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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Stablecoin Classifica-
tion and Regulation Act of 2020’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) Article I, Section 8, Clause 5 of the United 
States Constitution provides that Congress shall 
have the power ‘‘to coin money, regulate the value 
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thereof, and of foreign coin, and fix the standard of 
weights and measures’’. 
(2) Section 2A of the Federal Reserve Act (12 
U.S.C. 225a) provides that the mandate of the 
Board of Governors of the Federal Reserve System 
is to ‘‘promote effectively the goals of maximum em-
ployment, stable prices, and moderate long-term in-
terest rates’’. 
(3) Section 21(a) of the Banking Act of 1933 
(12 U.S.C. 378(a)) provides in part that: 
‘‘(a) After the expiration of one year after [June 16, 
1933] it shall be unlawful . . . 
‘‘(2) For any person, firm, corporation, associa-
tion, business trust, or other similar organization to 
engage, to any extent whatever with others than his 
or its officers, agents or employees, in the business 
of receiving deposits subject to check or to repay-
ment upon presentation of a pass book, certificate of 
deposit, or other evidence of debt, or upon request 
of the depositor, unless such person, firm, corpora-
tion, association, business trust, or other similar or-
ganization (A) shall be incorporated under, and au-
thorized to engage in such business by, the laws of 
the United States or of any State, Territory, or Dis-
trict, and subjected, by the laws of the United 
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States, or of the State, Territory, or District where-
in located, to examination and regulation, or (B) 
shall be permitted by the United States, any State, 
territory, or district to engage in such business and 
shall be subjected by the laws of the United States, 
or such State, territory, or district to examination 
and regulations or, (C) shall submit to periodic ex-
amination by the banking authority of the State 
Territory, or District where such business is carried 
on and shall make and publish periodic reports of its 
condition, exhibiting in detail its resources and li-
abilities, such examination and reports to be made 
and published at the same times and in the same 
manner and under the same conditions as required 
by the law of such State, Territory, District in the 
case of incorporated banking institutions engaged in 
such business in the same locality.’’. 
(4) Section 3(l) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1813(l)) provides that under 
the Federal Deposit Insurance Act, the term ‘‘de-
posit’’ means: 
‘‘(1) the unpaid balance of money or its equiva-
lent received or held by a bank or savings associa-
tion in the usual course of business and for which 
it has given or is obligated to give credit, either con-
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ditionally or unconditionally, to a commercial, check-
ing, savings, time, or thrift account, or which is evi-
denced by its certificate of deposit, thrift certificate, 
investment certificate, certificate of indebtedness, or 
other similar name, or a check or draft drawn 
against a deposit account and certified by the bank 
or savings association, or a letter of credit or a trav-
eler’s check on which the bank or savings association 
is primarily liable: Provided, That, without limiting 
the generality of the term money or its equivalent, 
any such account or instrument must be regarded as 
evidencing the receipt of the equivalent of money 
when credited or issued in exchange for checks or 
drafts or for a promissory note upon which the per-
son obtaining any such credit or instrument is pri-
marily or secondarily liable, or for a charge against 
a deposit account, or in settlement of checks, drafts, 
or other instruments forwarded to such bank or sav-
ings association for collection, 
‘‘(2) trust funds as defined in this Act received 
or held by such bank or savings association, whether 
held in the trust department or held or deposited in 
any other department of such bank or savings asso-
ciation, 
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‘‘(3) money received or held by a bank or sav-
ings association, or the credit given for money or its 
equivalent received or held by a bank or savings as-
sociation, in the usual course of business for a spe-
cial or specific purpose, regardless of the legal rela-
tionship thereby established, including without being 
limited to, escrow funds, funds held as security for 
an obligation due to the bank or savings association 
or others (including funds held as dealers reserves) 
or for securities loaned by the bank or savings asso-
ciation, funds deposited by a debtor to meet matur-
ing obligations, funds deposited as advance payment 
on subscriptions to United States Government secu-
rities, funds held for distribution or purchase of se-
curities, funds held to meet its acceptances or letters 
of credit, and withheld taxes: Provided, That there 
shall not be included funds which are received by the 
bank or savings association for immediate applica-
tion to the reduction of an indebtedness to the re-
ceiving bank or savings association, or under condi-
tion that the receipt thereof immediately reduces or 
extinguishes such an indebtedness, 
‘‘(4) outstanding draft (including advice or au-
thorization to charge a bank’s or a savings associa-
tion’s balance in another bank or savings associa-
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tion), cashier’s check, money order, or other officer’s 
check issued in the usual course of business for any 
purpose, including without being limited to those 
issued in payment for services, dividends, or pur-
chases, and 
‘‘(5) such other obligations of a bank or savings 
association as the Board of Directors, after consulta-
tion with the Comptroller of the Currency, and the 
Board of Governors of the Federal Reserve System, 
shall find and prescribe by regulation to be deposit 
liabilities by general usage, except that the following 
shall not be a deposit for any of the purposes of this 
Act or be included as part of the total deposits or 
of an insured deposit: 
‘‘(A) any obligation of a depository institu-
tion which is carried on the books and records 
of an office of such bank or savings association 
located outside of any State, unless— 
‘‘(i) such obligation would be a deposit 
if it were carried on the books and records 
of the depository institution, and would be 
payable at, an office located in any State; 
and 
‘‘(ii) the contract evidencing the obli-
gation provides by express terms, and not 
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by implication, for payment at an office of 
the depository institution located in any 
State; 
‘‘(B) any international banking facility de-
posit, including an international banking facility 
time deposit, as such term is from time to time 
defined by the Board of Governors of the Fed-
eral Reserve System in regulation D or any suc-
cessor regulation issued by the Board of Gov-
ernors of the Federal Reserve System; and 
‘‘(C) any liability of an insured depository 
institution that arises under an annuity con-
tract, the income of which is tax deferred under 
section 72 of the Internal Revenue Code of 
1986.’’. 
(5) Section 1(a) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1811(a)) provides that the Fed-
eral Deposit Insurance Corporation was established 
for the purpose of ‘‘insur[ing] . . . the deposits of 
all banks . . . which are entitled to the benefits of 
insurance’’ under the Federal Deposit Insurance 
Act. 
SEC. 3. REGULATION OF STABLECOINS. 
(a) DEFINITIONS.—Section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813) is amended— 
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(1) in subsection (l)— 
(A) in paragraph (4), by striking ‘‘and’’ at 
the end; 
(B) by redesignating paragraph (5) as 
paragraph (6); and 
(C) by inserting after paragraph (4) the 
following: 
‘‘(5) stablecoins issued by such bank or savings 
association; and’’; 
(2) by adding at the end the following: 
‘‘(aa) DEFINITIONS RELATED TO STABLECOINS.— 
‘‘(1) 
STABLECOIN.—The 
term 
‘stablecoin’ 
means any cryptocurrency or other privately-issued 
digital financial instrument that— 
‘‘(A) is directly or indirectly distributed to 
investors, financial institutions, or the general 
public; 
‘‘(B) is— 
‘‘(i) denominated in United States 
dollars or pegged to the United States dol-
lar; or 
‘‘(ii) denominated in or pegged to an-
other national or state currency; and 
‘‘(C) is issued— 
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‘‘(i) with a fixed nominal redemption 
value; 
‘‘(ii) with the intent of establishing a 
reasonable expectation or belief among the 
general public that the instrument will re-
tain a nominal redemption value that is so 
stable as to render the nominal redemption 
value effectively fixed; or 
‘‘(iii) in such a manner that, regard-
less of intent, has the effect of creating a 
reasonable expectation or belief among the 
general public that the instrument will re-
tain a nominal redemption value that is so 
stable as to render the nominal redemption 
value effectively fixed. 
‘‘(2) NOMINAL REDEMPTION VALUE.— 
‘‘(A) IN
GENERAL.—With respect to a 
stablecoin, the term‘ nominal redemption value’ 
means the value at which the stablecoin can 
readily be converted into United States dollars, 
or any other national or state currency, or a 
functional monetary equivalent, on demand, at 
the time of issuance, or otherwise accepted in 
payment or to satisfy debts denominated in 
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United States dollars or any other national or 
state currency. 
‘‘(B) 
TREATMENT
OF
INSTRUMENTS 
PEGGED TO THE UNITED STATES DOLLAR.— 
For purposes of subparagraph (A), the value at 
which a stablecoin that is pegged to the United 
States dollar or a functional monetary equiva-
lent can readily be converted into United States 
dollars, on demand, at the time of issuance 
shall be calculated using the express or implied 
pegged rate for such conversion at the time of 
issuance. 
‘‘(C) TREATMENT
OF
INSTRUMENTS
DE-
NOMINATED IN OR PEGGED TO ANOTHER NA-
TIONAL OR STATE CURRENCY.—For purposes of 
subparagraph (A), the value at which a 
stablecoin that is denominated in or pegged to 
another national or state currency or a func-
tional monetary equivalent can readily be con-
verted into United States dollars, on demand, 
at the time of issuance shall be calculated using 
the express or implied exchange rate for such 
conversion at the time of issuance. 
‘‘(D) FUNCTIONAL
MONETARY
EQUIVA-
LENT DEFINED.—For purposes of this Act and 
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any Act enacted after the date of enactment of 
this subsection, the term ‘functional monetary 
equivalent’ means— 
‘‘(i) deposits, as defined under section 
3 of the Federal Deposit Insurance Act; 
‘‘(ii) e-money and money transmitter 
balances; 
‘‘(iii) other stablecoins; and 
‘‘(iv) any other financial instrument 
issued for the purpose of circulating as 
money, making payments, or satisfying 
debts denominated in United States dollars 
or any other national or state currency.’’. 
(b) REGULATIONS.—The Federal Deposit Insurance 
Act (12 U.S.C. 1811 et seq.) is amended by adding at 
the end the following: 
‘‘SEC. 52. STABLECOINS. 
‘‘(a) ISSUING STABLECOINS.— 
‘‘(1) 
LIMITATION
ON
WHO
MAY
ISSUE 
STABLECOINS.—It shall be unlawful for any person 
to issue a stablecoin other than an insured deposi-
tory institution that is a member of the Federal Re-
serve System. 
‘‘(2) LIMITATION
ON
STABLECOIN-RELATED 
COMMERCIAL ACTIVITIES.—It shall be unlawful for 
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any person to issue a stablecoin or stablecoin-related 
product, to provide any stablecoin-related service, or 
otherwise engage in any stablecoin-related commer-
cial activity, including activity involving stablecoins 
issued by other persons, without obtaining written 
approval in advance, and on an ongoing basis, from 
the appropriate Federal banking agency, the Cor-
poration, and the Board of Governors of the Federal 
Reserve System. 
‘‘(3) NOTICE AND APPROVAL REQUIREMENTS.— 
Any person issuing a stablecoin shall— 
‘‘(A) notify the appropriate Federal bank-
ing agency, the Corporation, and the Board of 
Governors of the Federal Reserve System of the 
person’s intent to issue the stablecoin at least 
6 months prior to the date of issuance; 
‘‘(B) obtain written approval from the ap-
propriate Federal banking agency, the Corpora-
tion, and the Board of Governors of the Federal 
Reserve System prior to issuing any stablecoin 
or stablecoin-related product, providing any 
stablecoin-related services, or otherwise engag-
ing in any stablecoin-related commercial activ-
ity, including activity involving stablecoins 
issued by other persons; and 
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‘‘(C) provide ongoing analysis to the Board 
of Governors of the Federal Reserve System, 
the Financial Stability Oversight Council, and 
the Office of Finance Research on any potential 
systemic impacts or monetary policy implica-
tions of the stablecoin. 
‘‘(4) MASTER ACCOUNT ACCESS.—With respect 
to an insured depository institution that is a mem-
ber of the Federal Reserve System and that has ob-
tained written approval described under paragraph 
(3)(B)— 
‘‘(A) the Board of Governors of the Fed-
eral Reserve System shall provide the institu-
tion with a master account at the Federal Re-
serve System; and 
‘‘(B) the institution shall be eligible to re-
ceive all benefits and access to services associ-
ated with such account. 
‘‘(b) REQUIREMENT TO MAINTAIN FIXED VALUE.— 
Any issuer of a stablecoin shall take all possible actions 
to ensure that, at no point over the life of the stablecoin, 
the redemption value of the stablecoin does not drop below 
the nominal redemption value of the stablecoin. 
‘‘(c) ABILITY TO REDEEM STABLECOINS.— 
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‘‘(1) IN GENERAL.—Any issuer of stablecoins 
shall maintain the ability to immediately redeem all 
outstanding stablecoins at their nominal redemption 
value, upon demand, in United States dollars. 
‘‘(2) REQUIREMENT TO MAINTAIN COLLATERAL 
FOR UNINSURED STABLECOIN AMOUNTS.— 
‘‘(A) 
IN
GENERAL.—Any 
issuer 
of 
stablecoins shall deposit reserves with the appli-
cable Federal reserve bank in a segregated ac-
count in an amount equal to the nominal re-
demption value of all outstanding stablecoins 
issued by the issuer, and such reserves shall 
serve as collateral for such stablecoins. 
‘‘(B) EXCEPTION
FOR
INSURED
DEPOS-
ITS.—Subparagraph (A) shall not apply with 
respect to the value of any outstanding 
stablecoins that the issuer of the stablecoins 
knows are insured deposits. 
‘‘(3) PENALTIES.—If the issuer of a stablecoin 
fails 
to 
immediately 
redeem 
an 
outstanding 
stablecoin, upon demand, in United States dollars 
(or if the appropriate Federal banking agency deter-
mines that the issuer does not have the ability to im-
mediately redeem all outstanding stablecoins, upon 
demand, in United States dollars) the appropriate 
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Federal banking agency shall penalize the issuer, 
which may include— 
‘‘(A) the revocation of deposit insurance 
provided under this Act; 
‘‘(B) the revocation of the issuer’s mem-
bership in the Federal Reserve System; 
‘‘(C) the revocation of the issuer’s Federal 
charter; and 
‘‘(D) such lesser penalty as the agency de-
termines appropriate. 
‘‘(d) PRODUCTS
AND
SERVICES
RELATED
TO 
STABLECOINS.— 
‘‘(1) DISCLOSURES.—Any person offering or 
providing a product or service with respect to a 
stablecoin, regardless of whether such person is the 
issuer of the stablecoin, shall clearly disclosure— 
‘‘(A) whether the person is the original 
issuer of the stablecoin; and 
‘‘(B) if the person is the original issuer of 
the stablecoin, whether— 
‘‘(i) the stablecoin is being held as an 
insured deposit; or 
‘‘(ii) 
the 
stablecoin 
is 
fully 
collateralized by reserves maintained at a 
Federal reserve bank. 
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‘‘(2) USE OF THE TERM ‘DOLLAR’.—A person 
offering or providing a product or service with re-
spect to a stablecoin may not use the term ‘dollar’ 
or ‘dollars’ to refer to stablecoin balances unless 
such reference is pre-approved by either the Comp-
troller of the Currency or the Board of Governors of 
the Federal Reserve System. 
‘‘(e) PRIORITIZATION
UNDER
DEPOSIT
INSUR-
ANCE.—With respect to a depositor, for purposes of deter-
mining whether a deposit is an insured deposit, the Cor-
poration shall first include deposits that are not 
stablecoins. 
‘‘(f) OVERSIGHT
BY
FEDERAL
BANKING
AGEN-
CIES.— 
‘‘(1) IN
GENERAL.—The appropriate Federal 
banking agency shall have general regulatory author-
ity over an insured depository institution’s business 
activities related to stablecoins, including all existing 
regulatory powers that the agency has with respect 
to the institution’s business activities related to 
other deposits 
‘‘(2) CAPITAL ADEQUACY RULES.—The Federal 
banking agencies shall promulgate rules and stand-
ards regarding the capital adequacy, leverage, liquid-
ity, and permitted activities of stablecoin issuers and 
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other persons engaged in stablecoin-related activi-
ties. 
‘‘(3) EFFECT ON OTHER RULES.—To the extent 
a person is subject to capital adequacy, liquidity, 
and other rules issued under this section, the appro-
priate Federal banking agency may provide excep-
tions or exemptions from similar rules issued pursu-
ant to other provisions of law, if the agency deter-
mines such exceptions or exemptions are appro-
priate, taking into account the activities of such per-
son. 
‘‘(g) RULE OF CONSTRUCTION.—Nothing in this sec-
tion may be construed as removing any jurisdictional or 
regulatory authority of any Federal agency.’’. 
(c) BANKING ACT OF 1933.—Section 21 of the Bank-
ing Act of 1933 (12 U.S.C. 378) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1), by inserting after 
‘‘to any extent whatever in the business of’’ the 
following: ‘‘issuing stablecoins or’’; and 
(B) in paragraph (2), by inserting after 
‘‘officers, agents or employees, in the business 
of’’ the following: ‘‘issuing stablecoins or’’; 
(2) by redesignating subsection (b) as sub-
section (c); and 
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(3) by inserting after subsection (a) the fol-
lowing: 
‘‘(b) For the purposes of subsection (a), the term 
‘stablecoin’ has the meaning given that term under section 
3 of the Federal Deposit Insurance Act (12 U.S.C. 
1813).’’. 
(d) RULEMAKING.—Not later than the end of the 3- 
month period beginning on the date of enactment of this 
Act, the Board of Governors of the Federal Reserve Sys-
tem, the Comptroller of the Currency, and the Federal De-
posit Insurance Corporation shall issue rules to carry out 
this Act and the amendments made by this Act. 
Æ 
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