House Bill 259 Alabama 2026 Session

Summary

Primary Sponsor

Mike ShawRepresentative

Republican

Session

2026 Regular Session

Title

Stablecoin; license required for issuance or sale of stablecoins, Alabama Securities Commission to enforce and authorize, penalties provided

Summary

HB259 creates a state licensing system for issuing and selling payment stablecoins in Alabama, with enforcement by the Alabama Securities Commission and penalties for violations.

What This Bill Does

The bill adds Chapter 7B, the Financial Innovation and Market Expansion Act, to regulate payment stablecoins at the state level and defines key terms. Beginning July 18, 2028, no digital asset service provider may offer or sell a payment stablecoin unless it is issued by an Alabama permitted issuer; issuance in Alabama is restricted to Alabama qualified payment stablecoin issuers. The Alabama Securities Commission will license issuers, regulate and supervise them, impose penalties for violations, require anti-money-laundering programs, and produce an annual report; the act also aligns with the GENIUS Act and federal rules. The act becomes effective October 1, 2026 and includes provisions on insolvency priority for holders of payment stablecoins.

Who It Affects

• Issuers of payment stablecoins in Alabama must become licensed as Alabama qualified payment stablecoin issuers and comply with ongoing supervision and requirements.
• Digital asset service providers (exchanges, custodians, etc.) will be restricted from offering or selling payment stablecoins in Alabama after 2028 unless the coin is issued by a permitted issuer.
• Alabama residents and users of payment stablecoins will be affected by the regulated and potentially safer market, plus any changes in availability of stablecoins.
• The Alabama Securities Commission gains authority to license, regulate, examine, enforce, collect fees, and publish reports, increasing state-level oversight.
• Holders of payment stablecoins have priority claims on reserves if the issuer becomes insolvent, affecting insolvency proceedings.

Key Provisions

• Establishes the Financial Innovation and Market Expansion Act (Chapter 7B) and defines Alabama Qualified Payment Stablecoin Issuer, Authorized Payment Stablecoin, and Permitted Issuer.
• Prohibits issuing or offering payment stablecoins in Alabama unless issued by a Permitted Issuer; after July 18, 2028, prohibits offerings by non-permitted issuers; includes exemptions for certain direct transfers, same-parent cross-border transactions, and wallet custody.
• Creates licensing, regulation, examination, and supervision framework; sets a process for licensing through the Alabama Securities Commission, including criteria, a 120-day decision window, and a 30-day completeness notice.
• Requires annual AML/Sanctions compliance certifications by issuers; identifies applicable federal laws and ensures minimum federal requirements; mandates annual reports to the Legislature with data on authorized stablecoins and risks.
• Imposes penalties for violations, including civil penalties up to $100,000 per day plus costs, and criminal penalties for fraud or unlicensed activity; grants enforcement powers such as suspending/revoking licenses, issuing cease-and-desist orders, and pursuing court actions; permits consent orders.
• Provides insolvency provisions where holders of payment stablecoins have priority on reserves and are deemed to have a claim in insolvency proceedings.
• Allows the Commission to assess fees and administrative costs, fund enforcement, and publish lists of authorized stablecoins; information handled under confidentiality rules with exceptions for public lists and aggregated data.
• Effective date: October 1, 2026.

AI-generated summary using openai/gpt-5-nano-2025-08-07 on Mar 11, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Consumer Protection