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, payment, authorize use of payment stablecoin by governmental entities for contracting, Alabama Securities Commission to enforce and authorize, penalties provided

Summary

HB259 would require payment stablecoins to be licensed in Alabama, limit issuance to state-approved issuers, authorize state regulation and enforcement, and let government use approved stablecoins for payments with vendor disclosures.

What This Bill Does

It creates a new chapter (Chapter 7B) to regulate payment stablecoins in Alabama and defines key terms. Issuance or sale of a payment stablecoin would be prohibited unless the issuer is licensed as an Alabama-qualified payment stablecoin issuer, with licensing handled by the Alabama Securities Commission. Beginning July 18, 2028, no payment stablecoin may be offered or sold in Alabama unless issued by a permitted issuer. The bill also allows government entities to use authorized stablecoins to pay vendors or contractors, requires disclosures to vendors before contracts, and imposes civil and criminal penalties for violations, along with strict backing, reserve, and compliance requirements for issuers.

Who It Affects

• Stablecoin issuers and digital asset service providers operating in Alabama would need to obtain an Alabama-qualified payment stablecoin issuer license, meet financial and compliance standards, and risk license suspension or revocation for violations.
• State and local governmental entities and their vendors/contractors would participate in payments using approved stablecoins, must receive disclosures before contracts, and could choose to accept payments in such coins; violations could incur penalties.

Key Provisions

• Establishes the Financial Innovation and Market Expansion Act (Chapter 7B) to regulate payment stablecoins in Alabama and defines terms like Alabama qualified payment stablecoin issuer, authorized payment stablecoin, and permitted issuer.
• Prohibits issuing or selling a payment stablecoin in Alabama unless licensed; bans by non-permitted issuers beginning July 18, 2028.
• Empowers the Alabama Securities Commission to license AQPSIs, enforce the act, and adopt rules (and to implement federal GENIUS Act regulations).
• Allows governmental entities to recognize and use authorized stablecoins to pay vendors/contractors; vendors may opt to receive payment in stablecoins; such payments can satisfy monetary obligations when accepted.
• Requires authorized stablecoins to be issued in the United States by permitted issuers, have US citizen founders, be fully backed 1:1 by USD or short-term US Treasuries, keep reserves in US banks or custodians, be redeemable on demand at par, undergo quarterly attestations, publish monthly reserve reports, and operate in compliance with the GENIUS Act.
• The commission must publish a list of authorized stablecoins, conduct an annual review, and may suspend or revoke recognition if standards are not met.
• Before contracts using stablecoins are executed, governmental entities must disclose redemption rights, backing, audit requirements, custody risks, and other related information to vendors.
• Enforcement includes civil penalties up to $100,000 per day, administrative charges, and criminal penalties (Class B/C/D felonies) for various violations; examination and enforcement are vested in the Commission.
• Confidentiality provisions protect examination materials, with limited disclosures allowed; however, lists of licensed issuers and aggregated data may be disclosed.
• In insolvency scenarios, holders of payment stablecoins have priority claims to reserves, with specific rules regarding creditor treatment.

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

Subjects

Consumer Protection