral Deposit Insurance Corporation was established 

19 for the purpose of ‘‘insur[ing] . . . the deposits of 

20 all banks . . . which are entitled to the benefits of 

21 insurance’’ under the Federal Deposit Insurance 

22 Act. 

23 SEC. 3. REGULATION OF STABLECOINS. 

24 (a) DEFINITIONS.—Section 3 of the Federal Deposit 

25 Insurance Act (12 U.S.C. 1813) is amended— 


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1 (1) in subsection (l)— 

2 (A) in paragraph (4), by striking ‘‘and’’ at 

3 the end; 

4 (B) by redesignating paragraph (5) as 

5 paragraph (6); and 

6 (C) by inserting after paragraph (4) the 

7 following: 

8 ‘‘(5) stablecoins issued by such bank or savings 

9 association; and’’; 

10 (2) by adding at the end the following: 

11 ‘‘(aa) DEFINITIONS RELATED TO STABLECOINS.— 

12 ‘‘(1) STABLECOIN.—The term ‘stablecoin’ 

13 means any cryptocurrency or other privately-issued 

14 digital financial instrument that— 

15 ‘‘(A) is directly or indirectly distributed to 

16 investors, financial institutions, or the general 

17 public; 

18 ‘‘(B) is— 

19 ‘‘(i) denominated in United States 

20 dollars or pegged to the United States dol21 lar; or 

22 ‘‘(ii) denominated in or pegged to an23 other national or state currency; and 

24 ‘‘(C) is issued— 


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1 ‘‘(i) with a fixed nominal redemption 

2 value; 

3 ‘‘(ii) with the intent of establishing a 

4 reasonable expectation or belief among the 

5 general public that the instrument will re6 tain a nominal redemption value that is so 

7 stable as to render the nominal redemption 

8 value effectively fixed; or 

9 ‘‘(iii) in such a manner that, regard10 less of intent, has the effect of creating a 

11 reasonable expectation or belief among the 

12 general public that the instrument will re13 tain a nominal redemption value that is so 

14 stable as to render the nominal redemption 

15 value effectively fixed. 

16 ‘‘(2) NOMINAL REDEMPTION VALUE.— 

17 ‘‘(A) IN GENERAL.—With respect to a 

18 stablecoin, the term‘ nominal redemption value’ 

19 means the value at which the stablecoin can 

20 readily be converted into United States dollars, 

21 or any other national or state currency, or a 

22 functional monetary equivalent, on demand, at 

23 the time of issuance, or otherwise accepted in 

24 payment or to satisfy debts denominated in 


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1 United States dollars or any other national or 

2 state currency. 

3 ‘‘(B) TREATMENT OF INSTRUMENTS

4 PEGGED TO THE UNITED STATES DOLLAR.— 

5 For purposes of subparagraph (A), the value at 

6 which a stablecoin that is pegged to the United 

7 States dollar or a functional monetary equiva8 lent can readily be converted into United States 

9 dollars, on demand, at the time of issuance 

10 shall be calculated using the express or implied 

11 pegged rate for such conversion at the time of 

12 issuance. 

13 ‘‘(C) TREATMENT OF INSTRUMENTS DE14 NOMINATED IN OR PEGGED TO ANOTHER NA15 TIONAL OR STATE CURRENCY.—For purposes of 

16 subparagraph (A), the value at which a 

17 stablecoin that is denominated in or pegged to 

18 another national or state currency or a func19 tional monetary equivalent can readily be con20 verted into United States dollars, on demand, 

21 at the time of issuance shall be calculated using 

22 the express or implied exchange rate for such 

23 conversion at the time of issuance. 

24 ‘‘(D) FUNCTIONAL MONETARY EQUIVA25 LENT DEFINED.—For purposes of this Act and 


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1 any Act enacted after the date of enactment of 

2 this subsection, the term ‘functional monetary 

3 equivalent’ means— 

4 ‘‘(i) deposits, as defined under section 

5 3 of the Federal Deposit Insurance Act; 

6 ‘‘(ii) e-money and money transmitter 

7 balances; 

8 ‘‘(iii) other stablecoins; and 

9 ‘‘(iv) any other financial instrument 

10 issued for the purpose of circulating as 

11 money, making payments, or satisfying 

12 debts denominated in United States dollars 

13 or any other national or state currency.’’. 

14 (b) REGULATIONS.—The Federal Deposit Insurance 

15 Act (12 U.S.C. 1811 et seq.) is amended by adding at 

16 the end the following: 

17 ‘‘SEC. 52. STABLECOINS. 

18 ‘‘(a) ISSUING STABLECOINS.— 

19 ‘‘(1) LIMITATION ON WHO MAY ISSUE

20 STABLECOINS.—It shall be unlawful for any person 

21 to issue a stablecoin other than an insured deposi22 tory institution that is a member of the Federal Re23 serve System. 

24 ‘‘(2) LIMITATION ON STABLECOIN-RELATED

25 COMMERCIAL ACTIVITIES.—It shall be unlawful for 


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1 any person to issue a stablecoin or stablecoin-related 

2 product, to provide any stablecoin-related service, or 

3 otherwise engage in any stablecoin-related commer4 cial activity, including activity involving stablecoins 

5 issued by other persons, without obtaining written 

6 approval in advance, and on an ongoing basis, from 

7 the appropriate Federal banking agency, the Cor8 poration, and the Board of Governors of the Federal 

9 Reserve System. 

10 ‘‘(3) NOTICE AND APPROVAL REQUIREMENTS.— 

11 Any person issuing a stablecoin shall— 

12 ‘‘(A) notify the appropriate Federal bank13 ing agency, the Corporation, and the Board of 

14 Governors of the Federal Reserve System of the 

15 person’s intent to issue the stablecoin at least 

16 6 months prior to the date of issuance; 

17 ‘‘(B) obtain written approval from the ap18 propriate Federal banking agency, the Corpora19 tion, and the Board of Governors of the Federal 

20 Reserve System prior to issuing any stablecoin 

21 or stablecoin-related product, providing any 

22 stablecoin-related services, or otherwise engag23 ing in any stablecoin-related commercial activ24 ity, including activity involving stablecoins 

25 issued by other persons; and 


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1 ‘‘(C) provide ongoing analysis to the Board 

2 of Governors of the Federal Reserve System, 

3 the Financial Stability Oversight Council, and 

4 the Office of Finance Research on any potential 

5 systemic impacts or monetary policy implica6 tions of the stablecoin. 

7 ‘‘(4) MASTER ACCOUNT ACCESS.—With respect 

8 to an insured depository institution that is a mem9 ber of the Federal Reserve System and that has ob10 tained written approval described under paragraph 

11 (3)(B)— 

12 ‘‘(A) the Board of Governors of the Fed13 eral Reserve System shall provide the institu14 tion with a master account at the Federal Re15 serve System; and 

16 ‘‘(B) the institution shall be eligible to re17 ceive all benefits and access to services associ18 ated with such account. 

19 ‘‘(b) REQUIREMENT TO MAINTAIN FIXED VALUE.— 

20 Any issuer of a stablecoin shall take all possible actions 

21 to ensure that, at no point over the life of the stablecoin, 

22 the redemption value of the stablecoin does not drop below 

23 the nominal redemption value of the stablecoin. 

24 ‘‘(c) ABILITY TO REDEEM STABLECOINS.— 


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1 ‘‘(1) IN GENERAL.—Any issuer of stablecoins 

2 shall maintain the ability to immediately redeem all 

3 outstanding stablecoins at their nominal redemption 

4 value, upon demand, in United States dollars. 

5 ‘‘(2) REQUIREMENT TO MAINTAIN COLLATERAL

6 FOR UNINSURED STABLECOIN AMOUNTS.— 

7 ‘‘(A) IN GENERAL.—Any issuer of 

8 stablecoins shall deposit reserves with the appli9 cable Federal reserve bank in a segregated ac10 count in an amount equal to the nominal re11 demption value of all outstanding stablecoins 

12 issued by the issuer, and such reserves shall 

13 serve as collateral for such stablecoins. 

14 ‘‘(B) EXCEPTION FOR INSURED DEPOS15 ITS.—Subparagraph (A) shall not apply with 

16 respect to the value of any outstanding 

17 stablecoins that the issuer of the stablecoins 

18 knows are insured deposits. 

19 ‘‘(3) PENALTIES.—If the issuer of a stablecoin 

20 fails to immediately redeem an outstanding 

21 stablecoin, upon demand, in United States dollars 

22 (or if the appropriate Federal banking agency deter23 mines that the issuer does not have the ability to im24 mediately redeem all outstanding stablecoins, upon 

25 demand, in United States dollars) the appropriate 


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1 Federal banking agency shall penalize the issuer, 

2 which may include— 

3 ‘‘(A) the revocation of deposit insurance 

4 provided under this Act; 

5 ‘‘(B) the revocation of the issuer’s mem6 bership in the Federal Reserve System; 

7 ‘‘(C) the revocation of the issuer’s Federal 

8 charter; and 

9 ‘‘(D) such lesser penalty as the agency de10 termines appropriate. 

11 ‘‘(d) PRODUCTS AND SERVICES RELATED TO

12 STABLECOINS.— 

13 ‘‘(1) DISCLOSURES.—Any person offering or 

14 providing a product or service with respect to a 

15 stablecoin, regardless of whether such person is the 

16 issuer of the stablecoin, shall clearly disclosure— 

17 ‘‘(A) whether the person is the original 

18 issuer of the stablecoin; and 

19 ‘‘(B) if the person is the original issuer of 

20 the stablecoin, whether— 

21 ‘‘(i) the stablecoin is being held as an 

22 insured deposit; or 

23 ‘‘(ii) the stablecoin is fully 

24 collateralized by reserves maintained at a 

25 Federal reserve bank. 


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1 ‘‘(2) USE OF THE TERM ‘DOLLAR’.—A person 

2 offering or providing a product or service with re3 spect to a stablecoin may not use the term ‘dollar’ 

4 or ‘dollars’ to refer to stablecoin balances unless 

5 such reference is pre-approved by either the Comp6 troller of the Currency or the Board of Governors of 

7 the Federal Reserve System. 

8 ‘‘(e) PRIORITIZATION UNDER DEPOSIT INSUR9 ANCE.—With respect to a depositor, for purposes of deter10 mining whether a deposit is an insured deposit, the Cor11 poration shall first include deposits that are not 

12 stablecoins. 

13 ‘‘(f) OVERSIGHT BY FEDERAL BANKING AGEN14 CIES.— 

15 ‘‘(1) IN GENERAL.—The appropriate Federal 

16 banking agency shall have general regulatory author17 ity over an insured depository institution’s business 

18 activities related to stablecoins, including all existing 

19 regulatory powers that the agency has with respect 

20 to the institution’s business activities related to 

21 other deposits 

22 ‘‘(2) CAPITAL ADEQUACY RULES.—The Federal 

23 banking agencies shall promulgate rules and stand24 ards regarding the capital adequacy, leverage, liquid25 ity, and permitted activities of stablecoin issuers and 


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1 other persons engaged in stablecoin-related activi2 ties. 

3 ‘‘(3) EFFECT ON OTHER RULES.—To the extent 

4 a person is subject to capital adequacy, liquidity, 

5 and other rules issued under this section, the appro6 priate Federal banking agency may provide excep7 tions or exemptions from similar rules issued pursu8 ant to other provisions of law, if the agency deter9 mines such exceptions or exemptions are appro10 priate, taking into account the activities of such per11 son. 

12 ‘‘(g) RULE OF CONSTRUCTION.—Nothing in this sec13 tion may be construed as removing any jurisdictional or 

14 regulatory authority of any Federal agency.’’. 

15 (c) BANKING ACT OF 1933.—Section 21 of the Bank16 ing Act of 1933 (12 U.S.C. 378) is amended— 

17 (1) in subsection (a)— 

18 (A) in paragraph (1), by inserting after 

19 ‘‘to any extent whatever in the business of’’ the 

20 following: ‘‘issuing stablecoins or’’; and 

21 (B) in paragraph (2), by inserting after 

22 ‘‘officers, agents or employees, in the business 

23 of’’ the following: ‘‘issuing stablecoins or’’; 

24 (2) by redesignating subsection (b) as sub25 section (c); and 


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1 (3) by inserting after subsection (a) the fol2 lowing: 

3 ‘‘(b) For the purposes of subsection (a), the term 

4 ‘stablecoin’ has the meaning given that term under section 

5 3 of the Federal Deposit Insurance Act (12 U.S.C. 

6 1813).’’. 

7 (d) RULEMAKING.—Not later than the end of the 3- 

8 month period beginning on the date of enactment of this 

9 Act, the Board of Governors of the Federal Reserve Sys10 tem, the Comptroller of the Currency, and the Federal De11 posit Insurance Corporation shall issue rules to carry out 

12 this Act and the amendments made by this Act. 

Æ 


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