The proposed bill, HB259, introduces a new Chapter 7B to Title 8 of the Code of Alabama 1975, known as the Financial Innovation and Market Expansion Act, which establishes a regulatory framework for the issuance and sale of payment stablecoins in Alabama. It prohibits any individual or entity from issuing payment stablecoins unless they are classified as a "permitted payment stablecoin issuer," which requires licensing from the Alabama Securities Commission. Starting in 2028, only these permitted issuers will be allowed to offer or sell payment stablecoins. The bill also outlines definitions for key terms, mandates the commission to evaluate licensing applications based on financial stability and compliance with federal regulations, and exempts certain transactions from these regulations.

Additionally, the bill enhances the commission's enforcement authority, allowing it to conduct investigations, summon witnesses, and impose penalties for non-compliance, including civil penalties of up to $100,000 per day for ongoing violations. It includes provisions for the commission to deny applications based on the issuer's competence and practices, as well as a framework for hearings and appeals. Notably, the bill inserts new legal language that emphasizes the confidentiality of information obtained during investigations and prioritizes claims from payment stablecoin holders in insolvency proceedings. The bill is set to take effect on October 1, 2026, and aims to ensure the integrity and regulatory oversight of payment stablecoin operations in Alabama.

Statutes affected:
Introduced: 8-7B-1
Engrossed: 8-7B-1
Enrolled: 8-7B-1