GENIUS Act
Order of claims in an issuer bankruptcy
GENIUS Act section 11 sets the order of claims when a permitted payment stablecoin issuer fails. Holders of that issuer's stablecoins take priority over the issuer and its other claimants with respect to required reserves, ratably among themselves. ReserveBeat publishes no prediction of any issuer's financial condition.
Statutory text, verbatim
- Citation
- GENIUS Act § 11
- Document
- S. 1582 ENROLLED (119th Congress)
- Retrieved
- 2026-07-25
Quoted exactly as it appears in the enrolled bill, including its line breaks and indentation. ReserveBeat does not re-wrap, edit, or abridge statutory text.
SEC. 11. TREATMENT OF PAYMENT STABLECOIN ISSUERS IN INSOLVENCY
PROCEEDINGS.
(a) In General.--Subject to section 507(e) of title 11, United
States Code, as added by subsection (d), in any insolvency proceeding
of a permitted payment stablecoin issuer under Federal or State law,
including any proceeding under that title and any insolvency proceeding
administered by a State payment stablecoin regulator with respect to a
permitted payment stablecoin issuer--
(1) the claim of a person holding payment stablecoins issued by
the permitted payment stablecoin issuer shall have priority, on a
ratable basis with the claims of other persons holding such payment
stablecoins, over the claims of the permitted payment stablecoin
issuer and any other holder of claims against the permitted payment
stablecoin issuer, with respect to required payment stablecoin
reserves;
(2) notwithstanding any other provision of law, including the
definition of ``claim'' under section 101(5) of title 11, United
States Code, any person holding a payment stablecoin issued by the
permitted payment stablecoin issuer shall be deemed to hold a
claim; and
(3) the priority under paragraph (1) shall not apply to claims
other than those arising directly from the holding of payment
stablecoins.
(b) Definitions.--Section 101 of title 11, United States Code, is
amended by adding after paragraph (40B) the following:
``(40C) The terms `payment stablecoin' and `permitted payment
stablecoin issuer' have the meanings given those terms in section 2
of the GENIUS Act.''.
(c) Automatic Stay.--Section 362 of title 11, United States Code,
is amended--
(1) in subsection (a)--
(A) in paragraph (7), by striking ``and'';
(B) in paragraph (8), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(9) the redemption of payment stablecoins issued by the
permitted payment stablecoin issuer, from payment stablecoin
reserves required to be maintained under section 4 of the GENIUS
Act.''; and
(2) in subsection (d)--
(A) in paragraph (3)(B)(ii), by striking ``or'' at the end;
(B) in paragraph (4)(B), by striking the period at the end
and inserting ``; or''; and
(C) by inserting after paragraph (4) the following:
``(5) with respect to the redemption of payment stablecoins
held by a person, if the court finds, subject to the motion and
attestation of the permitted payment stablecoin issuer, which shall
be filed on the petition date or as soon as practicable thereafter,
there are payment stablecoin reserves available for distribution on
a ratable basis to similarly situated payment stablecoin holders,
provided that the court shall use best efforts to enter a final
order to begin distributions under this paragraph not later than 14
days after the date of the required hearing.''.
(d) Priority in Bankruptcy Proceedings.--Section 507 of title 11,
United States Code, is amended--
(1) in subsection (a), in the matter preceding paragraph (1),
by striking ``The following'' and inserting ``Subject to subsection
(e), the following''; and
(2) by adding at the end the following:
``(e) Notwithstanding subsection (a), if a payment stablecoin
holder is not able to redeem all outstanding payment stablecoin claims
from required payment stablecoin reserves maintained by the permitted
payment stablecoin issuer, any such remaining claim arising from a
person's holding of a payment stablecoin issued by the permitted
payment stablecoin issuer shall be a claim against the estate and shall
have first priority over any other claim, including over any expenses
and claims that have priority under that subsection, to the extent
compliance with section 4 of the GENIUS Act would have required
additional reserves to be maintained by the permitted payment
stablecoin issuer for payment stablecoin holders.''.
(e) Payment Stablecoin Reserves.--Section 541(b) of title 11,
United States Code, is amended--
(1) in paragraph (9), in the matter following subparagraph (B),
by striking ``or'' at the end;
(2) in paragraph (10)(C), by striking the period and inserting
``; or''; and
(3) by inserting after paragraph (10) the following:
``(11) required payment stablecoin reserves under section 4 of
the GENIUS Act, provided that notwithstanding the exclusion of such
reserves from the property of the estate, section 362 of this title
shall apply to such reserves.''.
(f) Intervention.--Section 1109 of title 11, United States Code, is
amended by adding at the end the following:
``(c) The Comptroller of the Currency or State payment stablecoin
regulator (as defined in section 2 of the GENIUS Act) shall raise, and
shall appear and be heard on, any issue, including the protection of
customers, in a case under this chapter in which the debtor is a
permitted payment stablecoin issuer.''.
(g) Application of Existing Insolvency Law.--In accordance with
otherwise applicable law, an insolvency proceeding with respect to a
permitted payment stablecoin issuer shall occur as follows:
(1) A depository institution (as defined in section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813)) shall be resolved
by the Federal Deposit Insurance Corporation, National Credit Union
Administration, or State payment stablecoin regulator, as
applicable.
(2) A subsidiary of a depository institution (as defined in
section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) or
a nonbank entity may be considered a debtor under title 11, United
States Code.
(h) Study by Primary Federal Payment Stablecoin Regulators.--
(1) Study required.--The primary Federal payment stablecoin
regulators shall perform a study of the potential insolvency
proceedings of permitted payment stablecoin issuers, including an
examination of--
(A) existing gaps in the bankruptcy laws and rules for
permitted payment stablecoin issuers;
(B) the ability of payment stablecoin holders to be paid
out in full in the event a permitted payment stablecoin issuer
is insolvent; and
(C) the utility of orderly insolvency administration
regimes and whether any additional authorities are needed to
implement such regimes.
(2) Report.--Not later than 3 years after the date of enactment
of this Act, the primary Federal payment stablecoin regulators
shall submit to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of
the House of Representatives a report that contains all findings of
the study under paragraph (1), including any legislative
recommendations.
What ReserveBeat does with this
ReserveBeat makes no statement about whether any issuer is likely to fail, and the coverage board holds no field that would support one. What the board does hold is a dated, hash-chained record of what each issuer reported and what was observable on-chain at that time — the kind of contemporaneous record a claims process works from. The board is a record of disclosures, not an assessment of an issuer's condition.
Terms used in this provision
Definitions live in the learn section. ReserveBeat defines terms in one place and links to it.
This page is a pointer to primary law, not legal advice. ReserveBeat is not a law firm and takes no position on how any provision applies to any issuer. Read the statute.
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Questions
Common questions
Is this the full text of the GENIUS Act?
No. Seven provisions are published here, sliced from the enrolled bill S. 1582 and quoted verbatim. The full Act is at the source link on every provision page.
Does ReserveBeat check whether an issuer meets these requirements?
No. ReserveBeat reconciles what an issuer publishes against what is observable on-chain and prepares evidence for a registered public accounting firm. It takes no position on any issuer's legal status.
Where did this text come from?
It was retrieved once from congress.gov, on the date shown on each page, and committed to this repository as a citable file. Pages render from that file, so the text cannot drift between readings.
Is this legal advice?
No. ReserveBeat is not a law firm. These pages point at primary law and describe what this product measures; they do not interpret the statute or apply it to anyone.