Indiana would require stablecoin issuer licenses and bar holder rewards

Indiana would require a license to issue payment stablecoins and limit which stablecoins digital asset service providers could offer or sell. The rules would cover issuance in Indiana and offers or sales there by digital asset service providers. The chapter would not apply to federally permitted issuers where federal law overrides its rules. The sales rule would exclude lawful transfers between individuals acting for themselves without an intermediary. It would also exclude transfers between a person's own United States and foreign accounts run by the same entity, and transactions through wallets that let individuals control their digital assets. If enacted, the licensing chapter would take effect July 1, 2026. The sales restriction would begin July 1, 2028.

Covered issuers and people acting for them would be barred from rewarding payment stablecoin holders. The ban would cover issuers in the federally defined permitted and foreign issuer categories, and anyone acting on their behalf. The benefit would have to be connected to holding, using, or keeping the payment stablecoin. The ban would cover interest, returns paid in cash or tokens, and any other economic benefit. If enacted, the rewards ban would take effect July 1, 2026.

Indiana's Department of Financial Institutions would supervise licensed issuers and could penalize violations. Licensed issuers would have to provide records reasonably needed for examinations. Enforcement would also cover people operating without a required license. Issuers would generally pay examination costs and fees for state oversight. They would certify programs designed to prevent money laundering and terrorist financing and follow economic sanctions rules. The department could suspend or revoke licenses for violations, fraud, unsafe practices, or other listed grounds. After notice and a chance to be heard, a person could face a civil penalty of up to $10,000 per violation, plus investigation and prosecution costs. Knowingly operating without a required license would be a misdemeanor if the activity brings in up to $750 within 30 days, or a felony if it brings in more. Intentionally falsifying required records would be a misdemeanor. If enacted, oversight would take effect July 1, 2026. Issuers would file compliance certifications within 180 days of license approval and within 180 days after each anniversary.

Stablecoin holders would have first claim on a licensed issuer's required reserves in proceedings to settle its unpaid debts. This rule would cover people holding payment stablecoins issued by an Indiana-licensed issuer. The priority would apply only to claims arising directly from holding payment stablecoins. Holders would share the required reserves in proportion to their claims. This priority would not extend to all of the issuer's assets. If enacted, this repayment rule would take effect July 1, 2026.

The Department of Financial Institutions would review license applications for financial soundness and allow denied applicants to challenge the decision. These rules would cover applicants seeking an Indiana payment stablecoin issuer license. Licensed issuers would not need another Indiana license or charter to act in that role. Review would consider financial resources, company leaders' records and fitness, and the issuer's policy for exchanging stablecoins back for money. A substantially complete application could be denied only if the planned operations would be financially unsound. Using an open, public, or decentralized network would not itself justify denial. An application would count as approved if the department missed the 120-day decision deadline. If enacted, these rules would start July 1, 2026. Completeness notices and denial reasons would each be due within 30 days of their respective triggers. Applicants would have 30 days after receiving reasons to request a hearing, held within 30 days of the request, with a final decision within 60 days afterward.