II 

117TH CONGRESS 

2D SESSION S. 4356 

To provide for responsible financial innovation and to bring digital assets 

within the regulatory perimeter. 

IN THE SENATE OF THE UNITED STATES 

JUNE 7, 2022 

Ms. LUMMIS (for herself and Mrs. GILLIBRAND) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To provide for responsible financial innovation and to bring 

digital assets within the regulatory perimeter. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Lummis-Gillibrand Responsible Financial Innovation 

6 Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—DEFINITIONS 


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Sec. 101. Definitions. 

TITLE II—RESPONSIBLE TAXATION OF DIGITAL ASSETS 

Sec. 201. Gain from disposition of digital assets. 

Sec. 202. Information reporting requirements imposed on brokers with respect 

to digital assets. 

Sec. 203. Sources of income. 

Sec. 204. Decentralized autonomous organizations. 

Sec. 205. Tax treatment of digital asset lending agreements and related matters. 

Sec. 206. Implementing effective IRS guidance. 

Sec. 207. Analysis of retirement investing in digital assets. 

Sec. 208. Digital asset mining and staking. 

Sec. 209. Conforming amendments. 

TITLE III—RESPONSIBLE SECURITIES INNOVATION 

Sec. 301. Securities offerings involving certain intangible assets. 

Sec. 302. Termination of specified periodic disclosure requirements. 

Sec. 303. Guidance relating to satisfactory control location. 

Sec. 304. Custody and customer protection rules. 

TITLE IV—RESPONSIBLE COMMODITIES INNOVATION 

Sec. 401. Definitions. 

Sec. 402. Reporting and recordkeeping. 

Sec. 403. CFTC jurisdiction over digital asset transactions. 

Sec. 404. Registration of digital asset exchanges. 

Sec. 405. Violations. 

Sec. 406. Market reports. 

Sec. 407. Bankruptcy treatment of digital assets. 

Sec. 408. Identified banking products. 

Sec. 409. Financial institutions definition. 

Sec. 410. Offsetting the costs of digital asset regulation. 

TITLE V—RESPONSIBLE CONSUMER PROTECTION 

Sec. 501. Responsible consumer protection. 

Sec. 502. Source code version of digital assets. 

Sec. 503. Settlement finality. 

Sec. 504. Notice to customers; enforcement. 

Sec. 505. Right to individual management of digital assets. 

Sec. 506. Technical and conforming amendments. 

TITLE VI—RESPONSIBLE PAYMENTS INNOVATION 

Sec. 601. Issuance of payment stablecoins. 

Sec. 602. Sanctions compliance responsibilities of payment stablecoin issuers. 

Sec. 603. Use of the official digital currency of the People’s Republic of China 

on Government devices. 

Sec. 604. Certificate of authority to commence banking. 

Sec. 605. Holding company supervision of covered depository institutions. 

Sec. 606. Implementation rules to preserve adequate competition in payment 

stablecoins. 

Sec. 607. Financial Crimes Enforcement Network Innovation Laboratory. 

TITLE VII—RESPONSIBLE BANKING INNOVATION 


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Sec. 701. Study on use of distributed ledger technology for reduction of risk in 

depository institutions. 

Sec. 702. Eligibility for Federal Reserve services to depository institutions. 

Sec. 703. Routing transit number issuance. 

Sec. 704. Clarifying application review times with respect to the Federal banking agencies. 

Sec. 705. Examination standards for digital asset activities. 

Sec. 706. Asset custody for depository institutions and certain other entities. 

Sec. 707. Reputation risk; requirements for account termination requests and 

orders. 

Sec. 708. Conforming amendments. 

TITLE VIII—RESPONSIBLE INTERAGENCY COORDINATION 

Sec. 801. Timeline for interpretive guidance issued by Federal financial agencies. 

Sec. 802. Interstate sandbox activities. 

Sec. 803. State money transmission coordination relating to digital assets. 

Sec. 804. Information sharing among Federal and State financial regulators. 

Sec. 805. Analysis of decentralized finance markets and technologies. 

Sec. 806. Analysis of energy consumption in digital asset markets. 

Sec. 807. Analysis of self-regulation and registered digital asset associations. 

Sec. 808. Cybersecurity standards for digital asset intermediaries. 

Sec. 809. Advisory Committee on Financial Innovation. 

1 SEC. 2. DEFINITIONS. 

2 In this Act: 

3 (1) COMMODITY.—The term ‘‘commodity’’ has 

4 the meaning given the term in section 1a of the 

5 Commodity Exchange Act (7 U.S.C. 1a). 

6 (2) DIGITAL ASSET; DIGITAL ASSET INTER7 MEDIARY; DISTRIBUTED LEDGER TECHNOLOGY; PAY8 MENT STABLECOIN; SMART CONTRACT; VIRTUAL

9 CURRENCY.—The terms ‘‘digital asset’’, ‘‘digital 

10 asset intermediary’’, ‘‘distributed ledger technology’’, 

11 ‘‘payment stablecoin’’, ‘‘smart contract’’, and ‘‘vir12 tual currency’’ have the meanings given the terms in 

13 section 9801 of title 31, United States Code, as 

14 added by section 101 of this Act. 


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1 (3) SECURITY.—Except as otherwise expressly 

2 provided, the term ‘‘security’’ has the meaning given 

3 the term in section 3(a) of the Securities Exchange 

4 Act of 1934 (15 U.S.C. 78c(a)). 

5 TITLE I—DEFINITIONS 

6 SEC. 101. DEFINITIONS. 

7 (a) IN GENERAL.—Subtitle VI of title 31, United 

8 States Code, is amended by adding after chapter 97 the 

9 following: 

10 ‘‘CHAPTER 98—DIGITAL ASSETS 

‘‘Sec. 

‘‘9801. Definitions. 

11 ‘‘§ 9801. Definitions 

12 ‘‘In this chapter: 

13 ‘‘(1) DEPOSITORY INSTITUTION.—The term ‘de14 pository institution’ has the meaning given the term 

15 in section 19(b)(1) of the Federal Reserve Act (12 

16 U.S.C. 461(b)(1)). 

17 ‘‘(2) DIGITAL ASSET.—The term ‘digital 

18 asset’— 

19 ‘‘(A) means a natively electronic asset 

20 that— 

21 ‘‘(i) confers economic, proprietary, or 

22 access rights or powers; and 


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1 ‘‘(ii) is recorded using cryptographi2 cally secured distributed ledger technology, 

3 or any similar analogue; and 

4 ‘‘(B) includes— 

5 ‘‘(i) virtual currency and ancillary as6 sets in accordance with section 2(c)(2)(F) 

7 of the Commodity Exchange Act; 

8 ‘‘(ii) payment stablecoins in accord9 ance with section 403 of the Commodity 

10 Futures Modernization Act of 2000 (7 

11 U.S.C. 27a); and 

12 ‘‘(iii) any other security or commodity 

13 that meets the requirements of subpara14 graph (A). 

15 ‘‘(3) DIGITAL ASSET INTERMEDIARY.—The 

16 term ‘digital asset intermediary’— 

17 ‘‘(A) means— 

18 ‘‘(i) a person who holds a license, reg19 istration, or other similar authorization, as 

20 specified by this chapter, the Commodity 

21 Exchange Act (7 U.S.C. 1 et seq.), the Se22 curities Act of 1933 (15 U.S.C. 77a et 

23 seq.), the Corporation of Foreign Bond24 holders Act, 1933 (15 U.S.C. 77bb et 

25 seq.), the Trust Indenture Act of 1939 (15 


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1 U.S.C. 77aaa et seq.), the Securities Ex2 change Act of 1934 (15 U.S.C. 78a et 

3 seq.), the Securities Investor Protection 

4 Act of 1970 (15 U.S.C. 78aaa et seq.), the 

5 Investment Company Act of 1940 (15 

6 U.S.C. 80a–1 et seq.), the Investment Ad7 visers Act of 1940 (15 U.S.C. 80b–1), and 

8 the Omnibus Small Business Capital For9 mation Act of 1980 (15 U.S.C. 80c), that 

10 may conduct market activities relating in 

11 digital assets; or 

12 ‘‘(ii) a person who is required by law 

13 to hold a license, registration, or other 

14 similar authorization described in clause 

15 (i); 

16 ‘‘(B) includes— 

17 ‘‘(i) a person who holds a license, reg18 istration, or other similar authorization 

19 under State or Federal law that issues a 

20 payment stablecoin; and 

21 ‘‘(ii) a person who is required by law 

22 to hold a license, registration, or other 

23 similar authorization described in clause 

24 (i); and 


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1 ‘‘(C) does not include a depository institu2 tion. 

3 ‘‘(4) DISTRIBUTED LEDGER TECHNOLOGY.— 

4 The term ‘distributed ledger technology’ means tech5 nology that enables the operation and use of a ledger 

6 that— 

7 ‘‘(A) is shared across a set of distributed 

8 nodes that participate in a network and store a 

9 complete or partial replica of the ledger; 

10 ‘‘(B) is synchronized between the nodes; 

11 ‘‘(C) has data appended to the ledger by 

12 following the specified consensus mechanism of 

13 the ledger; 

14 ‘‘(D) may be accessible to anyone or re15 stricted to a subset of participants; and 

16 ‘‘(E) may require participants to have au17 thorization to perform certain actions or require 

18 no authorization. 

19 ‘‘(5) PAYMENT STABLECOIN.—The term ‘pay20 ment stablecoin’ means a digital asset that is— 

21 ‘‘(A) redeemable, on demand, on a 1-to-1 

22 basis for instruments denominated in United 

23 States dollars; 


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1 ‘‘(B) defined as legal tender under section 

2 5103 or under the laws of a foreign country 

3 (excluding digital assets); 

4 ‘‘(C) issued by a business entity; 

5 ‘‘(D) accompanied by a statement from the 

6 issuer that the asset is redeemable, as specified 

7 in subparagraph (A), from the issuer or another 

8 identified person; 

9 ‘‘(E) backed by 1 or more financial assets 

10 (excluding other digital assets), consistent with 

11 subparagraph (A); and 

12 ‘‘(F) intended to be used as a medium of 

13 exchange. 

14 ‘‘(6) PERSON WHO PROVIDES DIGITAL ASSET

15 SERVICES.—The term ‘person who provides digital 

16 asset services’ means— 

17 ‘‘(A) a digital asset intermediary; 

18 ‘‘(B) a financial institution, as defined in 

19 section 1a of the Commodity Exchange Act (7 

20 U.S.C. 1a); 

21 ‘‘(C) any other person conducting digital 

22 asset activities pursuant to a Federal or State 

23 charter, license, registration, or other similar 

24 authorization; and 


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1 ‘‘(D) any person who is required by law to 

2 hold a license, registration, or other similar au3 thorization described in subparagraph (C). 

4 ‘‘(7) SECURITY.—The term ‘security’ has the 

5 meaning given the term in section 3(a) of the Secu6 rities Exchange Act of 1934 (15 U.S.C. 78c(a)). 

7 ‘‘(8) SMART CONTRACT.—The term ‘smart con8 tract’— 

9 ‘‘(A) means— 

10 ‘‘(i) computer code deployed to a dis11 tributed ledger technology network that 

12 executes an instruction based on the occur13 rence or nonoccurrence of specified condi14 tions; or 

15 ‘‘(ii) any similar analogue; and 

16 ‘‘(B) includes taking possession or control 

17 of a digital asset and transferring the asset or 

18 issuing executable instructions for these actions. 

19 ‘‘(9) SOURCE CODE VERSION.—The term 

20 ‘source code version’— 

21 ‘‘(A) means the source code version com22 prising a digital asset; and 

23 ‘‘(B) does not include software used to 

24 manage or facilitate transactions in a digital 

25 asset. 


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1 ‘‘(10) VIRTUAL CURRENCY.—The term ‘virtual 

2 currency’— 

3 ‘‘(A) means a digital asset that— 

4 ‘‘(i) is used primarily as a medium of 

5 exchange, unit of account, store of value, 

6 or any combination of such functions; 

7 ‘‘(ii) is not legal tender, as described 

8 in section 5103; and 

9 ‘‘(iii) does not derive value from or is 

10 backed by an underlying financial asset 

11 (except other digital assets); and 

12 ‘‘(B) includes a digital asset, consistent 

13 with subparagraph (A) that is accompanied by 

14 a statement from the issuer that a denominated 

15 or pegged value will be maintained and be avail16 able upon redemption from the issuer or other 

17 identified person, based solely on a smart con18 tract.’’. 

19 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

20 The table of contents for subtitle VI of title 31, United 

21 States Code, is amended by adding at the end the fol22 lowing: 

‘‘98. Digital assets ............................................................................. 9801’’. 


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1 TITLE II—RESPONSIBLE 

2 TAXATION OF DIGITAL ASSETS 

3 SEC. 201. GAIN FROM DISPOSITION OF DIGITAL ASSETS. 

4 (a) IN GENERAL.—Part III of subchapter B of chap5 ter 1 of the Internal Revenue Code of 1986 is amended 

6 by inserting after section 139I the following new section: 

7 ‘‘SEC. 139J. GAIN OR LOSS FROM SALE OR EXCHANGE OF 

8 VIRTUAL CURRENCY. 

9 ‘‘(a) IN GENERAL.—Gross income shall not include 

10 gain or loss from the sale or exchange of virtual currency 

11 in a personal transaction (as defined in section 988(e)(3)) 

12 for goods and services. 

13 ‘‘(b) LIMITATION.— 

14 ‘‘(1) IN GENERAL.—The amount of gain or loss 

15 excluded from gross income under subsection (a) 

16 with respect to a sale or exchange shall not exceed 

17 $200. 

18 ‘‘(2) AGGREGATION RULE.—For purposes of 

19 this subsection, all sales or exchanges which are part 

20 of the same transaction (or a series of related trans21 actions) shall be treated as one sale or exchange. 

22 ‘‘(c) OTHER SALES OR EXCHANGES.—Subsection (a) 

23 shall not apply to sales or exchanges in which virtual cur24 rency is sold or exchanged for cash, cash equivalents, digVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 ital assets (as defined in section 9801 of title 31, United 

2 States Code), or other securities or commodities. 

3 ‘‘(d) VIRTUAL CURRENCY.—For purposes of this sec4 tion, the term ‘virtual currency’ has the meaning given 

5 such term in section 9801 of title 31, United States Code. 

6 ‘‘(e) INFLATION ADJUSTMENT.—In the case of any 

7 taxable year beginning in a calendar year after 2023, the 

8 dollar amount in subsection (b) shall be increased by an 

9 amount equal to— 

10 ‘‘(1) such dollar amount, multiplied by 

11 ‘‘(2) the cost-of-living adjustment determined 

12 under section 1(f)(3) for the calendar year in which 

13 the taxable year begins, determined by substituting 

14 ‘calendar year 2022’ for ‘calendar year 2016’ in sub15 paragraph (A)(ii) thereof. 

16 Any increase determined under the preceding sentence 

17 shall be rounded to the nearest multiple of $50.’’. 

18 (b) CLERICAL AMENDMENT.—The table of sections 

19 for part III of subchapter B of chapter 1 of the Internal 

20 Revenue Code of 1986 is amended by inserting after the 

21 item relating to section 139I the following new item: 

‘‘Sec. 139J. Gain or loss from sale or exchange of virtual currency.’’. 

22 (c) REPORTING OF GAINS OR LOSSES.—The Sec23 retary shall issue regulations providing for information re24 turns on virtual currency transactions for which gain or 

25 loss is recognized. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to transactions entered into after 

3 December 31, 2022. 

4 SEC. 202. INFORMATION REPORTING REQUIREMENTS IM5 POSED ON BROKERS WITH RESPECT TO DIG6 ITAL ASSETS. 

7 (a) CLARIFICATION OF DEFINITION OF BROKER.— 

8 Section 6045(c)(1)(D) of the Internal Revenue Code of 

9 1986 is amended to read as follows: 

10 ‘‘(D) any person who (for consideration) 

11 stands ready in the ordinary course of a trade 

12 or business to effect sales of digital assets at 

13 the direction of their customers.’’. 

14 (b) REPORTING OF DIGITAL ASSETS.— 

15 (1) BROKERS.— 

16 (A) DEFINITION OF DIGITAL ASSET.—Sec17 tion 6045(g)(3)(D) of the Internal Revenue 

18 Code of 1986 is amended to read as follows: 

19 ‘‘(D) DIGITAL ASSET.—The term ‘digital 

20 asset’ has the meaning given such term in sec21 tion 9801 of title 31, United States Code.’’. 

22 (B) APPLICABLE DATE.—Section 

23 6045(g)(3)(C)(iii) of such Code is amended to 

24 read as follows: 


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1 ‘‘(iii) January 1, 2025, in the case of 

2 any specified security which is a digital 

3 asset, and’’. 

4 (2) FURNISHING OF INFORMATION.—Section 

5 6045A(d) of such Code is amended to read as fol6 lows: 

7 ‘‘(d) RETURN REQUIREMENT FOR CERTAIN TRANS8 FERS OF DIGITAL ASSETS NOT OTHERWISE SUBJECT TO

9 REPORTING.—Any broker, with respect to any transfer 

10 (which is not part of a sale or exchange executed by such 

11 broker) during a calendar year of a covered security which 

12 is a digital asset from an account wholly controlled and 

13 maintained by such broker to an account which is not 

14 maintained by, or an address not associated with, a person 

15 that such broker knows or has reason to know is also a 

16 broker, shall make a return for such calendar year, in such 

17 form as determined by the Secretary, showing the infor18 mation otherwise required to be furnished with respect to 

19 transfers subject to subsection (a). Information reported 

20 by brokers under this section shall be limited to customer 

21 information that is voluntarily provided by the customer 

22 and held by the broker for a legitimate business purpose.’’. 

23 (c) EFFECTIVE DATES.—The amendments made by 

24 this section shall apply to returns required to be filed and 


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1 statements required to be furnished after December 31, 

2 2025. 

3 SEC. 203. SOURCES OF INCOME. 

4 (a) IN GENERAL.—Paragraph (2) of section 864(b) 

5 of the Internal Revenue Code of 1986 is amended by re6 designating subparagraph (C) as subparagraph (D) and 

7 by inserting after subparagraph (B) the following new 

8 subparagraph: 

9 ‘‘(C) DIGITAL ASSETS.— 

10 ‘‘(i) IN GENERAL.—Trading in digital 

11 assets through a resident broker, commis12 sion agent, custodian, digital asset ex13 change, or other independent agent. 

14 ‘‘(ii) TRADING FOR TAXPAYER’S OWN

15 ACCOUNT.—Trading in digital assets for 

16 the taxpayer’s own account, whether by the 

17 taxpayer or the taxpayer’s employees or 

18 through a resident broker, commission 

19 agent, custodian, digital asset exchange, or 

20 other agent, and whether or not any such 

21 employee or agent has discretionary au22 thority to make decisions in effecting the 

23 transactions. This clause shall not apply in 

24 the case of a dealer in digital assets. 


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1 ‘‘(iii) DEFINITIONS.—For purposes of 

2 this subparagraph— 

3 ‘‘(I) DIGITAL ASSET EX4 CHANGE.—The term ‘digital asset ex5 change’ means a centralized or decen6 tralized platform which facilitates the 

7 transfer of digital assets. 

8 ‘‘(II) DIGITAL ASSET.—The term 

9 ‘digital asset’ has the meaning given 

10 such term in section 9801 of title 31, 

11 United States Code. 

12 ‘‘(iv) LIMITATION.—This subpara13 graph shall apply only if the digital assets 

14 are of a kind customarily dealt in on a dig15 ital asset exchange and if the transaction 

16 is of a kind customarily consummated at 

17 such exchange.’’. 

18 (b) CONFORMING AMENDMENT.—Subparagraph (D) 

19 of section 864(b)(2) of the Internal Revenue Code of 

20 1986, as redesignated by subsection (a), is amended by 

21 striking ‘‘(A)(i) and (B)(i)’’ and inserting ‘‘(A)(i), (B)(i), 

22 and (C)(i)’’. 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to sales and exchanges after De25 cember 31, 2022. 


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1 SEC. 204. DECENTRALIZED AUTONOMOUS ORGANIZATIONS. 

2 (a) IN GENERAL.—Section 7701(a) of the Internal 

3 Revenue Code of 1986 is amended by adding at the end 

4 the following new paragraph: 

5 ‘‘(51) DECENTRALIZED AUTONOMOUS ORGANI6 ZATIONS.— 

7 ‘‘(A) IN GENERAL.—The default classifica8 tion of a decentralized autonomous organization 

9 shall be as a business entity which is not a dis10 regarded entity. 

11 ‘‘(B) CLASSIFICATION OF OTHER ACTIVI12 TIES.—The following shall not be considered a 

13 business activity of such organization for pur14 poses of determining whether such organization 

15 is described in section 501(c)(7): 

16 ‘‘(i) Treasury management, including 

17 mining and staking of digital assets (as de18 fined in section 9801 of title 31, United 

19 States Code). 

20 ‘‘(ii) Raising funds for a charitable 

21 purpose. 

22 ‘‘(C) DECENTRALIZED AUTONOMOUS OR23 GANIZATION.—The term ‘decentralized autono24 mous organization’ means an organization— 

25 ‘‘(i) which utilizes smart contracts (as 

26 defined in section 9801 of title 31, United 


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1 States Code) to effectuate collective action 

2 for a business, commercial, charitable, or 

3 similar entity, 

4 ‘‘(ii) governance of which is achieved 

5 primarily on a distributed basis, and 

6 ‘‘(iii) which is properly incorporated 

7 or organized under the laws of a State or 

8 foreign jurisdiction as a decentralized au9 tonomous organization, cooperative, foun10 dation, or any similar entity.’’. 

11 (b) EFFECTIVE DATE.—Except as provided by sub12 section (c), the amendments made by this section shall 

13 apply to taxable years beginning after December 31, 2022. 

14 SEC. 205. TAX TREATMENT OF DIGITAL ASSET LENDING 

15 AGREEMENTS AND RELATED MATTERS. 

16 (a) IN GENERAL.—Subsection (a) of section 1058 of 

17 the Internal Revenue Code of 1986 is amended by striking 

18 ‘‘(as defined in section 1236(c))’’. 

19 (b) FIXED TERM.—Paragraph (1) of subsection (b) 

20 of section 1058 of the Internal Revenue Code of 1986 is 

21 amended by inserting ‘‘, including a fixed-term transfer 

22 that occurs in the ordinary course of a securities lending 

23 or investment management business’’ after ‘‘transferred’’. 

24 (c) BASIS.—Subsection (c) of section 1058 of the In25 ternal Revenue Code of 1986 is amended by adding at the 


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1 end the following: ‘‘All appropriate basis adjustments to 

2 an agreement under subsection (b) shall be made, as de3 termined by the Secretary, including upon the return of 

4 the lent securities to the taxpayer.’’. 

5 (d) SECURITIES.—Section 1058 of the Internal Rev6 enue Code of 1986 is amended by adding at the end the 

7 following new subsections: 

8 ‘‘(d) SECURITIES.—For purposes of this section, the 

9 term ‘securities’ has the meaning given such term by sec10 tion 1236(c), except that such term includes any digital 

11 asset (as defined in section 9801 of title 31, United States 

12 Code) and, with respect to a digital asset, does not require 

13 a call option. 

14 ‘‘(e) INCOME.—An amount equal to the income which 

15 would otherwise accrue to the lender but for a lending 

16 transaction under this section shall be included in gross 

17 income of the lender.’’. 

18 (e) RULE OF CONSTRUCTION.—Nothing in this sec19 tion shall be construed to create any inference with respect 

20 to the classification of any digital asset as security under 

21 the Securities Act of 1933 (15 U.S.C. 77a et seq.) or the 

22 Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). 

23 (f) RULEMAKING AUTHORITY.—The Secretary of the 

24 Treasury (or the Secretary’s delegate) may adopt rules to 


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1 implement this section, including the application of this 

2 section to forks, airdrops, and similar subsidiary value. 

3 (g) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to sales and exchanges after De5 cember 31, 2022. 

6 SEC. 206. IMPLEMENTING EFFECTIVE IRS GUIDANCE. 

7 (a) IN GENERAL.—Not later than 1 year after the 

8 date of the enactment of this Act, the Secretary of the 

9 Treasury (or the Secretary’s delegate) shall adopt guid10 ance relating to the following: 

11 (1) Classification of forks, airdrops, and similar 

12 subsidiary value as taxable, contingent upon the af13 firmative claim and disposition of the subsidiary 

14 value by a taxpayer. Such guidance shall also permit 

15 a taxpayer to provide notification through an annual 

16 return or other appropriate means to the Internal 

17 Revenue Service relating to claim and disposition of, 

18 or disclaimer of, subsidiary value. 

19 (2) Merchant acceptance of digital assets and 

20 the tax treatment of payments and receipts, con21 sistent with the amendments made by section 80603 

22 of the Infrastructure Investment and Jobs Act, as 

23 amended by section 203. 

24 (3) Treatment of digital asset mining and stak25 ing, including mining and staking rewards, in which 


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1 income is not realized until disposition of the assets 

2 produced or received in connection with such activ3 ity, in accordance with section 451(l) of the Internal 

4 Revenue Code of 1986 (as added by this Act). 

5 (4) Classification of charitable contributions 

6 greater than $5,000 of digital assets which are trad7 ed on established financial markets as contributions 

8 of readily valued property not requiring a qualified 

9 appraisal for purposes of section 170(f)(11)(A) of 

10 the Internal Revenue Code of 1986, as amended by 

11 this Act. 

12 (5) Characterization of payment stablecoins (as 

13 defined in section 9801 of title 31, United States 

14 Code) as indebtedness. 

15 (b) EFFECTIVE DATE.—The guidance adopted under 

16 this section shall be applicable on a prospective basis for 

17 taxable years beginning after December 31, 2023. 

18 SEC. 207. ANALYSIS OF RETIREMENT INVESTING IN DIG19 ITAL ASSETS. 

20 (a) Not later than March 1, 2023, the Comptroller 

21 General of the United States shall conduct a study and 

22 provide a report to the entities specified in subsection (b) 

23 regarding the following issues relating to retirement in24 vesting in digital assets: 


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1 (1) Potential benefits to diversification and re2 turn of an investor’s retirement portfolio. 

3 (2) Appropriate asset allocations, including 

4 among other alternative investments. 

5 (3) Consumer education, financial literacy and 

6 investment advisor training relating to digital assets. 

7 (4) Risk. 

8 (5) Legal and operational barriers to effective 

9 retirement investing in digital assets. 

10 (6) Any other topic determined to be material 

11 by the Comptroller General relating to retirement in12 vesting in digital assets. 

13 (b) The Comptroller General shall provide the report 

14 required by subsection (a) to the following: 

15 (1) The Committee on Banking, Housing, and 

16 Urban Affairs of the Senate. 

17 (2) The Committee on Finance of the Senate. 

18 (3) The Committee on Health, Education, 

19 Labor, and Pensions of the Senate. 

20 (4) The Committee on Financial Services of the 

21 House of Representatives. 

22 (5) The Committee on Ways and Means of the 

23 House of Representatives. 

24 (6) The Committee on Education and Labor of 

25 the House of Representatives. 


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1 (7) The Secretary of the Treasury. 

2 (8) The Secretary of Labor. 

3 SEC. 208. DIGITAL ASSET MINING AND STAKING. 

4 (a) IN GENERAL.—Section 451 of the Internal Rev5 enue Code of 1986 is amended by adding at the end the 

6 following new subsection: 

7 ‘‘(l) DEFERRAL OF INCOME RECOGNITION FOR DIG8 ITAL ASSET ACTIVITIES.—In the case of a taxpayer who 

9 conducts digital asset mining or staking activities, the 

10 amount of income relating to such activities shall not be 

11 included in the gross income of the taxpayer until the tax12 able year of the disposition of the assets produced or re13 ceived in connection with the mining or staking activi14 ties.’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 this section shall apply to taxable years beginning after 

17 December 31, 2022. 

18 SEC. 209. CONFORMING AMENDMENTS. 

19 (a) CHARITABLE CONTRIBUTIONS.— 

20 (1) IN GENERAL.—Subclause (I) of section 

21 170(f)(11)(A)(ii) of the Internal Revenue Code of 

22 1986 is amended by inserting ‘‘, digital assets (as 

23 defined in section 9801 of title 31, United States 

24 Code)’’ after ‘‘6050L(a)(2)(B))’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by this subsection shall apply to taxable years begin3 ning after December 31, 2022. 

4 (b) OTHER CONFORMING AMENDMENTS.— 

5 (1) IN GENERAL.—Title 31, United States 

6 Code, is amended— 

7 (A) in section 5312(a)(2)— 

8 (i) by redesignating subparagraphs 

9 (A) through (Z) as clauses (i) through 

10 (xxvi), respectively; 

11 (ii) in the matter preceding clause (i), 

12 as so designated, by striking ‘‘ ‘institution’ 

13 means—’’ and inserting ‘‘ ‘institution’— 

14 ‘‘(A) means—’’; 

15 (iii) in clause (xxvi), as so designated, 

16 by striking the period at the end and in17 serting ‘‘; and’’; and 

18 (iv) by adding at the end the fol19 lowing: 

20 ‘‘(B) does not include a decentralized au21 tonomous organization, as defined in section 

22 7701(a) of the Internal Revenue Code of 

23 1986.’’; and 

24 (B) in section 5336(a)(11)(B)(2)— 


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•S 4356 IS

1 (i) by redesignating clause (xxv) as 

2 clause (xxvi); and 

3 (ii) by adding after clause (xxv) the 

4 following: 

5 ‘‘(xxv) A decentralized autonomous 

6 organization, as defined in section 7701(a) 

7 of the Internal Revenue Code of 1986; 

8 and’’. 

9 (2) ANTI-MONEY LAUNDERING ACT OF 2020.— 

10 Section 6110(a) of the Anti-Money Laundering Act 

11 of 2020 (division F of Public Law 116–283) is 

12 amended by striking paragraph (1) and inserting the 

13 following: 

14 ‘‘(A) by redesignating clauses (xxv) and 

15 (xxvi) as clauses (xxvi) and (xxvii), respectively, 

16 and adjust the margins accordingly; and 

17 ‘‘(B) by inserting after clause (xxiv) the 

18 following: 

19 ‘‘ ‘(Y) a person engaged in the trade of an20 tiquities, including an advisor, consultant, or 

21 any other person who engages as a business in 

22 the solicitation or the sale of antiquities, subject 

23 to regulations prescribed by the Secretary;’.’’. 


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1 TITLE III—RESPONSIBLE 

2 SECURITIES INNOVATION 

3 SEC. 301. SECURITIES OFFERINGS INVOLVING CERTAIN IN4 TANGIBLE ASSETS. 

5 Title I of the Securities Exchange Act of 1934 (15 

6 U.S.C. 78a et seq.) is amended by adding at the end the 

7 following: 

8 ‘‘SEC. 41. SECURITIES OFFERINGS INVOLVING CERTAIN IN9 TANGIBLE ASSETS. 

10 ‘‘(a) DEFINITIONS.—In this section: 

11 ‘‘(1) ANCILLARY ASSET.— 

12 ‘‘(A) IN GENERAL.—The term ‘ancillary 

13 asset’ means an intangible, fungible asset that 

14 is offered, sold, or otherwise provided to a per15 son in connection with the purchase and sale of 

16 a security through an arrangement or scheme 

17 that constitutes an investment contract, as that 

18 term is used in section 2(a)(1) of the Securities 

19 Act of 1933 (15 U.S.C. 77b(a)(1)). 

20 ‘‘(B) EXCLUSION.—The term ‘ancillary 

21 asset’ does not include an asset that provides 

22 the holder of the asset with any of the following 

23 rights in a business entity: 

24 ‘‘(i) A debt or equity interest in that 

25 entity. 


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1 ‘‘(ii) Liquidation rights with respect 

2 to that entity. 

3 ‘‘(iii) An entitlement to an interest or 

4 dividend payment from that entity. 

5 ‘‘(iv) A profit or revenue share in that 

6 entity solely from the entrepreneurial or 

7 managerial efforts of others. 

8 ‘‘(v) Any other financial interest in 

9 that entity. 

10 ‘‘(2) FOREIGN PRIVATE ISSUER.—The term 

11 ‘foreign private issuer’ means a foreign issuer, other 

12 than a foreign government, except that the term 

13 does not include a foreign issuer that, as of the last 

14 business day of the most recently completed fiscal 

15 quarter of the issuer, satisfies the following condi16 tions: 

17 ‘‘(A) More than 50 percent of the out18 standing voting securities of the issuer are di19 rectly or indirectly owned by residents of the 

20 United States. 

21 ‘‘(B) Any of the following: 

22 ‘‘(i) The majority of the executive offi23 cers or directors of the issuer are citizens 

24 or residents of the United States. 


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1 ‘‘(ii) More than 50 percent of the as2 sets of the issuer are located in the United 

3 States. 

4 ‘‘(iii) The business of the issuer is 

5 principally administered in the United 

6 States. 

7 ‘‘(b) DISCLOSURE REQUIREMENTS.— 

8 ‘‘(1) INITIAL COMPLIANCE WITH SPECIFIED

9 PERIODIC DISCLOSURE REQUIREMENTS.—Subject to 

10 paragraphs (4) and (5), an issuer engaged in busi11 ness in or affecting interstate commerce, or that is 

12 organized outside of the United States and is not a 

13 foreign private issuer, that offers, sells, or otherwise 

14 provides a security through an arrangement or 

15 scheme that constitutes an investment contract, as 

16 that term is used in section 2(a)(1) of the Securities 

17 Act of 1933 (15 U.S.C. 77b(a)(1)), and that pro18 vides or proposes to provide any holder of the secu19 rity with an ancillary asset, shall be subject to the 

20 periodic disclosure requirements under subsection (c) 

21 for the 1-year period beginning on the date that is 

22 180 days after the first date on which the security 

23 is offered, sold, or otherwise provided by the issuer, 

24 if— 


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1 ‘‘(A) the average daily aggregate value of 

2 all ancillary assets offered, sold, or otherwise 

3 provided by the issuer in relation to the offer, 

4 sale, or provision of the security in all spot 

5 markets open to the public in the United States 

6 (based on the knowledge of the issuer after due 

7 inquiry) is greater than $5,000,000 for the 

8 180-day period immediately succeeding the date 

9 of that first offer, sale, or provision; and 

10 ‘‘(B) during the 180-day period described 

11 in subparagraph (A), the issuer, or any person 

12 owning not less than 10 percent of any class of 

13 equity securities of the issuer, engaged in entre14 preneurial or managerial efforts that primarily 

15 determined the value of the ancillary asset. 

16 ‘‘(2) ONGOING COMPLIANCE WITH SPECIFIED

17 PERIODIC DISCLOSURE REQUIREMENTS.—Subject to 

18 paragraphs (4) and (5), an issuer that is engaged in 

19 business in or affecting interstate commerce, or that 

20 is organized outside of the United States and is not 

21 a foreign private issuer, that offers, sells, or other22 wise provides a security through an arrangement or 

23 scheme that constitutes an investment contract, as 

24 that term is used in section 2(a)(1) of the Securities 

25 Act of 1933 (15 U.S.C. 77b(a)(1)), and that proVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 vides the holder of the security with an ancillary 

2 asset in connection with the acquisition of the secu3 rity, shall be subject to the periodic disclosure re4 quirements under subsection (c) for a given fiscal 

5 year of that issuer, if, in the immediately preceding 

6 fiscal year of the issuer (or any portion thereof)— 

7 ‘‘(A) the average daily aggregate value of 

8 all trading in the ancillary asset in all spot mar9 kets open to the public in the United States 

10 was greater than $5,000,000, based on the 

11 knowledge of the issuer after due inquiry; and 

12 ‘‘(B) the issuer, or any person owning not 

13 less than 10 percent of any class of equity secu14 rities of the issuer, engaged in entrepreneurial 

15 or managerial efforts that primarily determined 

16 the value of the ancillary asset. 

17 ‘‘(3) TRANSITION RULE.—Subject to para18 graphs (4) and (5), an issuer that is engaged in 

19 business in or affecting interstate commerce, or that 

20 is organized outside of the United States and is not 

21 a foreign private issuer, that offers, sells, or other22 wise provides a security through an arrangement or 

23 scheme that constitutes an investment contract, as 

24 that term is used in section 2(a)(1) of the Securities 

25 Act of 1933 (15 U.S.C. 77b(a)(1)), and that proVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 vides the holder of the security with an ancillary 

2 asset before January 1, 2023, in connection with the 

3 acquisition of the security shall be subject to the 

4 periodic disclosure requirements under subsection (c) 

5 beginning in the first fiscal year of the issuer that 

6 begins on or after that date, if, in the immediately 

7 preceding fiscal year of the issuer— 

8 ‘‘(A) the average daily aggregate value of 

9 trading in the ancillary asset in all spot mar10 kets open to the public for which trading vol11 ume is generally available was greater than 

12 $5,000,000, based on the knowledge of the 

13 issuer after due inquiry; and 

14 ‘‘(B) the issuer, or any person owning not 

15 less than 10 percent of any class of equity secu16 rities of the issuer, engaged in entrepreneurial 

17 or managerial efforts that primarily determined 

18 the value of the ancillary asset. 

19 ‘‘(4) TREATMENT OF ANCILLARY ASSETS.— 

20 ‘‘(A) IN GENERAL.—Notwithstanding any 

21 other provision of law, if an issuer issues a se22 curity through an arrangement or scheme that 

23 constitutes an investment contract, as that term 

24 is used in section 2(a)(1) of the Securities Act 

25 of 1933 (15 U.S.C. 77b(a)(1)), is subject to 


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1 paragraph (1), (2), or (3), and is in compliance 

2 with the periodic disclosure requirements under 

3 subsection (c), an ancillary asset provided di4 rectly or indirectly by the issuer shall be pre5 sumed— 

6 ‘‘(i) to be a commodity, consistent 

7 with section 2(c)(2)(F) of the Commodity 

8 Exchange Act (7 U.S.C. 2(c)(2)(F)); and 

9 ‘‘(ii) not to be a security under— 

10 ‘‘(I) section 3(a); 

11 ‘‘(II) such section 2(a)(1); 

12 ‘‘(III) section 2(a) of the Invest13 ment Company Act of 1940 (15 

14 U.S.C. 80a–2(a)); 

15 ‘‘(IV) section 202(a) of the In16 vestment Advisers Act of 1940 (15 

17 U.S.C. 80b–2(a)); or 

18 ‘‘(V) any applicable provision of 

19 State law. 

20 ‘‘(B) OTHER PERSONS.—A person who is 

21 not an issuer, an entity controlled by an issuer 

22 (including a person that acquires an ancillary 

23 asset from such an issuer for the purpose of re24 sale or distribution of the ancillary asset), or a 

25 person acting at the direction or on the behalf 


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•S 4356 IS

1 of an issuer shall be not required to treat an 

2 ancillary asset provided by an issuer as a secu3 rity under this Act or any provision of law de4 scribed in subparagraph (A)(ii). 

5 ‘‘(C) EXCEPTION.— 

6 ‘‘(i) IN GENERAL.—Subparagraph (A) 

7 shall not apply to an ancillary asset if a 

8 court of the United States of competent ju9 risdiction, after an appropriate proceeding, 

10 issues an order finding that there is not a 

11 substantial basis for the presumption that 

12 the ancillary asset is a commodity and not 

13 a security under subparagraph (A). 

14 ‘‘(ii) RULES OF CONSTRUCTION.— 

15 Nothing in this subparagraph shall be con16 strued to preclude the Commission from 

17 entering into a settlement agreement relat18 ing to violations or alleged violations of 

19 this section. Compliance under this section 

20 shall not be used in any administrative or 

21 judicial proceeding that an ancillary asset 

22 is a security. 

23 ‘‘(5) CALCULATION.—For the purposes of para24 graphs (1), (2), and (3), the calculation of daily ag25 gregate value shall be based on data disclosed by 


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1 spot markets or otherwise available to the public for 

2 inspection. 

3 ‘‘(c) SPECIFIED PERIODIC DISCLOSURE REQUIRE4 MENTS.—If an issuer is subject to paragraph (1), (2), or 

5 (3) of subsection (b), the issuer shall furnish, or cause 

6 the relevant affiliate to furnish, to the Commission, on a 

7 semi-annual basis, information that the Commission may, 

8 by rule, require relating to the issuer and any relevant 

9 ancillary asset, as necessary or appropriate in the public 

10 interest or for the protection of investors, which shall be 

11 exclusively comprised of the following: 

12 ‘‘(1) Basic corporate information regarding the 

13 issuer, including the following: 

14 ‘‘(A) The experience of the issuer in devel15 oping assets similar to the ancillary asset. 

16 ‘‘(B) If the issuer has previously provided 

17 ancillary assets to purchasers of securities, in18 formation on the subsequent history of those 

19 previously provided ancillary assets, including 

20 price history, if the information is publicly 

21 available. 

22 ‘‘(C) The activities that the issuer has 

23 taken in the relevant disclosure period, and is 

24 projecting to take in the 1-year period following 

25 the submission of the disclosure, with respect to 


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•S 4356 IS

1 promoting the use, value, or resale of the ancil2 lary asset (including any activity to facilitate 

3 the creation or maintenance of a trading mar4 ket for the ancillary asset and any network or 

5 system that utilizes the ancillary asset). 

6 ‘‘(D) The anticipated cost of the activities 

7 of the issuer in subparagraph (C) and whether 

8 the issuer has unencumbered, liquid funds equal 

9 to that amount. 

10 ‘‘(E) To the extent the ancillary asset in11 volves the use of a particular technology, the 

12 experience of the issuer with the use of that 

13 technology. 

14 ‘‘(F) The backgrounds of the board of di15 rectors (or equivalent body), senior manage16 ment, and key employees of the issuer, the ex17 perience or functions of whom are material to 

18 the value of the ancillary asset, as well as any 

19 personnel changes relating to the issuer during 

20 the period covered by the disclosure. 

21 ‘‘(G) A description of the assets and liabil22 ities of the issuer, to the extent material to the 

23 value of the ancillary asset. 

24 ‘‘(H) A description of any legal pro25 ceedings in which the issuer is engaged (includVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 ing inquiries by governmental agencies into the 

2 activities of the issuer), to the extent material 

3 to the value of the ancillary asset. 

4 ‘‘(I) Risk factors relating to the impact of 

5 the issuer on, or unique knowledge relating to, 

6 the value of the ancillary asset. 

7 ‘‘(J) Information relating to ownership of 

8 the ancillary asset by— 

9 ‘‘(i) persons owning not less than 10 

10 percent of any class of equity security of 

11 the issuer; and 

12 ‘‘(ii) the management of the issuer. 

13 ‘‘(K) Information relating to transactions 

14 involving the ancillary asset by the issuer with 

15 related persons, promoters, and control persons. 

16 ‘‘(L) Recent sales or similar dispositions of 

17 ancillary assets by the issuer and affiliates of 

18 the issuer. 

19 ‘‘(M) Purchases or similar dispositions of 

20 ancillary assets by the issuer and affiliates of 

21 the issuer. 

22 ‘‘(N) A going concern statement from the 

23 chief financial officer of the issuer or equivalent 

24 official, signed under penalty of perjury, stating 

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1 sources to continue business as a going concern 

2 for the 1-year period following the submission 

3 of the disclosure, absent a material change in 

4 circumstances. 

5 ‘‘(2) Information relating to the ancillary asset, 

6 including the following: 

7 ‘‘(A) A general description of the ancillary 

8 asset, including the standard unit of measure 

9 with respect to the ancillary asset, the intended 

10 or known functionality and uses of the ancillary 

11 asset, the market for the ancillary asset, other 

12 assets or services that may compete with the 

13 ancillary asset, and the total supply of the an14 cillary asset or the manner and rate of the on15 going production or creation of the ancillary 

16 asset. 

17 ‘‘(B) If ancillary assets have been offered, 

18 sold, or otherwise provided by the issuer to in19 vestors, intermediaries, or resellers, a descrip20 tion of the amount of assets offered, sold, or 

21 provided, the terms of each such transaction, 

22 and any contractual or other restrictions on the 

23 resale of the assets by intermediaries. 

24 ‘‘(C) If ancillary assets were distributed 

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•S 4356 IS

1 tion, including the identity of any recipient that 

2 received more than 5 percent of the total 

3 amount of the ancillary assets in any such dis4 tribution. 

5 ‘‘(D) The amount of ancillary assets owned 

6 by the issuer. 

7 ‘‘(E) For the 1-year period following the 

8 submission of the disclosure, a description of 

9 the plans of the issuer to support (or to cease 

10 supporting) the use or development of the ancil11 lary asset, including markets for the ancillary 

12 asset and each platform or system that uses the 

13 ancillary asset. 

14 ‘‘(F) Each third party not affiliated with 

15 the issuer, the activities of which may have a 

16 material impact on the value of the ancillary 

17 asset. 

18 ‘‘(G) Risk factors known to the issuer that 

19 may limit demand for, or interest in, the ancil20 lary asset. 

21 ‘‘(H) The names and locations of the mar22 kets in which the ancillary asset is known by 

23 the issuer to be available for sale or purchase. 

24 ‘‘(I) To the extent available to the issuer, 

25 the average daily price for a constant unit of 


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•S 4356 IS

1 value of the ancillary asset during the relevant 

2 reporting period, as well as the 12-month high 

3 and low prices for the ancillary asset. 

4 ‘‘(J) If applicable, information relating to 

5 any external audit of the code and functionality 

6 of the ancillary asset, including the entity per7 forming the audit and the experience of the en8 tity in conducting similar audits. 

9 ‘‘(K) If applicable, any third-party valu10 ation report or economic analysis regarding the 

11 ancillary asset or the projected market of the 

12 ancillary asset, which shall include the entity 

13 performing the valuation or analysis and the ex14 perience of the entity in conducting similar re15 ports or analyses. 

16 ‘‘(L) If the ancillary asset is intangible, in17 formation relating to custody by the owner of 

18 the ancillary asset or a third party. 

19 ‘‘(M) Information on intellectual property 

20 rights claimed or disputed relating to the ancil21 lary asset. 

22 ‘‘(N) A description of the technology un23 derlying the ancillary asset. 


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1 ‘‘(O) Any material tax considerations ap2 plicable to owning, storing, using, or trading 

3 the ancillary asset. 

4 ‘‘(P) Any material legal or regulatory con5 siderations applicable to owning, storing, using, 

6 or trading the ancillary asset, including any 

7 legal proceeding that may impact the value of 

8 the ancillary asset. 

9 ‘‘(Q) Any other material factor or informa10 tion that may impact the value of the ancillary 

11 asset and about which the issuer is reasonably 

12 aware. 

13 ‘‘(d) APPLICATION TO SUCCESSOR ENTITIES AND

14 CERTAIN AFFILIATES.— 

15 ‘‘(1) IN GENERAL.—If an issuer would other16 wise be subject to specified periodic disclosure re17 quirements under subsection (c) and is no longer in 

18 operation, any successor entity that directly or indi19 rectly received not less than 50 percent of the pro20 ceeds raised by the sale of the related securities of 

21 that issuer, and that is engaged in entrepreneurial 

22 or managerial efforts that primarily determine the 

23 value of the applicable ancillary asset, shall furnish, 

24 or cause to be furnished, to the Commission the in25 formation required under that subsection. 


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1 ‘‘(2) CERTAIN AFFILIATES.—If an entity con2 trolled by an issuer is subject to specified periodic 

3 disclosure requirements under subsection (c) and is 

4 engaged in entrepreneurial or managerial efforts 

5 that primarily determine the value of an ancillary 

6 asset, the entity may furnish to the Commission the 

7 information required under that subsection. 

8 ‘‘(e) VOLUNTARY DISCLOSURE.—An issuer that is 

9 not subject to the specified periodic disclosure require10 ments under subsection (c) and that offers or sells a secu11 rity through an arrangement or scheme that constitutes 

12 an investment contract, as that term is used in section 

13 2(a)(1) of the Securities Act of 1933 (15 U.S.C. 

14 77b(a)(1)), and that provides the holder of that security 

15 with an ancillary asset in connection with the acquisition 

16 of the security may voluntarily furnish to the Commission 

17 the information required under that subsection if the 

18 issuer believes that it is reasonably likely that the issuer 

19 will become subject to those requirements in the future. 

20 ‘‘(f) EXEMPTIONS.—The Commission may, by order, 

21 exempt an ancillary asset from the specified periodic dis22 closure requirements under subsection (c) if the Commis23 sion determines that the public policy goals of disclosure 

24 and consumer protection are not satisfied by requiring dis25 closures relating to an ancillary asset. 


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1 ‘‘(g) RULE OF CONSTRUCTION.—If an issuer fails to 

2 comply with a provision of this section, an ancillary asset 

3 provided by the issuer shall not be presumed to be a secu4 rity under a provision of law described in subsection 

5 (b)(4)(A)(ii), solely because of such failure. 

6 ‘‘(h) RULES.—The Commission may adopt rules and 

7 guidance to implement this section, consistent with the 

8 statutory intent of this section.’’. 

9 SEC. 302. TERMINATION OF SPECIFIED PERIODIC DISCLO10 SURE REQUIREMENTS. 

11 Section 41 of the Securities Exchange Act of 1934, 

12 as added by section 301 of this Act, is amended by adding 

13 at the end the following: 

14 ‘‘(i) TERMINATION OF SPECIFIED PERIODIC DISCLO15 SURE REQUIREMENTS.— 

16 ‘‘(1) IN GENERAL.—The obligation of an issuer 

17 to furnish the information required under subsection 

18 (c) shall terminate on the date that is 90 days, or 

19 such shorter period as the Commission may deter20 mine, after the date on which the issuer files a cer21 tification described in paragraph (2). 

22 ‘‘(2) CERTIFICATION.— 

23 ‘‘(A) IN GENERAL.—A certification filed 

24 under paragraph (1) shall be supported by rea25 sonable evidence, based on the knowledge of the 


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•S 4356 IS

1 issuer filing the certification, after due inquiry, 

2 that— 

3 ‘‘(i) the average daily aggregate value 

4 of all trading in the applicable ancillary 

5 asset in all spot markets open to the public 

6 in the United States in the 12-month pe7 riod preceding the date on which the cer8 tification is filed was not greater than 

9 $5,000,000; or 

10 ‘‘(ii) during the 12-month period pre11 ceding the date on which the certification 

12 is filed, neither the applicable issuer, nor 

13 any entity controlled by the applicable 

14 issuer, engaged in entrepreneurial or man15 agerial efforts that primarily determined 

16 the value of the ancillary asset. 

17 ‘‘(B) DENIAL.— 

18 ‘‘(i) IN GENERAL.—Subject to sub19 paragraph (C)(ii), the Commission may, by 

20 majority vote and after notice and oppor21 tunity for hearing, deny a certification filed 

22 under paragraph (1) if the Commission 

23 finds that the certification is not supported 

24 by substantial evidence. 


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1 ‘‘(ii) EFFECT.—The denial, under 

2 clause (i), of a certification filed under 

3 paragraph (1)— 

4 ‘‘(I) shall terminate the certifi5 cation so filed; and 

6 ‘‘(II) shall not prevent the appli7 cable issuer from filing another cer8 tification under paragraph (1), if the 

9 re-filed certification is filed not earlier 

10 than 180 days after the date on which 

11 the original certification is denied. 

12 ‘‘(C) PENDING STATUS.— 

13 ‘‘(i) IN GENERAL.—Termination of 

14 the disclosure requirements described in 

15 paragraph (1) applicable to an issuer that 

16 has filed a certification under that para17 graph shall be deferred pending review by 

18 the Commission of the evidence supporting 

19 the certification. 

20 ‘‘(ii) EFFECT OF DELAY.—If, as of 

21 the date that is 90 days after receiving a 

22 certification filed under paragraph (1), the 

23 Commission has not requested additional 

24 evidence with respect to the certification 

25 from the applicable issuer, the disclosure 


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•S 4356 IS

1 obligations that are the subject of the cer2 tification shall terminate.’’. 

3 SEC. 303. GUIDANCE RELATING TO SATISFACTORY CON4 TROL LOCATION. 

5 Not later than 180 days after the date of the enact6 ment of this Act, the Securities and Exchange Commission 

7 (referred to in this title as the ‘‘Commission’’) shall issue 

8 guidance relating to section 240.15c3–3 of title 17, Code 

9 of Federal Regulations, or any successor regulation, pro10 viding that the requirement to designate a satisfactory 

11 control location for a digital asset that is, or may rep12 resent ownership of, a security may be satisfied by pro13 tecting the digital asset through commercially reasonable 

14 cybersecurity practices to maintain control of sufficient 

15 private key material to transfer control of the digital asset 

16 to another person, or to cause another person to obtain 

17 control of the digital asset, including by means of a smart 

18 contract that generates private key material without the 

19 involvement of a natural person. 

20 SEC. 304. CUSTODY AND CUSTOMER PROTECTION RULES. 

21 (a) IN GENERAL.— 

22 (1) MODERNIZATION OF EXISTING RULES AND

23 ADOPTION OF NEW RULES.—Not later than 18 

24 months after the date of enactment of this Act, the 

25 Commission shall— 


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1 (A) complete the multi-year study of the 

2 Commission with respect to the modernization 

3 of the rules of the Commission relating to cus4 tomer protection (section 240.15c3–3 of title 

5 17, Code of Federal Regulations) and custody 

6 of securities, digital assets, and client funds 

7 (section 275.206(4)–2 of title 17, Code of Fed8 eral Regulations); and 

9 (B) consistent with the results of the study 

10 described in subparagraph (A), adopt final rules 

11 relating to the issues described in paragraph 

12 (2). 

13 (2) CONTENTS.—The final rules adopted under 

14 paragraph (1)(B) shall address the following con15 cepts: 

16 (A) Investor protection and education with 

17 respect to digital assets. 

18 (B) Digital assets, distributed ledger tech19 nology, and use of collaborative custody or 

20 multi-signature arrangements, including dis21 tribution of private key material and resulting 

22 obligations. 

23 (C) Changes in market structure and asset 

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1 curities and assets and appropriate custodial 

2 methods for electronically native assets. 

3 (D) Reduction of regulatory burden. 

4 (E) Use of technology to facilitate regu5 latory compliance and risk management. 

6 (F) Parity of State- and nationally char7 tered banks, as defined in section 202(a) of the 

8 Investment Advisers Act of 1940 (15 U.S.C. 

9 80b–2(a)), with respect to asset custody in a 

10 manner consistent with that Act (15 U.S.C. 

11 80b–1 et seq.) and other existing law. 

12 (G) Standards under which an issuer of an 

13 unregistered digital asset that is, or may rep14 resent ownership of, a security is not required 

15 to utilize a registered transfer agent. 

16 (H) Specification of the digital assets 

17 which constitute client funds under section 

18 275.206(4)–2 of title 17, Code of Federal Reg19 ulations. 

20 (b) DIGITAL ASSETS AND SECURITIES.—Not later 

21 than 270 days after the date of enactment of this Act, 

22 the Commission shall adopt final guidance permitting, for 

23 the purposes of section 240.15c3–3(b) of title 17, Code 

24 of Federal Regulations, a broker or a dealer to perform, 

25 within the same legal entity, both trading and custodial 


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1 activities relating to fully paid and excess margin digital 

2 assets, including virtual currency and digital assets that 

3 are securities or may represent ownership of securities, in 

4 addition to traditional securities, client funds, and other 

5 assets permitted by the Commission to be within the con6 trol of a broker or dealer. 

7 TITLE IV—RESPONSIBLE 

8 COMMODITIES INNOVATION 

9 SEC. 401. DEFINITIONS. 

10 Section 1a of the Commodity Exchange Act (7 U.S.C. 

11 1a) is amended— 

12 (1) in paragraph (9), by striking ‘‘and frozen 

13 concentrated orange juice’’ and inserting ‘‘frozen 

14 concentrated orange juice, and a digital asset (con15 sistent with section 2(c)(2)(F))’’; 

16 (2) by inserting after paragraph (15) the fol17 lowing: 

18 ‘‘(15A) DIGITAL ASSET.— 

19 ‘‘(A) IN GENERAL.—Except as provided in 

20 subparagraph (B), the term ‘digital asset’ has 

21 the meaning given the term in section 9801 of 

22 title 31, United States Code. 

23 ‘‘(B) EXCLUSION.—The term ‘digital 

24 asset’ does not include an asset that provides 


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1 the holder of the asset with any of the following 

2 rights in a business entity: 

3 ‘‘(i) A debt or equity interest in that 

4 entity. 

5 ‘‘(ii) Liquidation rights with respect 

6 to that entity. 

7 ‘‘(iii) An entitlement to an interest or 

8 dividend payment from that entity. 

9 ‘‘(iv) A profit or revenue share in that 

10 entity derived solely from the entrepre11 neurial or managerial efforts of others. 

12 ‘‘(v) Any other financial interest in 

13 that entity. 

14 ‘‘(15B) DIGITAL ASSET EXCHANGE.—The term 

15 ‘digital asset exchange’ means a trading facility that 

16 lists for trading at least 1 digital asset.’’; 

17 (3) in paragraph (28)(A)(i)— 

18 (A) in subclause (I)— 

19 (i) in item (aa)— 

20 (I) in subitem (EE), by striking 

21 ‘‘or’’ at the end; and 

22 (II) by adding at the end the fol23 lowing: 

24 ‘‘(GG) the purchase or 

25 sale of a digital asset that is 


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1 traded on or subject to the 

2 rules of a registered entity;’’; 

3 (ii) in item (bb), by striking ‘‘and’’ 

4 and inserting ‘‘or’’; and 

5 (iii) by adding at the end the fol6 lowing: 

7 ‘‘(cc) acting as a 

8 counterparty to any cash or spot 

9 agreement, contract, or trans10 action involving a digital asset 

11 with a person who is not an eligi12 ble contract participant, unless 

13 the activity is— 

14 ‘‘(AA) conducted in 

15 compliance with the laws of 

16 the State in which the activ17 ity occurs; 

18 ‘‘(BB) subject to regu19 lation by another Federal 

20 authority; or 

21 ‘‘(CC) separately regu22 lated under this Act; and’’; 

23 and 


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1 (B) in subclause (II), by striking ‘‘items 

2 (aa) or (bb)’’ and inserting ‘‘item (aa), (bb), or 

3 (cc)’’; 

4 (4) by inserting after paragraph (39) the fol5 lowing: 

6 ‘‘(39A) REGISTERED DIGITAL ASSET EX7 CHANGE.—The term ‘registered digital asset ex8 change’ means a digital asset exchange registered 

9 under section 5i.’’; and 

10 (5) in paragraph (40)— 

11 (A) in subparagraph (E), by striking 

12 ‘‘and’’ at the end; 

13 (B) by redesignating subparagraph (F) as 

14 subparagraph (G); and 

15 (C) by inserting after subparagraph (E) 

16 the following: 

17 ‘‘(F) a registered digital asset exchange; 

18 and’’. 

19 SEC. 402. REPORTING AND RECORDKEEPING. 

20 Section 4g of the Commodity Exchange Act (7 U.S.C. 

21 6g) is amended— 

22 (1) in subsection (a), by inserting ‘‘digital as23 sets or’’ before ‘‘commodities’’; and 


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1 (2) in subsection (d), in the second sentence, by 

2 striking ‘‘commodity futures.’’ and inserting ‘‘com3 modities.’’. 

4 SEC. 403. CFTC JURISDICTION OVER DIGITAL ASSET 

5 TRANSACTIONS. 

6 (a) COMMISSION JURISDICTION OVER RETAIL DIG7 ITAL ASSET TRANSACTIONS.— 

8 (1) IN GENERAL.—Section 2(c)(2) of the Com9 modity Exchange Act (7 U.S.C. 2(c)(2)) is amend10 ed— 

11 (A) in subparagraph (D)(ii)— 

12 (i) in subclause (III), in the matter 

13 preceding item (aa), by inserting ‘‘of a 

14 commodity, other than a digital asset,’’ be15 fore ‘‘that’’; 

16 (ii) by redesignating subclauses (IV) 

17 and (V) as subclauses (V) and (VI), re18 spectively; and 

19 (iii) by inserting after subclause (III) 

20 the following: 

21 ‘‘(IV) a contract of sale of a dig22 ital asset that— 

23 ‘‘(aa) results in actual deliv24 ery within 2 days or such other 

25 period as the Commission may 


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1 determine by rule based upon the 

2 typical commercial practice in 

3 cash or spot markets for the dig4 ital asset involved; or 

5 ‘‘(bb) is executed on or sub6 ject to the rules of a registered 

7 digital asset exchange or with a 

8 registered futures commission 

9 merchant;’’; and 

10 (B) by adding at the end the following: 

11 ‘‘(F) COMMISSION JURISDICTION OVER

12 DIGITAL ASSET TRANSACTIONS.— 

13 ‘‘(i) IN GENERAL.— 

14 ‘‘(I) JURISDICTION.—Subject to 

15 sections 6d and 12(e) and section 403 

16 of the Commodity Futures Moderniza17 tion Act of 2000 (7 U.S.C. 27a), the 

18 Commission shall have exclusive juris19 diction over any agreement, contract, 

20 or transaction involving a contract of 

21 sale of a digital asset in interstate 

22 commerce, including ancillary assets 

23 (consistent with section 41(b)(4) of 

24 the Securities Exchange Act of 1934), 

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1 ing requirements made by an issuer 

2 which provided the holder of the secu3 rity with an ancillary asset under that 

4 section, and the security that con5 stitutes an investment contract (with6 in the meaning of section 2(a)(1) of 

7 the Securities Act of 1933 (15 U.S.C. 

8 77b(a)(1))), shall remain within the 

9 jurisdiction of the Securities and Ex10 change Commission. 

11 ‘‘(II) FUNGIBILITY REQUIRE12 MENT.—The Commission shall only 

13 exercise jurisdiction over an agree14 ment, contract, or transaction involv15 ing a contract of sale of a digital asset 

16 that is fungible, which shall not in17 clude digital collectibles and other 

18 unique digital assets. 

19 ‘‘(ii) WITHHOLDING OF RULEMAKING

20 AUTHORITY OVER CERTAIN TRANS21 ACTIONS.—Notwithstanding clause (i), this 

22 subparagraph shall not be interpreted to 

23 permit the Commission to issue any rule 

24 regarding any agreement, contract, or 

25 transaction that is not offered, solicited, 


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1 traded, facilitated, executed, cleared, re2 ported, or otherwise dealt in— 

3 ‘‘(I) on or subject to the rules of 

4 a registered entity; or 

5 ‘‘(II) by any other entity reg6 istered by the Commission. 

7 ‘‘(iii) LIMITATION.—Clause (i) shall 

8 not apply to custodial activities with re9 spect to a digital asset of an entity super10 vised or regulated by a State or other Fed11 eral regulatory agency.’’. 

12 (2) CONFORMING AMENDMENT.—Section 

13 2(a)(1)(A) of the Commodity Exchange Act (7 

14 U.S.C. 2(a)(1)(A)) is amended, in the first sentence, 

15 by striking ‘‘section 19 of this Act’’ and inserting 

16 ‘‘subsection (c)(2)(F) or section 19’’. 

17 (b) SEGREGATION OF DIGITAL ASSETS.—Section 4d 

18 of the Commodity Exchange Act (7 U.S.C. 6d) is amended 

19 by adding at the end the following: 

20 ‘‘(i) SEGREGATION OF DIGITAL ASSETS.— 

21 ‘‘(1) HOLDING OF CUSTOMER ASSETS.— 

22 ‘‘(A) IN GENERAL.—Each futures commis23 sion merchant shall hold customer money, as24 sets, and property in a manner to minimize the 

25 customer’s risk of loss of, or unreasonable delay 


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1 in the access to, the money, assets, and prop2 erty. 

3 ‘‘(B) CUSTODIAN.—A futures commission 

4 merchant shall hold the property of a customer 

5 of the futures commission merchant with a li6 censed, chartered, or registered entity subject to 

7 regulation by 1 of the following agencies: 

8 ‘‘(i) The Commission. 

9 ‘‘(ii) The Securities and Exchange 

10 Commission. 

11 ‘‘(iii) An appropriate Federal banking 

12 agency (as defined in section 3 of the Fed13 eral Deposit Insurance Act (12 U.S.C. 

14 1813)). 

15 ‘‘(iv) A State bank supervisor (as de16 fined in that section). 

17 ‘‘(v) An appropriate foreign govern18 mental authority in the home country of 

19 the custodian. 

20 ‘‘(2) SEGREGATION OF FUNDS.— 

21 ‘‘(A) DEFINITION OF DIGITAL ASSET CUS22 TOMER.—In this paragraph, the term ‘digital 

23 asset customer’ means a customer involved in a 

24 cash or spot, leveraged, margined, or financed 

25 digital asset transaction in which the futures 


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1 commission merchant is acting as the 

2 counterparty. 

3 ‘‘(B) REQUIREMENTS.— 

4 ‘‘(i) IN GENERAL.—A futures commis5 sion merchant shall treat and deal with all 

6 money, assets, and property of any digital 

7 asset customer received as belonging to the 

8 customer. 

9 ‘‘(ii) COMMINGLING PROHIBITED.— 

10 Money, assets, and property of a digital 

11 asset customer described in clause (i)— 

12 ‘‘(I) shall be separately accounted 

13 for; and 

14 ‘‘(II) shall not be— 

15 ‘‘(aa) commingled with the 

16 funds of the futures commission 

17 merchant; or 

18 ‘‘(bb) used to margin, se19 cure, or guarantee any trades or 

20 accounts of any customer or per21 son other than the person for 

22 whom the money, assets, or prop23 erty are held. 

24 ‘‘(C) EXCEPTIONS.— 

25 ‘‘(i) USE OF FUNDS.— 


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1 ‘‘(I) IN GENERAL.—Notwith2 standing subparagraph (B), money, 

3 assets, and property of a digital asset 

4 customer may, for convenience, be 

5 commingled and deposited in the same 

6 account or accounts with an entity de7 scribed in paragraph (1)(B). 

8 ‘‘(II) WITHDRAWAL.—Notwith9 standing subparagraph (B), the share 

10 of the money, assets, and property de11 scribed in subclause (I) as in the nor12 mal course of business is necessary to 

13 margin, guarantee, secure, transfer, 

14 adjust, or settle a digital asset trans15 action with a registered entity may be 

16 withdrawn and applied to those pur17 poses, including the payment of com18 missions, brokerage, interest, taxes, 

19 storage, and other charges, lawfully 

20 accruing in connection with the digital 

21 asset transaction. 

22 ‘‘(ii) COMMISSION ACTION.—Notwith23 standing subparagraph (B), in accordance 

24 with such terms and conditions as the 

25 Commission may prescribe by rule or 


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1 order, any money, assets, or property of a 

2 digital asset customer may be commingled 

3 and deposited in customer accounts with 

4 any other money, assets, or property re5 ceived by the futures commission merchant 

6 and required by the Commission to be sep7 arately accounted for and treated and dealt 

8 with as belonging to the digital asset cus9 tomer. 

10 ‘‘(D) PERMITTED INVESTMENTS.—Money 

11 of a digital asset customer may be invested— 

12 ‘‘(i) in— 

13 ‘‘(I) obligations of the United 

14 States; 

15 ‘‘(II) general obligations of any 

16 State or of any political subdivision of 

17 a State; 

18 ‘‘(III) obligations fully guaran19 teed as to principal and interest by 

20 the United States; or 

21 ‘‘(IV) any other investment that 

22 the Commission may by rule pre23 scribe; and 


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1 ‘‘(ii) in accordance with such rules 

2 and subject to such conditions as the Com3 mission may prescribe. 

4 ‘‘(E) PROHIBITION.—It shall be unlawful 

5 for any person, including any derivatives clear6 ing organization or depository institution, that 

7 has received any money, assets, or property for 

8 deposit in a separate account or accounts as re9 quired by subparagraph (B) to hold, dispose of, 

10 or use any of the money, assets, or property 

11 that belongs to the depositing futures commis12 sion merchant or any person other than the dig13 ital asset customer of the futures commission 

14 merchant. 

15 ‘‘(3) CUSTOMER RIGHT TO OPT OUT.— 

16 ‘‘(A) IN GENERAL.—A customer shall have 

17 the right to waive any requirement under this 

18 subsection by affirmatively electing, in writing 

19 to the futures commission merchant, to waive 

20 the requirement. 

21 ‘‘(B) LIMITATIONS.—The Commission 

22 may, by rule, establish notice and disclosure re23 quirements, segregation requirements, invest24 ment limitations, and other rules relating to the 

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1 section that are reasonably necessary to protect 

2 customers, including eligible contract partici3 pants, non-eligible contract participants, and 

4 any other class of customers.’’. 

5 (c) LIMITATION ON FUTURES COMMISSION MER6 CHANTS ACTING AS A COUNTERPARTY IN DIGITAL ASSET

7 TRANSACTIONS.—Section 4d of the Commodity Exchange 

8 Act (7 U.S.C. 6d) (as amended by subsection (b)) is 

9 amended by adding at the end the following: 

10 ‘‘(j) LIMITATION ON FUTURES COMMISSION MER11 CHANTS ACTING AS A COUNTERPARTY IN DIGITAL ASSET

12 TRANSACTIONS.—A registered futures commission mer13 chant shall not act as a counterparty in any agreement, 

14 contract, or transaction involving a digital asset that has 

15 not been listed for trading on a registered digital asset 

16 exchange.’’. 

17 (d) COMMON PROVISIONS APPLICABLE TO REG18 ISTERED ENTITIES.—Section 5c of the Commodity Ex19 change Act (7 U.S.C. 7a–2) is amended— 

20 (1) in subsection (a)(1), by striking ‘‘5(d) and 

21 5b(c)(2)’’ and inserting ‘‘5(d), 5b(c)(2), and 5i(c)’’; 

22 (2) in subsection (b), by inserting ‘‘registered 

23 digital asset exchange,’’ before ‘‘derivatives’’ each 

24 place it appears; and 

25 (3) in subsection (c)— 


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1 (A) in paragraph (2), by inserting ‘‘or par2 ticipants’’ before ‘‘(in a’’; 

3 (B) in paragraph (4)(B), by striking 

4 ‘‘1a(10)’’ and inserting ‘‘1a(9)’’; and 

5 (C) in paragraph (5), by adding at the end 

6 the following: 

7 ‘‘(D) SPECIAL RULES FOR THE LISTING OF

8 CERTAIN DIGITAL ASSETS.— 

9 ‘‘(i) IN GENERAL.—In the case of list10 ing for trading a digital asset that has not 

11 previously been listed for trading on an12 other registered entity— 

13 ‘‘(I) paragraphs (2) and (3) shall 

14 apply as if the listing were a rule; and 

15 ‘‘(II) paragraph (2) shall be ap16 plied by substituting ‘20 business 

17 days’ for ‘10 business days’. 

18 ‘‘(ii) TRANSITIONAL EXTENSION.— 

19 During the 1-year period beginning on the 

20 date of the registration of the first digital 

21 asset exchange, the Commission shall have 

22 an additional 20 business days to review 

23 any certification under clause (i). 

24 ‘‘(iii) CONSIDERATION OF COM25 MENTS.—In conducting a review under 


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1 clause (i), the Commission shall consider 

2 any comments provided by the Securities 

3 and Exchange Commission with respect to 

4 the legal classification of a digital asset.’’. 

5 SEC. 404. REGISTRATION OF DIGITAL ASSET EXCHANGES. 

6 (a) IN GENERAL.—The Commodity Exchange Act (7 

7 U.S.C. 1 et seq.) is amended by inserting after section 

8 5h the following: 

9 ‘‘SEC. 5i. REGISTRATION OF DIGITAL ASSET EXCHANGES. 

10 ‘‘(a) DEFINITION OF CUSTOMER.—In this section, 

11 the term ‘customer’ means any person that maintains an 

12 account for the trading of digital assets directly with a 

13 registered digital asset exchange (other than a person that 

14 is owned or controlled, directly or indirectly, by the reg15 istered digital asset exchange) on behalf of the person or 

16 any other person. 

17 ‘‘(b) REGISTRATION.— 

18 ‘‘(1) IN GENERAL.—Any trading facility that 

19 offers or seeks to offer a market in digital assets 

20 may register with the Commission as a digital asset 

21 exchange by submitting to the Commission an appli22 cation in such form and containing such information 

23 as the Commission may require for the purpose of 

24 making the determinations required for approval 

25 under subsections (d) and (f). 


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1 ‘‘(2) DEEMED REGISTRATION.—A registered 

2 designated contract market or registered swap exe3 cution facility that fulfills the requirements of this 

4 section may elect to be considered a registered dig5 ital asset exchange, in such form and manner as the 

6 Commission shall prescribe. 

7 ‘‘(3) ADDITIONAL REGISTRATION.—A registered 

8 digital asset exchange shall be registered with the 

9 Secretary of the Treasury as a money services busi10 ness. 

11 ‘‘(c) TRADING.— 

12 ‘‘(1) IN GENERAL.—A registered digital asset 

13 exchange may make available for trading any digital 

14 asset that is not readily susceptible to manipulation, 

15 subject to this subsection. 

16 ‘‘(2) RULES GOVERNING MARGINED OR LEVER17 AGED TRADING.—The Commission may make, pro18 mulgate, and enforce such additional rules governing 

19 margined, leveraged, or financed transactions as are 

20 reasonably necessary to protect market participants 

21 and promote the orderly settlement of transactions 

22 with respect to— 

23 ‘‘(A) disclosure; 

24 ‘‘(B) recordkeeping; 


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1 ‘‘(C) capital, margin, and other financial 

2 resources; 

3 ‘‘(D) reporting; 

4 ‘‘(E) business conduct; 

5 ‘‘(F) documentation; and 

6 ‘‘(G) such other matters as the Commis7 sion determines to be necessary. 

8 ‘‘(3) PROHIBITION ON TRADING DERIVATIVES

9 PRODUCTS.—Registration as a digital asset exchange 

10 shall not permit a trading facility to offer any con11 tract of sale of a commodity for future delivery, op12 tion, or swap for trading without also being reg13 istered as a designated contract market or swap exe14 cution facility. 

15 ‘‘(d) CORE PRINCIPLES FOR DIGITAL ASSET EX16 CHANGES.— 

17 ‘‘(1) COMPLIANCE WITH CORE PRINCIPLES.— 

18 ‘‘(A) IN GENERAL.—To be registered, and 

19 maintain registration, as a digital asset ex20 change, the registered digital asset exchange 

21 shall comply with— 

22 ‘‘(i) the core principles described in 

23 this subsection; and 


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1 ‘‘(ii) any requirement that the Com2 mission may impose by rule pursuant to 

3 section 8a(5). 

4 ‘‘(B) REASONABLE DISCRETION OF DIG5 ITAL ASSET EXCHANGE.—Unless otherwise de6 termined by the Commission by rule, a reg7 istered digital asset exchange described in sub8 paragraph (A) shall have reasonable discretion 

9 in establishing the manner in which the reg10 istered digital asset exchange complies with the 

11 core principles described in this subsection. 

12 ‘‘(2) COMPLIANCE WITH RULES.—A registered 

13 digital asset exchange shall— 

14 ‘‘(A) establish and enforce compliance with 

15 1 or more rules of the registered digital asset 

16 exchange, including— 

17 ‘‘(i) the terms and conditions of the 

18 trades traded or processed on or through 

19 the registered digital asset exchange; and 

20 ‘‘(ii) any limitation on access to the 

21 registered digital asset exchange; 

22 ‘‘(B) establish and enforce compliance with 

23 trading, trade processing, and participation 

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1 ity to detect, investigate, and enforce violations 

2 of those rules, including means— 

3 ‘‘(i) to provide market participants 

4 with impartial access to the market; and 

5 ‘‘(ii) to capture information that may 

6 be used in establishing whether rule viola7 tions have occurred; and 

8 ‘‘(C) establish rules governing the oper9 ation of the registered digital asset exchange, 

10 including rules specifying trading procedures to 

11 be used in entering and executing orders traded 

12 or posted on the registered digital asset ex13 change. 

14 ‘‘(3) DIGITAL ASSETS NOT READILY SUSCEP15 TIBLE TO MANIPULATION.— 

16 ‘‘(A) IN GENERAL.—A registered digital 

17 asset exchange shall permit trading only in as18 sets that are not readily susceptible to manipu19 lation. 

20 ‘‘(B) LISTING RESTRICTIONS.—A reg21 istered digital asset exchange shall not permit 

22 trading in a digital asset if it is reasonably like23 ly that— 

24 ‘‘(i) the transaction history of the dig25 ital asset can be fraudulently altered by 


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1 any person or group of persons acting col2 lectively; or 

3 ‘‘(ii) the functionality or operation of 

4 the digital asset can be materially altered 

5 by any person or group of persons under 

6 common control. 

7 ‘‘(C) CONSIDERATIONS.—In assessing a 

8 digital asset under this paragraph, a registered 

9 digital asset exchange shall consider— 

10 ‘‘(i) the purpose and use of the digital 

11 asset; 

12 ‘‘(ii) the creation or release process of 

13 the digital asset; 

14 ‘‘(iii) the consensus mechanism of the 

15 digital asset; 

16 ‘‘(iv) the governance structure of the 

17 digital asset; 

18 ‘‘(v) the participation and distribution 

19 of the digital asset; 

20 ‘‘(vi) the current and proposed 

21 functionality of the digital asset; 

22 ‘‘(vii) the legal classification of the 

23 digital asset; and 

24 ‘‘(viii) any other factor required by 

25 the Commission. 


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1 ‘‘(4) TREATMENT OF CUSTOMER ASSETS.— 

2 ‘‘(A) REQUIRED STANDARDS AND PROCE3 DURES.—A registered digital asset exchange 

4 shall establish standards and procedures that 

5 are designed to protect and ensure the safety of 

6 customer money, assets, and property. 

7 ‘‘(B) HOLDING OF CUSTOMER ASSETS.— 

8 ‘‘(i) IN GENERAL.—A registered dig9 ital asset exchange shall hold customer 

10 money, assets, and property in a manner 

11 to minimize the customer’s risk of loss of, 

12 or unreasonable delay in the access to, the 

13 money, assets, and property. 

14 ‘‘(ii) SEGREGATION OF FUNDS.— 

15 ‘‘(I) IN GENERAL.—A registered 

16 digital asset exchange shall treat and 

17 deal with all money, assets, and prop18 erty of any customer received as be19 longing to the customer. 

20 ‘‘(II) COMMINGLING PROHIB21 ITED.—Money, assets, and property of 

22 a customer described in subclause 

23 (I)— 

24 ‘‘(aa) shall be separately ac25 counted for; and 


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1 ‘‘(bb) shall not be— 

2 ‘‘(AA) commingled with 

3 the funds of the registered 

4 digital asset exchange; or 

5 ‘‘(BB) used to margin, 

6 secure, or guarantee any 

7 trades or accounts of any 

8 customer or person other 

9 than the person for whom 

10 the money, assets, or prop11 erty are held. 

12 ‘‘(iii) EXCEPTIONS.— 

13 ‘‘(I) USE OF FUNDS.— 

14 ‘‘(aa) IN GENERAL.—Not15 withstanding clause (ii), money, 

16 assets, and property of customers 

17 of a registered digital asset ex18 change may, for convenience, be 

19 commingled and deposited with 

20 an entity described in section 

21 4d(i)(1)(B). 

22 ‘‘(bb) WITHDRAWAL.—Not23 withstanding clause (ii), the 

24 share of the money, assets, and 

25 property described in item (aa) 


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1 as in the normal course of busi2 ness is necessary to margin, 

3 guarantee, secure, transfer, ad4 just, or settle a digital asset 

5 transaction with a registered en6 tity may be withdrawn and ap7 plied to those purposes, including 

8 the payment of commissions, bro9 kerage, interest, taxes, storage, 

10 and other charges, lawfully ac11 cruing in connection with the dig12 ital asset transaction. 

13 ‘‘(II) COMMISSION ACTION.— 

14 Notwithstanding clause (ii), in accord15 ance with such terms and conditions 

16 as the Commission may prescribe by 

17 rule or order, any money, assets, or 

18 property of the customers of a reg19 istered digital asset exchange may be 

20 commingled and deposited in cus21 tomer accounts with any other money, 

22 assets, or property received by the 

23 registered digital asset exchange and 

24 required by the Commission to be sep25 arately accounted for and treated and 


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1 dealt with as belonging to the cus2 tomer of the registered digital asset 

3 exchange. 

4 ‘‘(C) PERMITTED INVESTMENTS.—Money 

5 described in subparagraph (B)(ii)(I) may be in6 vested— 

7 ‘‘(i) in— 

8 ‘‘(I) obligations of the United 

9 States; 

10 ‘‘(II) general obligations of any 

11 State or of any political subdivision of 

12 a State; 

13 ‘‘(III) obligations fully guaran14 teed as to principal and interest by 

15 the United States; or 

16 ‘‘(IV) any other investment that 

17 the Commission may by rule pre18 scribe; and 

19 ‘‘(ii) in accordance with such rules 

20 and subject to such conditions as the Com21 mission may prescribe. 

22 ‘‘(D) MISUSE OF CUSTOMER PROPERTY.— 

23 It shall be unlawful— 

24 ‘‘(i) for any registered digital asset ex25 change that has received any customer 


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1 money, assets, or property for custody to 

2 dispose of, or use any of the money, assets, 

3 or property as belonging to the registered 

4 digital asset exchange; or 

5 ‘‘(ii) for any other person, including 

6 any other registered digital asset exchange 

7 or custodian that has received any cus8 tomer money, assets, or property for de9 posit, to hold, dispose of, or use any of the 

10 money, assets, or property as belonging 

11 to— 

12 ‘‘(I) the registered digital asset 

13 exchange that deposited the money, 

14 assets, or property; or 

15 ‘‘(II) any person other than the 

16 customers of the registered digital 

17 asset exchange. 

18 ‘‘(E) CUSTOMER RIGHT TO OPT OUT.— 

19 ‘‘(i) IN GENERAL.—A customer shall 

20 have the right to waive any requirement 

21 under subparagraph (B) by affirmatively 

22 electing, in writing to the registered digital 

23 asset exchange, to waive the requirement. 

24 ‘‘(ii) LIMITATIONS.—The Commission 

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1 sure requirements, segregation require2 ments, investment limitations, and other 

3 rules relating to the waiving of any re4 quirement under this paragraph that is 

5 reasonably necessary to protect customers, 

6 including eligible contract participants, 

7 non-eligible contract participants, or any 

8 other class of customers. 

9 ‘‘(5) MONITORING OF TRADING AND TRADE

10 PROCESSING.— 

11 ‘‘(A) IN GENERAL.—A registered digital 

12 asset exchange shall provide a competitive, 

13 open, and efficient market and mechanism for 

14 executing transactions that protects the price 

15 discovery process of trading on the registered 

16 digital asset exchange. 

17 ‘‘(B) PROTECTION OF MARKETS AND MAR18 KET PARTICIPANTS.—A registered digital asset 

19 exchange shall establish and enforce compliance 

20 with rules— 

21 ‘‘(i) to protect markets and market 

22 participants from abusive practices com23 mitted by any party, including abusive 

24 practices committed by a party acting as 

25 an agent for a participant; and 


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1 ‘‘(ii) to promote fair and equitable 

2 trading on the registered digital asset ex3 change. 

4 ‘‘(C) PROCEDURES AND MONITORING.—A 

5 registered digital asset exchange shall— 

6 ‘‘(i) establish and enforce compliance 

7 with rules or terms and conditions defin8 ing, or specifications detailing— 

9 ‘‘(I) trading procedures to be 

10 used in entering and executing orders 

11 traded on or through the facilities of 

12 the registered digital asset exchange; 

13 and 

14 ‘‘(II) procedures for trade proc15 essing of digital assets on or through 

16 the facilities of the registered digital 

17 asset exchange; and 

18 ‘‘(ii) monitor trading in digital assets 

19 to prevent manipulation, price distortion, 

20 and disruptions of the delivery or cash set21 tlement process through surveillance, and 

22 compliance, including methods for con23 ducting real-time monitoring of trading 

24 and comprehensive and accurate trade re25 constructions. 


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1 ‘‘(6) ABILITY TO OBTAIN INFORMATION.—A 

2 registered digital asset exchange shall— 

3 ‘‘(A) establish and enforce rules that will 

4 allow the registered digital asset exchange to 

5 obtain any necessary information to perform 

6 any of the functions described in this section; 

7 ‘‘(B) provide the information to the Com8 mission on request; and 

9 ‘‘(C) have the capacity to carry out such 

10 international information-sharing agreements as 

11 the Commission may require. 

12 ‘‘(7) EMERGENCY AUTHORITY.—A registered 

13 digital asset exchange shall adopt rules to provide 

14 for the exercise of emergency authority, in consulta15 tion or cooperation with the Commission or a reg16 istered entity, as is necessary and appropriate, in17 cluding the authority to facilitate the liquidation or 

18 transfer of open positions in any digital asset or to 

19 suspend or curtail trading in a digital asset. 

20 ‘‘(8) REPORTING REQUIREMENTS.— 

21 ‘‘(A) IN GENERAL.—A registered digital 

22 asset exchange shall provide to the Commission 

23 information that is determined by the Commis24 sion to be necessary to perform any responsi25 bility of the Commission under this Act. 


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1 ‘‘(B) TIMELY PUBLICATION OF TRADING

2 INFORMATION.— 

3 ‘‘(i) IN GENERAL.— 

4 ‘‘(I) PUBLICATION.—A registered 

5 digital asset exchange shall make pub6 lic timely information on price, trad7 ing volume, and other trading data on 

8 digital assets to the extent prescribed 

9 by the Commission. 

10 ‘‘(II) ACCESSIBILITY.—A reg11 istered digital asset exchange may 

12 make trading data freely accessible to 

13 the public under rules established by 

14 the Commission. 

15 ‘‘(ii) CAPACITY OF DIGITAL ASSET EX16 CHANGE.—A registered digital asset ex17 change shall be required to have the capac18 ity to electronically capture and transmit 

19 trade information with respect to trans20 actions executed on the registered digital 

21 asset exchange. 

22 ‘‘(9) RECORDKEEPING AND REPORTING.— 

23 ‘‘(A) IN GENERAL.—A registered digital 

24 asset exchange shall— 


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1 ‘‘(i) maintain records of all activities 

2 relating to the business of the registered 

3 digital asset exchange, including a com4 plete audit trail, in a form and manner ac5 ceptable to the Commission for a period of 

6 5 years; 

7 ‘‘(ii) report to the Commission, in a 

8 form and manner acceptable to the Com9 mission, such information as the Commis10 sion determines to be necessary or appro11 priate for the Commission to perform the 

12 duties of the Commission under this Act; 

13 and 

14 ‘‘(iii) keep any records relating to an15 cillary assets open to inspection and exam16 ination by the Securities and Exchange 

17 Commission. 

18 ‘‘(B) INFORMATION-SHARING.—Subject to 

19 section 8, and on request, the Commission shall 

20 share information collected under subparagraph 

21 (A) with— 

22 ‘‘(i) a self-regulatory organization; 

23 ‘‘(ii) the Securities and Exchange 

24 Commission; 


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1 ‘‘(iii) an appropriate Federal banking 

2 agency (as defined in section 3 of the Fed3 eral Deposit Insurance Act (12 U.S.C. 

4 1813)); 

5 ‘‘(iv) a State bank supervisor (as de6 fined in that section); 

7 ‘‘(v) a State securities or commodities 

8 regulator; 

9 ‘‘(vi) the Financial Stability Oversight 

10 Council; 

11 ‘‘(vii) the Department of Justice; and 

12 ‘‘(viii) any other person that the Com13 mission determines to be appropriate, in14 cluding— 

15 ‘‘(I) foreign financial supervisors 

16 (including foreign futures authorities); 

17 ‘‘(II) foreign central banks; and 

18 ‘‘(III) foreign ministries. 

19 ‘‘(C) CONFIDENTIALITY AGREEMENT.—Be20 fore the Commission may share information 

21 with any entity described in subparagraph (B), 

22 the Commission shall receive a written agree23 ment from each entity stating that the entity 

24 shall abide by the confidentiality requirements 

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1 tion on digital asset transactions that is pro2 vided. 

3 ‘‘(D) PROVIDING INFORMATION.—Each 

4 registered digital asset exchange shall provide 

5 to the Commission (including any designee of 

6 the Commission) information under subpara7 graph (A) in such form and at such frequency 

8 as is required by the Commission. 

9 ‘‘(10) ANTITRUST CONSIDERATIONS.—Unless 

10 necessary or appropriate to achieve the purposes of 

11 this Act, a registered digital asset exchange shall 

12 not— 

13 ‘‘(A) adopt any rules or take any actions 

14 that result in any unreasonable restraint of 

15 trade; or 

16 ‘‘(B) impose any material anticompetitive 

17 burden on trading. 

18 ‘‘(11) CONFLICTS OF INTEREST.—A registered 

19 digital asset exchange shall— 

20 ‘‘(A) establish and enforce rules to mini21 mize conflicts of interest in the decision-making 

22 process of the registered digital asset exchange; 

23 and 

24 ‘‘(B) establish a process for resolving con25 flicts of interest described in subparagraph (A). 


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1 ‘‘(12) FINANCIAL RESOURCES.— 

2 ‘‘(A) IN GENERAL.—A registered digital 

3 asset exchange shall have adequate financial, 

4 operational, and managerial resources, as deter5 mined by the Commission, to discharge each re6 sponsibility of the registered digital asset ex7 change. 

8 ‘‘(B) MINIMUM AMOUNT OF FINANCIAL RE9 SOURCES.—A registered digital asset exchange 

10 shall possess financial resources that, at a min11 imum, exceed the total amount that would en12 able the registered digital asset exchange to 

13 conduct an orderly wind-down of the activities 

14 of the registered digital asset exchange. 

15 ‘‘(C) ADDITIONAL FINANCIAL RESOURCES

16 FOR LEVERAGE TRADING.—The Commission 

17 may require such additional financial resources 

18 as are necessary to enable a registered digital 

19 asset exchange that offers margined, leveraged, 

20 or financed transactions to fulfill the customer 

21 obligations of the registered digital asset ex22 change. 

23 ‘‘(13) GOVERNANCE FITNESS STANDARDS.— 

24 ‘‘(A) GOVERNANCE ARRANGEMENTS.—A 

25 registered digital asset exchange shall establish 


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1 governance arrangements that are transparent 

2 to fulfill public interest requirements. 

3 ‘‘(B) FITNESS STANDARDS.—A registered 

4 digital asset exchange shall establish and en5 force appropriate fitness standards for— 

6 ‘‘(i) directors; 

7 ‘‘(ii) any individual or entity with di8 rect access to the settlement activities of 

9 the registered digital asset exchange; 

10 ‘‘(iii) any individual or entity with di11 rect access to any custodian affiliated with 

12 the registered digital asset exchange; 

13 ‘‘(iv) any entity offering affiliated 

14 services for the registered digital asset ex15 change; and 

16 ‘‘(v) any party affiliated with any in17 dividual or entity described in clauses (i) 

18 through (iv). 

19 ‘‘(14) SYSTEM SAFEGUARDS.—A registered dig20 ital asset exchange shall— 

21 ‘‘(A) establish and maintain a program of 

22 risk analysis and oversight to identify and mini23 mize sources of operational and security risks, 

24 through the development of appropriate controls 

25 and procedures and automated systems that— 


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1 ‘‘(i) are reliable and secure; and 

2 ‘‘(ii) have adequate scalable capacity; 

3 ‘‘(B) establish and maintain emergency 

4 procedures, backup facilities, and a plan for dis5 aster recovery that allow for— 

6 ‘‘(i) the timely recovery and resump7 tion of operations; and 

8 ‘‘(ii) the fulfillment of the responsibil9 ities and obligations of the registered dig10 ital asset exchange; and 

11 ‘‘(C) periodically conduct tests to verify 

12 that the backup resources of the registered dig13 ital asset exchange are sufficient to ensure con14 tinued— 

15 ‘‘(i) order processing and trade 

16 matching; 

17 ‘‘(ii) price reporting; 

18 ‘‘(iii) market surveillance; and 

19 ‘‘(iv) maintenance of a comprehensive 

20 and accurate audit trail. 

21 ‘‘(e) APPOINTMENT OF TRUSTEE.— 

22 ‘‘(1) IN GENERAL.—If a proceeding under sec23 tion 5e results in the suspension or revocation of the 

24 registration of a digital asset exchange, or if a dig25 ital asset exchange withdraws from registration, the 


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1 Commission, after providing notice to the digital 

2 asset exchange, may apply to the district court of 

3 the United States for the judicial district in which 

4 the digital asset exchange is located for the appoint5 ment of a trustee. 

6 ‘‘(2) ASSUMPTION OF JURISDICTION.—If the 

7 Commission applies to a court for appointment of a 

8 trustee under paragraph (1)— 

9 ‘‘(A) the court may take exclusive jurisdic10 tion over— 

11 ‘‘(i) the digital asset exchange; and 

12 ‘‘(ii) the records and assets of the dig13 ital asset exchange, wherever those records 

14 and assets are located; and 

15 ‘‘(B) if the court takes jurisdiction under 

16 subparagraph (A), the court shall appoint the 

17 Commission, or a person designated by the 

18 Commission, as trustee with power to take pos19 session and continue to operate or terminate 

20 the operations of the digital asset exchange in 

21 an orderly manner for the protection of cus22 tomers, subject to such terms and conditions as 

23 the court may prescribe. 


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1 ‘‘(f) CUSTODIAN.—A registered digital asset ex2 change shall deposit with an entity described in section 

3 4d(i)(1)(B) each digital asset that is— 

4 ‘‘(1) the property of a customer of the reg5 istered digital asset exchange; 

6 ‘‘(2) required to be held by the registered dig7 ital asset exchange under subsection (c)(2) or 

8 (d)(12); or 

9 ‘‘(3) otherwise required by the Commission to 

10 be so held to reasonably protect customers or pro11 mote the public interest. 

12 ‘‘(g) EXEMPTIONS.— 

13 ‘‘(1) IN GENERAL.—To promote responsible 

14 economic or financial innovation and fair competi15 tion, or protect customers, the Commission may ex16 empt, either unconditionally or on stated terms or 

17 conditions or for stated periods, and retroactively, 

18 prospectively, or both, a registered digital asset ex19 change from the requirements of this section, if the 

20 Commission determines that— 

21 ‘‘(A) the exemption— 

22 ‘‘(i) will be consistent with the public 

23 interest and the purposes of this Act; and 

24 ‘‘(ii) will not have a material adverse 

25 effect on the ability of the Commission or 


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1 the registered digital asset exchange to dis2 charge duties under this Act; or 

3 ‘‘(B) the registered digital asset exchange 

4 is subject to comparable, comprehensive regula5 tion by the appropriate government authorities 

6 in the home country of the registered digital 

7 asset exchange. 

8 ‘‘(2) PROCESS.—The Commission may grant an 

9 exemption under paragraph (1)— 

10 ‘‘(A) on the initiative of the Commission; 

11 or 

12 ‘‘(B) after receiving an application for the 

13 exemption by the registered digital asset ex14 change. 

15 ‘‘(h) JURISDICTION.—Notwithstanding any other 

16 provision of law, the Commission shall have exclusive ju17 risdiction over the regulation and all other activities of a 

18 registered digital asset exchange. 

19 ‘‘(i) IMPLEMENTATION.—The Commission may pre20 scribe rules to implement this section.’’. 

21 (b) CERTAIN DIGITAL ASSET EXCHANGE FUNCTIONS

22 NOT SUFFICIENT TO TRIGGER REQUIREMENT TO REG23 ISTER AS FUTURES COMMISSION MERCHANT.—Section 

24 4f(c) of the Commodity Exchange Act (7 U.S.C. 6f(c)) 

25 is amended by adding at the end the following: 


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1 ‘‘(12) CLARIFICATION OF SCOPE OF REGISTRATION

2 REQUIREMENT.—A registered digital asset exchange shall 

3 not be required to register as a futures commission mer4 chant for any activity for which the registered digital asset 

5 exchange is regulated under section 5i.’’. 

6 SEC. 405. VIOLATIONS. 

7 Section 9 of the Commodity Exchange Act (7 U.S.C. 

8 13) is amended— 

9 (1) in subsection (a)(2), by striking ‘‘subsection 

10 4c’’ and inserting ‘‘section 4c’’; and 

11 (2) in subsection (e)— 

12 (A) in paragraph (1), by inserting ‘‘con13 tracts for the sale of digital assets,’’ after ‘‘op14 tions thereon,’’; and 

15 (B) in paragraph (2), by inserting ‘‘or con16 tracts for the sale of digital assets’’ after ‘‘op17 tions thereon’’. 

18 SEC. 406. MARKET REPORTS. 

19 Section 16(a) of the Commodity Exchange Act (7 

20 U.S.C. 20(a)) is amended— 

21 (1) in the first sentence, by striking ‘‘which are 

22 the subject of futures contracts,’’ and inserting 

23 ‘‘under the jurisdiction of the Commission,’’; and 


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1 (2) in the second sentence, by striking ‘‘futures 

2 markets.’’ and inserting ‘‘markets under the juris3 diction of the Commission.’’. 

4 SEC. 407. BANKRUPTCY TREATMENT OF DIGITAL ASSETS. 

5 (a) IN GENERAL.—Section 20(a) of the Commodity 

6 Exchange Act (7 U.S.C. 24(a)) is amended in paragraphs 

7 (1) and (2) by inserting ‘‘digital assets,’’ after ‘‘securi8 ties,’’ each place it appears. 

9 (b) COMMODITY BROKER DEFINITION.—Section 

10 101(6) of title 11, United States Code, is amended by in11 serting ‘‘registered digital asset exchange, as defined in 

12 section 1a of the Commodity Exchange Act,’’ before ‘‘for13 eign’’. 

14 (c) COMMODITIES CONTRACTS.—Section 556 of title 

15 11, United States Code, is amended by inserting ‘‘a reg16 istered digital asset exchange, as defined in section 1a of 

17 the Commodity Exchange Act,’’ before ‘‘a contract’’. 

18 (d) CONTRACTUAL RIGHTS.—Section 561 of title 11, 

19 United States Code, is amended by inserting ‘‘registered 

20 digital asset exchange, as defined in section 1a of the 

21 Commodity Exchange Act,’’ after ‘‘designated under the 

22 Commodity Exchange Act’’ each place it appears. 

23 (e) DEFINITIONS.—Section 761 of title 11, United 

24 States Code, is amended— 

25 (1) in paragraph (4)— 


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1 (A) in subparagraph (A), by inserting 

2 ‘‘digital asset or a’’ before ‘‘commodity’’; 

3 (B) in subparagraph (I), by striking ‘‘or’’ 

4 at the end; 

5 (C) in subparagraph (J), by adding ‘‘or’’ 

6 at the end; and 

7 (D) by adding at the end the following: 

8 ‘‘(K) a contract for the sale of a digital 

9 asset by a registered digital asset exchange;’’; 

10 and 

11 (2) in paragraph (10)— 

12 (A) in the matter preceding subparagraph 

13 (A)— 

14 (i) by inserting ‘‘a digital asset,’’ after 

15 ‘‘a security,’’; and 

16 (ii) by inserting ‘‘digital asset,’’ after 

17 ‘‘cash, security,’’; 

18 (B) in subparagraph (A)— 

19 (i) in clause (vi), by inserting ‘‘a dig20 ital asset,’’ after ‘‘a security,’’; and 

21 (ii) in clause (vii)— 

22 (I) by inserting ‘‘or a digital 

23 asset’’ before ‘‘held as property’’; 

24 (II) by inserting ‘‘or digital 

25 asset’’ after ‘‘such security’’; and 


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1 (III) by inserting ‘‘or digital 

2 asset’’ after ‘‘based on a security’’; 

3 and 

4 (C) in subparagraph (B)— 

5 (i) by striking ‘‘not including prop6 erty’’ and inserting ‘‘not including— 

7 ‘‘(i) property’’; 

8 (ii) in clause (i), as so designated, by 

9 adding ‘‘and’’ at the end; and 

10 (iii) by adding at the end the fol11 lowing: 

12 ‘‘(ii) money, assets, or property with 

13 respect to which any requirement under 

14 subsection (i) of section 4d of the Com15 modity Exchange Act (7 U.S.C. 6d) is 

16 waived pursuant to paragraph (3) of that 

17 subsection, or any requirement under sub18 paragraph (B) of paragraph (4) of section 

19 5i(d) of that Act is waived pursuant to 

20 subparagraph (E) of that paragraph;’’. 

21 (f) VOIDABLE TRANSFERS.—Section 764(b)(1) of 

22 title 11, United States Code, is amended by inserting ‘‘, 

23 digital assets’’ before ‘‘, or other property’’. 

24 (g) TREATMENT OF CUSTOMER PROPERTY.—Section 

25 766 of title 11, United States Code, is amended— 


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1 (1) in subsection (b)(1), by striking ‘‘physical 

2 commodity underlying’’ and inserting ‘‘commodity 

3 underlying’’; 

4 (2) in subsection (c), by inserting ‘‘digital 

5 asset,’’ before ‘‘or commodity contract’’ each place 

6 the term appears; 

7 (3) in subsection (d), by inserting ‘‘digital 

8 asset,’’ before ‘‘or commodity contract’’ each place 

9 the term appears; 

10 (4) in subsection (f)— 

11 (A) in striking ‘‘and other property’’ and 

12 inserting ‘‘digital assets, and other property’’; 

13 and 

14 (B) by striking ‘‘or property’’ and insert15 ing ‘‘, digital assets, or property’’; 

16 (5) in subsection (g), by striking ‘‘security or 

17 property’’ and inserting ‘‘security, digital asset, or 

18 property’’; and 

19 (6) in subsection (h)(2), by inserting ‘‘digital 

20 assets,’’ after ‘‘customer securities,’’. 

21 SEC. 408. IDENTIFIED BANKING PRODUCTS. 

22 Section 206(a) of the Gramm-Leach-Bliley Act (15 

23 U.S.C. 78c note) is amended— 

24 (1) in paragraph (5)(B)(ii), by striking ‘‘or’’ at 

25 the end; 


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1 (2) in paragraph (6), by striking the period at 

2 the end and inserting ‘‘; or’’; and 

3 (3) by adding at the end the following: 

4 ‘‘(7) a payment stablecoin issued by a deposi5 tory institution under section 722A.’’. 

6 SEC. 409. FINANCIAL INSTITUTIONS DEFINITION. 

7 Section 5312(c)(1) of title 31, United States Code, 

8 is amended by adding at the end the following: 

9 ‘‘(B) A registered digital asset exchange, 

10 as defined in section 1a of the Commodity Ex11 change Act.’’. 

12 SEC. 410. OFFSETTING THE COSTS OF DIGITAL ASSET REG13 ULATION. 

14 The Commodity Exchange Act (7 U.S.C. 1 et seq.) 

15 is amended by adding at the end the following: 

16 ‘‘SEC. 24. OFFSETTING THE COSTS OF DIGITAL ASSET REG17 ULATION. 

18 ‘‘(a) RECOVERY OF CERTAIN COSTS OF ANNUAL AP19 PROPRIATION.— 

20 ‘‘(1) IN GENERAL.—Effective beginning Octo21 ber 1, 2023, the Commission may, by rule, collect 

22 fees— 

23 ‘‘(A) to fund expenses relating to regula24 tion of digital asset cash and spot markets; and 


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1 ‘‘(B) that are designed to recover the costs 

2 to the Federal Government of the annual ap3 propriation to the Commission by Congress. 

4 ‘‘(2) REGISTERED ENTITIES.—Fees under 

5 paragraph (1) shall only be imposed— 

6 ‘‘(A) on registered entities engaged in cash 

7 or spot digital asset activities; and 

8 ‘‘(B) in relation to the regulation of those 

9 activities under this Act. 

10 ‘‘(3) FEE RATES.—Fees under paragraph (1) 

11 shall— 

12 ‘‘(A) be strictly related to the cost to the 

13 Commission of the regulation of digital asset 

14 cash and spot markets; 

15 ‘‘(B) be reduced for newly registered enti16 ties with less than $100,000,000 in daily trad17 ing volume; and 

18 ‘‘(C)(i) minimize negative impacts on mar19 ket liquidity; and 

20 ‘‘(ii) maintain the efficiency, competitive21 ness, and financial integrity of digital asset 

22 markets. 

23 ‘‘(4) COLLECTION OF FEES.—The Commission 

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1 ner and within such time as may be specified by the 

2 Commission by rule. 

3 ‘‘(b) FEE RATE ORDERS.— 

4 ‘‘(1) IN GENERAL.—Not later than 60 days 

5 after the date on which a law providing a regular 

6 appropriation to the Commission for a fiscal year is 

7 enacted, the Commission shall adopt an order set8 ting rates for fees to be collected under subsection 

9 (a) for that fiscal year. 

10 ‘‘(2) PUBLICATION.—The Commission shall 

11 publish in the Federal Register the order adopted 

12 under paragraph (1), including— 

13 ‘‘(A) projections on which the fees are 

14 based; and 

15 ‘‘(B) an explanation of the method used 

16 for calculating applicable fee rates. 

17 ‘‘(c) DEPOSIT OF FEES.— 

18 ‘‘(1) OFFSETTING COLLECTIONS.—Fees col19 lected under subsection (a) for any fiscal year— 

20 ‘‘(A) shall be deposited and credited as off21 setting collections to the account providing ap22 propriations to the Commission; and 

23 ‘‘(B) shall not be collected or available for 

24 obligation for any fiscal year except to the ex25 tent provided in advance in appropriation Acts. 


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1 ‘‘(2) GENERAL REVENUES PROHIBITED.—No 

2 fees collected under subsection (a) shall be deposited 

3 and credited as general revenue of the Treasury. 

4 ‘‘(d) LAPSE OF APPROPRIATIONS.—If a regular ap5 propriation to the Commission has not been enacted on 

6 the first day of a fiscal year, the Commission shall con7 tinue to collect fees under this section at the rates in effect 

8 on September 30 of the preceding fiscal year. 

9 ‘‘(e) LIMITATIONS.— 

10 ‘‘(1) LEVERAGED, MARGINED, OR FINANCED

11 TRANSACTIONS.—Nothing in this section authorizes 

12 the imposition of fees on a registered entity relating 

13 to leveraged, margined, or financed transactions 

14 under this Act, including those activities relating to 

15 digital assets. 

16 ‘‘(2) OTHER APPROPRIATIONS.—Notwith17 standing any other provision of law, the Commission 

18 may use appropriations otherwise made available by 

19 law to fund expenses relating to the regulation of 

20 digital asset cash and spot markets. 

21 ‘‘(f) CEILING ON FEES.—Unless otherwise provided 

22 by law, fees collected under this section shall not exceed 

23 $30,000,000. 

24 ‘‘(g) AUTHORIZATION REQUIRED.—The authority 

25 under this section to impose and collect fees shall only be 


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1 in effect during a period that a legislative authorization 

2 of the Commission is in effect, as otherwise provided by 

3 law.’’. 

4 TITLE V—RESPONSIBLE 

5 CONSUMER PROTECTION 

6 SEC. 501. RESPONSIBLE CONSUMER PROTECTION. 

7 Chapter 98 of title 31, United States Code, as added 

8 by section 101(a) of this Act, is amended by adding at 

9 the end the following: 

10 ‘‘§ 9802. Consumer protection standards for digital 

11 assets 

12 ‘‘(a) IN GENERAL.—A person or protocol that pro13 vides digital asset services shall ensure that the scope of 

14 permissible transactions that may be undertaken with cus15 tomer digital assets is disclosed clearly in a customer 

16 agreement. 

17 ‘‘(b) NOTICE.—A person who provides digital asset 

18 services shall provide clear notice to each customer, and 

19 require acknowledgment, of the following: 

20 ‘‘(1) Prior to the implementation of any up21 dates, material source code version changes relating 

22 to digital assets, except in emergencies, which may 

23 include security vulnerabilities. 


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1 ‘‘(2) Whether customer digital assets are seg2 regated from other customer assets and the manner 

3 of segregation. 

4 ‘‘(3) How the assets of the customer would be 

5 treated in a bankruptcy or insolvency scenario and 

6 the risks of loss. 

7 ‘‘(4) The time period and manner in which the 

8 person is obligated to return the digital asset of the 

9 customer upon the request of the customer. 

10 ‘‘(5) Applicable fees. 

11 ‘‘(6) The dispute resolution process of the per12 son. 

13 ‘‘(c) SUBSIDIARY PROCEEDS.— 

14 ‘‘(1) DEFINITIONS.—In this subsection: 

15 ‘‘(A) SUBSIDIARY PROCEEDS.—The term 

16 ‘subsidiary proceeds’ includes forks, airdrops, 

17 staking, and other gains that accrue to a digital 

18 asset through market transactions, use as a fi19 nancial asset, or being held in custody or safe20 keeping by a person who provides digital asset 

21 services. 

22 ‘‘(B) TERMS OF SERVICE.—The term 

23 ‘agreement’ includes the standard terms of 

24 service of the person who provides digital asset 

25 services. 


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1 ‘‘(2) ACCRUAL TO CUSTOMER.—Except as oth2 erwise specified by an agreement with a customer, 

3 all ancillary or subsidiary proceeds relating to digital 

4 asset services provided to a customer shall accrue to 

5 the benefit of the customer in accordance with para6 graph (3). 

7 ‘‘(3) ELECTION.—A person who provides digital 

8 asset services may elect not to collect certain sub9 sidiary proceeds if the election is disclosed in an 

10 agreement with the customer. 

11 ‘‘(4) WITHDRAWAL.—A customer may withdraw 

12 digital assets in a method that permits the collection 

13 of the subsidiary proceeds. 

14 ‘‘(5) AGREEMENT.—A person who provides dig15 ital asset services shall enter into an agreement with 

16 a customer, if desired by the customer, regarding 

17 the manner in which to invest subsidiary proceeds or 

18 other gains attributable to the digital assets of the 

19 customer. 

20 ‘‘(d) LENDING ARRANGEMENTS.—A person who pro21 vides digital asset services shall ensure any lending ar22 rangements relating to digital assets are— 

23 ‘‘(1) clearly disclosed to customers before any 

24 lending services take place; 


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1 ‘‘(2) subject to the affirmative consent of the 

2 customer; 

3 ‘‘(3) fully enforceable as a matter of commercial 

4 law; 

5 ‘‘(4) accompanied by full disclosures of applica6 ble terms and risks, yield, and the manner in which 

7 the yield is calculated; 

8 ‘‘(5) accompanied by appropriate disclosures re9 lating to collateral requirements and policies, includ10 ing— 

11 ‘‘(A) haircuts and overcollateralization re12 quirements; 

13 ‘‘(B) collateral the person accepts when 

14 calling for additional collateral from a cus15 tomer, including collateral substitution; 

16 ‘‘(C) whether customer collateral is com17 mingled with the collateral of other customers 

18 or of the person; and 

19 ‘‘(D) how customer collateral is invested, 

20 and whether the yield belongs to the customer 

21 or to the person; 

22 ‘‘(6) accompanied by disclosures of mark-to23 market and monitoring arrangements, including— 


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1 ‘‘(A) the frequency of mark-to-market 

2 monitoring and how frequently the person will 

3 call for additional collateral from a customer; 

4 ‘‘(B) the time period in which the customer 

5 must supply additional collateral to the person 

6 after a collateral call; and 

7 ‘‘(C) whether the person permits failures 

8 to deliver such collateral, and in the event of a 

9 failure to deliver the period of time in which the 

10 customer must cure the failure to deliver before 

11 the customer’s position is closed; and 

12 ‘‘(7) compliant with all applicable Federal and 

13 State laws. 

14 ‘‘(e) REHYPOTHECATION.— 

15 ‘‘(1) DEFINITION.—In this subsection, the term 

16 ‘rehypothecation’ means the pledging of an asset as 

17 collateral for a financial transaction by a person 

18 after the pledging of the asset as collateral by a cus19 tomer of that person. 

20 ‘‘(2) REHYPOTHECATION.—Before rehypoth21 ecating a digital asset, a person who provides digital 

22 asset services to a customer shall clearly disclose 

23 policies on rehypothecation to customers, including a 

24 clear definition of rehypothecation that is accessible 

25 to consumers. The person who provides digital asset 


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1 services to a customer shall obtain affirmative con2 sent and consider the following factors to appro3 priately mitigate risk relating to rehypothecation: 

4 ‘‘(A) The liquidity and volatility of a dig5 ital asset. 

6 ‘‘(B) Past failures to deliver a particular 

7 digital asset. 

8 ‘‘(C) Concentration risk. 

9 ‘‘(D) Whether an issuer or lender of last 

10 resort relating to a digital asset exists, includ11 ing for virtual currency with a finite supply. 

12 ‘‘(E) The capital, leverage and market po13 sition of the person. 

14 ‘‘(F) The legal obligations of the person to 

15 customers and other persons in the market who 

16 provide digital asset services.’’. 

17 SEC. 502. SOURCE CODE VERSION OF DIGITAL ASSETS. 

18 Chapter 98 of title 31, United States Code, as 

19 amended by section 501 of this Act, is amended by adding 

20 at the end the following: 

21 ‘‘§ 9803. Source code version of digital assets 

22 ‘‘(a) IN GENERAL.—A customer and a person who 

23 provides digital asset services shall, at the initiation of a 

24 contractual relationship, agree in writing regarding the 

25 source code version the person will use for each digital 


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1 asset and the treatment of each asset under the law, in2 cluding securities and commodities laws and the Uniform 

3 Commercial Code applicable to the transaction. 

4 ‘‘(b) DETERMINATION.—A person who provides dig5 ital asset services— 

6 ‘‘(1) may periodically determine whether to im7 plement a source code version that uses validation 

8 rules different than those of the source code version 

9 specified in a customer agreement, including in cir10 cumstances where it is not possible to predict in ad11 vance whether utilization of the different source code 

12 version will be in the best interests of the customer; 

13 ‘‘(2) shall consider the nature of proposed 

14 changes to source code versions with potential ef15 fects resulting from third-party actors that may cre16 ate different source code versions resulting in new 

17 networks that could create economic value for cus18 tomers; 

19 ‘‘(3) shall not be required to support digital as20 sets and source code versions that the person has 

21 not entered into an agreement with customers to 

22 support; and 

23 ‘‘(4) shall not capriciously redefine a digital 

24 asset or the corresponding source code or alter cus25 tomer agreements with respect to this subsection. 


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1 ‘‘(c) STANDARDS.—A person who provides digital 

2 asset services— 

3 ‘‘(1) shall adopt and maintain standards for 

4 changes to digital asset source code versions that 

5 use differing validation rules than those of the 

6 source code version specified in the customer agree7 ment, which shall include customer notice and ap8 proval, as appropriate based on the circumstances; 

9 and 

10 ‘‘(2) may specify differing standards based on 

11 source code changes which occur as the result of 

12 emergencies, including security vulnerabilities.’’. 

13 SEC. 503. SETTLEMENT FINALITY. 

14 Chapter 98 of title 31, United States Code, as 

15 amended by section 502 of this Act, is amended by adding 

16 at the end the following: 

17 ‘‘§ 9804. Settlement finality 

18 ‘‘To promote legal certainty and customer protection, 

19 a person who provides digital asset services and a cus20 tomer shall agree on the terms of settlement finality for 

21 all transactions, including the following: 

22 ‘‘(1) The conditions under which a digital asset 

23 may be deemed fully transferred, provided that these 

24 legal conditions may diverge from operational condi25 tions under which digital assets are considered 


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1 transferred, based on the distributed and prob2 abilistic nature of digital assets. 

3 ‘‘(2) The exact moment of transfer of a digital 

4 asset. 

5 ‘‘(3) The discharge of any obligations upon 

6 transfer of a digital asset. 

7 ‘‘(4) Conformity to applicable provisions of the 

8 Uniform Commercial Code.’’. 

9 SEC. 504. NOTICE TO CUSTOMERS; ENFORCEMENT. 

10 Chapter 98 of title 31, United States Code, as 

11 amended by section 503 of this Act, is amended by adding 

12 at the end the following: 

13 ‘‘§ 9805. Notice to customers; enforcement 

14 ‘‘(a) IN GENERAL.—In providing disclosures and car15 rying out other duties under this chapter, a person who 

16 provides digital asset services in or affecting interstate 

17 commerce shall have a duty to provide higher standards 

18 of customer notice and acknowledgment if there is likely 

19 to be a material impact on the economic value of the dig20 ital asset of a customer. 

21 ‘‘(b) ENFORCEMENT OF STANDARDS.—The stand22 ards under this chapter shall be enforced in an appropriate 

23 manner, commensurate with other customer protection 

24 standards— 


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1 ‘‘(1) in the case of a digital asset intermediary, 

2 by the Federal or State licensing, registration, or 

3 chartering authority of the intermediary; and 

4 ‘‘(2) in the case of a depository institution or 

5 other financial institution, by the appropriate State 

6 or Federal banking supervisor.’’. 

7 SEC. 505. RIGHT TO INDIVIDUAL MANAGEMENT OF DIGITAL 

8 ASSETS. 

9 Chapter 98 of title 31, United States Code, as 

10 amended by section 504 of this Act, is amended by adding 

11 at the end the following: 

12 ‘‘§ 9806. Right to individual management of digital as13 sets 

14 ‘‘(a) IN GENERAL.—Except as otherwise required by 

15 law, no person shall be required to use an intermediary 

16 for the safekeeping of digital assets legally owned, and 

17 possessed or controlled, by that person. 

18 ‘‘(b) RULE OF CONSTRUCTION.—This section shall 

19 not be construed to— 

20 ‘‘(1) permit a person to engage in market activ21 ity for which authorization is required under Federal 

22 or State law; or 

23 ‘‘(2) restrict a person from freely entering into 

24 an agreement for digital asset services with a third 

25 party.’’. 


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1 SEC. 506. TECHNICAL AND CONFORMING AMENDMENTS. 

2 The table of sections of chapter 98, as added by sec3 tion 101(a) of this Act, is amended by adding at the end 

4 the following: 

‘‘9802. Consumer protection standards for digital assets. 

‘‘9803. Source code version of digital assets. 

‘‘9804. Settlement finality. 

‘‘9805. Notice to customers; enforcement. 

‘‘9806. Right to individual management of digital assets.’’. 

5 TITLE VI—RESPONSIBLE 

6 PAYMENTS INNOVATION 

7 SEC. 601. ISSUANCE OF PAYMENT STABLECOINS. 

8 Subtitle C of title VII of the Gramm-Leach-Bliley Act 

9 (Public Law 106–102; 113 Stat. 1470) is amended by 

10 adding at the end the following: 

11 ‘‘SEC. 722A. ISSUANCE OF PAYMENT STABLECOINS. 

12 ‘‘(a) IN GENERAL.—A depository institution may 

13 issue, redeem, and conduct all incidental activities relating 

14 to payment stablecoins in accordance with this section. 

15 ‘‘(b) REQUIRED PAYMENT STABLECOIN ASSETS.—A 

16 depository institution shall maintain high-quality liquid 

17 assets under this section equal to not less than 100 per18 cent of the face amount of the liabilities of the institution 

19 on payment stablecoins issued by the institution. In the 

20 case of an insured depository institution described in sub21 section (m)(1)(A) that engages in on-balance sheet lending 

22 activities, assets under this subsection shall equal not less 

23 than 100 percent of the face amount of the liabilities of 


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1 the institution on payment stablecoins issued by the insti2 tution, with the assets held in balances at a Federal Re3 serve bank (which may include a segregated balance ac4 count), or, in the case of foreign withdrawable reserves, 

5 at a foreign central bank, in a special, custodial, or trust 

6 account, other off-balance sheet account, or in another 

7 equivalent manner that ensures the segregation of the as8 sets in the event of receivership. An insured depository 

9 institution may segregate the issuance and management 

10 of payment stablecoins into a separate depository institu11 tion affiliate under the same holding company structure. 

12 Eligible high-quality liquid assets under this section shall 

13 be comprised of the following: 

14 ‘‘(1) United States coins and currency and any 

15 other instrument that is legal tender, as defined in 

16 section 5103 of title 31, United States Code. 

17 ‘‘(2) Demand deposits at a depository institu18 tion, except that deposits in an insured depository 

19 institution shall not exceed the limit of deposit or 

20 share insurance available for that account, which 

21 may include pass through insurance, or shall be 

22 maintained in a special, custodial, or trust account 

23 or other off-balance sheet account held by the in24 sured depository institution. 


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1 ‘‘(3) Balances held at a Federal Reserve bank, 

2 which may be held in a master account or seg3 regated balance account. 

4 ‘‘(4) Foreign withdrawable reserves, as defined 

5 in section 249.3 of title 12, Code of Federal Regula6 tions, consistent with any foreign unit of account in 

7 which the payment stablecoin is denominated or 

8 pegged. 

9 ‘‘(5) A security that is issued by, or uncondi10 tionally guaranteed as to the timely payment of prin11 cipal and interest by, the Department of the Treas12 ury, with an original maturity of 1 year or less. 

13 ‘‘(6) A reserve repurchase agreement relating to 

14 a security described in paragraph (5). 

15 ‘‘(7) Any other high-quality, liquid asset deter16 mined to be consistent with safe and sound banking 

17 practices, as determined by the appropriate Federal 

18 banking agency or State bank supervisor. 

19 ‘‘(c) DISCLOSURES.—Not later than 10 business days 

20 after the end of each month, a depository institution shall 

21 disclose, in a publicly accessible manner, a summary de22 scription of the assets backing the payment stablecoin, the 

23 value of the assets, and the number of outstanding pay24 ment stablecoins, as of the last day of the month. Such 

25 explanation shall be filed with the appropriate Federal 


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1 banking agency or State bank supervisor under penalty 

2 of perjury by the chief financial officer of the institution. 

3 The depository institution shall also report on the sum4 mary description any instances in which the institution 

5 failed to comply with any requirement of subsection (b). 

6 As applicable, the appropriate Federal banking agency or 

7 State bank supervisor shall, as part of a regular examina8 tion of the depository institution, at the frequency other9 wise required by law, verify the composition of the assets 

10 and the accuracy of the summary descriptions made under 

11 this subsection and reports under subsection (d). 

12 ‘‘(d) CALL REPORT.—As applicable, the appropriate 

13 Federal banking agency or State bank supervisor shall re14 quire a depository institution that issues a payment 

15 stablecoin to report, in detail, on the composition of the 

16 assets in each periodic report of condition, or in an alter17 native format approved by the Federal Financial Institu18 tions Examination Council, at the frequency otherwise re19 quired by law. 

20 ‘‘(e) PERMISSION.—A depository institution shall, as 

21 applicable, obtain permission from the appropriate Fed22 eral banking agency or State bank supervisor, with an ap23 plication submitted not less than 6 months before intended 

24 issuance of the payment stablecoin, but which may be sub25 mitted as part of a charter application. As part of an apVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00109 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 plication under this section, a depository institution shall 

2 develop a tailored recovery and resolution plan, consistent 

3 with the standards adopted under subsection (k)(1)(F), 

4 that would permit the orderly resumption of a safe and 

5 sound operation or the orderly wind-down of operations 

6 in the event of distress, including the redemption of all 

7 outstanding payment stablecoins. The application shall 

8 also contain a draft customer agreement, flow of funds 

9 explanation, a robust information technology plan and 

10 operational design of the payment stablecoin. As applica11 ble, the appropriate Federal banking agency or State bank 

12 supervisor shall render a decision on the application within 

13 4 months of the date of filing, and shall approve the appli14 cation unless— 

15 ‘‘(1) the payment stablecoin activities are not 

16 likely to be able to operate in a safe and sound man17 ner; 

18 ‘‘(2) the depository institution does not have 

19 the required resources and expertise to manage the 

20 operation of the payment stablecoin, commensurate 

21 with the size and scale of projected operations; or 

22 ‘‘(3) the depository institution does not have re23 quired policies and procedures relating to material 

24 areas of the operation of the payment stablecoin ac25 tivities. 


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1 ‘‘(f) REDEMPTION OF PAYMENT STABLECOINS.— 

2 Upon the demand of a customer, a depository institution 

3 shall redeem an outstanding payment stablecoin at par in 

4 the coins, currency, or other instruments that are legal 

5 tender, as defined in section 5103 of title 31, United 

6 States Code, or the similar laws of the jurisdiction of the 

7 unit of account in which the payment stablecoin is denomi8 nated or to which the value of the payment stablecoin is 

9 pegged. A depository institution may redeem a payment 

10 stablecoin issued by another depository institution at par, 

11 upon demand. The Board of Governors of the Federal Re12 serve System, through the Federal Reserve banks, shall 

13 provide for the clearing and settlement of payment 

14 stablecoin liabilities among depository institutions under 

15 this section and shall ensure competitive equality in all 

16 clearing, settlement and related services. A depository in17 stitution shall also assess its ability to fulfill large redemp18 tions without placing downward pressure on the market 

19 value of the payment stablecoin. 

20 ‘‘(g) COLLATERAL AVAILABILITY IN THE CAPITAL

21 MARKETS.—The appropriate Federal banking agencies, in 

22 consultation with State bank supervisors, the Securities 

23 and Exchange Commission, and Commodity Futures 

24 Trading Commission, shall monitor use of the high-quality 

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1 pact on collateral availability and the efficient functioning 

2 of the capital markets. 

3 ‘‘(h) RECEIVERSHIP PRIORITY.—In the event of the 

4 receivership of a depository institution that has issued a 

5 payment stablecoin under this section, a person that has 

6 a valid claim on a payment stablecoin issued by that insti7 tution shall have priority over all other claims on the insti8 tution with respect to any required payment stablecoin as9 sets, including claims with respect to insured deposits, 

10 other than administrative costs incurred by the appro11 priate Federal banking agency or State bank supervisor, 

12 as applicable, relating to the receivership of the institu13 tion, if applicable. Consistent with subsection (f), a deposi14 tory institution that redeems a payment stablecoin issued 

15 by a depository institution in receivership shall be consid16 ered to have a valid claim, with corresponding priority 

17 under this subsection, on a payment stablecoin issued by 

18 the institution in receivership. 

19 ‘‘(i) INCIDENTAL ACTIVITIES.—A depository institu20 tion may conduct all incidental activities relating to the 

21 issuance and redemption of payment stablecoins, which 

22 shall include the following: 

23 ‘‘(1) Management of required payment 

24 stablecoin assets in accordance with subsection (b). 

25 ‘‘(2) Making a market in payment stablecoins. 


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1 ‘‘(3) Custodial services. 

2 ‘‘(4) Settlement and clearing. 

3 ‘‘(5) Post-trade services. 

4 ‘‘(6) All other activities consistent with a safe 

5 and sound operation, as determined by the appro6 priate Federal banking agency or State bank super7 visor. 

8 ‘‘(j) APPLICABILITY OF GRAMM-LEACH-BLILEY

9 DATA PRIVACY PROVISIONS.—Title V of the Gramm10 Leach-Bliley Act (12 U.S.C. 6801 et seq.) shall apply to 

11 the payment stablecoin activities of a depository institu12 tion under this section. 

13 ‘‘(k) RULES.— 

14 ‘‘(1) IN GENERAL.—The appropriate Federal 

15 banking agencies, in consultation with State bank 

16 supervisors, shall adopt rules to implement this sec17 tion, including— 

18 ‘‘(A) capital treatment for depository insti19 tutions described in subsection (m)(1) in ac20 cordance with paragraph (2); 

21 ‘‘(B) liquidity, leverage, and interest rate 

22 risk; 

23 ‘‘(C) third-party service provider activi24 ties— 


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1 ‘‘(i) including custodial wallet pro2 viders; and 

3 ‘‘(ii) not including licensing or capital 

4 requirements for third-party service pro5 viders; 

6 ‘‘(D) management practices with respect to 

7 required payment stablecoin assets; 

8 ‘‘(E) appropriate operational, compliance, 

9 and information technology risk management; 

10 ‘‘(F) tailored recovery and resolution 

11 standards relating to payment stablecoins; and 

12 ‘‘(G) any other material topic. 

13 ‘‘(2) SIGNIFICANT DIFFERENCES.—In accord14 ance with section 5169(c)(3)(A) of the Revised Stat15 utes, in determining capital and leverage require16 ments applicable to a depository institution that has 

17 no material assets other than required payment 

18 stablecoin assets under this section— 

19 ‘‘(A) the depository institution shall not be 

20 subject to section 171 of the Financial Stability 

21 Act of 2010 (12 U.S.C. 5371); and 

22 ‘‘(B) the appropriate Federal banking 

23 agencies shall take into account the significant 

24 differences between the risks of the assets of 

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1 tions with assets that consist primarily of com2 mercial or consumer loans. 

3 ‘‘(l) NON-DEPOSITORY INSTITUTION PAYMENT

4 STABLECOIN ISSUERS.—Nothing in this section shall be 

5 construed to prohibit an entity operating under a State 

6 or Federal charter or license that is not a depository insti7 tution from issuing and redeeming a payment stablecoin 

8 and conducting all activities related to the management 

9 of such payment stablecoin consistent with a safe and 

10 sound operation, as determined by the appropriate regu11 lator of the entity. The entity shall— 

12 ‘‘(1) be subject to the requirements of sub13 sections (b) and (c); and 

14 ‘‘(2) redeem an outstanding payment stablecoin 

15 at par in the coins, currency, or other instruments 

16 that are legal tender, as defined in section 5103, or 

17 the similar laws of the jurisdiction of the unit of ac18 count in which the payment stablecoin is denomi19 nated or to which the value of the payment 

20 stablecoin is pegged. 

21 ‘‘(m) DEFINITIONS.—In this section: 

22 ‘‘(1) DEPOSITORY INSTITUTION.—The term ‘de23 pository institution’ has the meaning given the term 

24 in section 19(b)(1) of the Federal Reserve Act (12 

25 U.S.C. 461(b)(1)) and includes— 


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1 ‘‘(A) an insured depository institution; or 

2 ‘‘(B) a depository institution operating 

3 under subsection (c) of section 5169 of the Re4 vised Statutes (12 U.S.C. 27), or a substan5 tially similar State law, which is exclusively en6 gaged in issuing payment stablecoins, providing 

7 safekeeping, trust or custodial services, or ac8 tivities incidental to the foregoing. 

9 ‘‘(2) PAYMENT STABLECOIN.—The term ‘pay10 ment stablecoin’ has the meaning given the term in 

11 section 9801 of title 31, United States Code. 

12 ‘‘(3) SEGREGATED BALANCE ACCOUNT.—The 

13 term ‘segregated balance account’ includes an ac14 count of a depository institution with a Federal Re15 serve bank or a foreign central bank to which only 

16 required payment stablecoin assets are credited.’’. 

17 SEC. 602. SANCTIONS COMPLIANCE RESPONSIBILITIES OF 

18 PAYMENT STABLECOIN ISSUERS. 

19 Not later than 120 days after the date of the enact20 ment of this Act, the Secretary of the Treasury shall adopt 

21 final guidance clarifying the sanctions compliance respon22 sibilities and liability of an issuer of a payment stablecoin 

23 with respect to downstream transactions relating to the 

24 stablecoin that take place after the stablecoin is first pro25 vided to a customer of the issuer. 


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1 SEC. 603. USE OF THE OFFICIAL DIGITAL CURRENCY OF 

2 THE PEOPLE’S REPUBLIC OF CHINA ON GOV3 ERNMENT DEVICES. 

4 (a) DEFINITIONS.—In this section— 

5 (1) the term ‘‘digital yuan’’ means the official 

6 central bank digital currency of the People’s Repub7 lic of China; 

8 (2) the term ‘‘executive agency’’ has the mean9 ing given that term in section 133 of title 41, United 

10 States Code; and 

11 (3) the term ‘‘information technology’’ has the 

12 meaning given that term in section 11101 of title 

13 40, United States Code. 

14 (b) USE OF DIGITAL YUAN.—Not later than 60 days 

15 after the date of enactment of this Act, the Director of 

16 the Office of Management and Budget, in consultation 

17 with the Administrator of General Services, the Director 

18 of the Cybersecurity and Infrastructure Security Agency, 

19 the Director of National Intelligence, and the Secretary 

20 of Defense, and consistent with the information security 

21 requirements under subchapter II of chapter 35 of title 

22 44, United States Code, shall develop standards and 

23 guidelines for executive agencies which require adequate 

24 security measures for use of the digital yuan on Govern25 ment information technology devices. 


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1 SEC. 604. CERTIFICATE OF AUTHORITY TO COMMENCE 

2 BANKING. 

3 Section 5169 of the Revised Statutes (12 U.S.C. 27) 

4 is amended— 

5 (1) in subsection (a), in the third sentence, by 

6 striking ‘‘to those of a trust company and activities 

7 related thereto.’’ and inserting the following: ‘‘to— 

8 ‘‘(1) those of a trust company and fiduciary ac9 tivities related thereto; or 

10 ‘‘(2) those of a depository institution required 

11 to maintain assets valued at not less than 100 per12 cent of the deposits of the institution, for the pur13 poses of issuing a payment stablecoin (as defined in 

14 section 9801 of title 31, United States Code) and 

15 activities related thereto consistent with subsection 

16 (c) of this section and without the requirement to 

17 maintain deposit insurance under the Federal De18 posit Insurance Act (12 U.S.C. 1811 et seq.).’’; and 

19 (2) by adding at the end the following: 

20 ‘‘(c)(1) Notwithstanding any other provision of law, 

21 a National Bank Association described in subsection (a) 

22 may not engage in maturity transformation or facilitate 

23 consumer lending through third parties. 

24 ‘‘(2) Restrictions on affiliate transactions applicable 

25 for insured depository institutions shall apply to such de26 pository institutions. 


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1 ‘‘(3) The Comptroller of the Currency, in close con2 sultation with the Board of Governors of the Federal Re3 serve System and State bank supervisors, shall develop the 

4 following: 

5 ‘‘(A) A simplified capital framework based on 

6 the following: 

7 ‘‘(i) Payment system risk. 

8 ‘‘(ii) The greater of— 

9 ‘‘(I) all projected costs of receivership; 

10 or 

11 ‘‘(II) 3 years of projected operating 

12 expenses. 

13 ‘‘(B) Appropriate standards for the depository 

14 institution to develop a community contribution 

15 plan, which may include consumer education, finan16 cial literacy, charitable donations, volunteerism, job 

17 training and internships or similar involvement. 

18 ‘‘(C) A tailored recovery and resolution plan 

19 that would permit the orderly resumption of a safe 

20 and sound operation or the orderly wind-down of op21 erations relating to a payment stablecoin in the 

22 event of distress. 

23 ‘‘(D) Tailored holding company supervision, as 

24 specified by section 15 of the Bank Holding Com25 pany Act of 1956. 


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1 ‘‘(4) In designing the simplified capital frame2 work required by paragraph (3)(A), the Comptroller 

3 of the Currency— 

4 ‘‘(A) shall not subject depository institu5 tions to the standards of section 171 of the Fi6 nancial Stability Act of 2010 (12 U.S.C. 5371); 

7 and 

8 ‘‘(B) shall take into account the significant 

9 differences between the risks of the assets of 

10 the institution and those of depository institu11 tions with assets that consist primarily of com12 mercial or consumer loans. 

13 ‘‘(d) The Comptroller of the Currency may promul14 gate rules to carry out this section.’’. 

15 SEC. 605. HOLDING COMPANY SUPERVISION OF COVERED 

16 DEPOSITORY INSTITUTIONS. 

17 The Bank Holding Company Act of 1956 (12 U.S.C. 

18 1841 et seq.) is amended— 

19 (1) in section 2(c) (12 U.S.C. 1841(c)), by 

20 striking paragraph (2) and by inserting the fol21 lowing: 

22 ‘‘(2) EXCEPTIONS.—The term ‘bank’ does not 

23 include a covered depository institution subject to 

24 tailored holding company supervision under section 

25 15.’’; and 


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1 (2) by adding at the end the following: 

2 ‘‘SEC. 15. TAILORED HOLDING COMPANY SUPERVISION FOR 

3 COVERED DEPOSITORY INSTITUTIONS. 

4 ‘‘(a) DEFINITIONS.—In this section: 

5 ‘‘(1) APPROPRIATE BANKING SUPERVISOR.— 

6 The term ‘appropriate banking supervisor’ means 

7 the Comptroller of the Currency, a State bank su8 pervisor, in the case of a State member bank, the 

9 Board, or in the case of an insured bank, the Fed10 eral Deposit Insurance Corporation, as applicable. 

11 ‘‘(2) CONTROLLING INTEREST.—The term ‘con12 trolling interest’ means a circumstance when a per13 son, directly or indirectly, or acting through or in 

14 concert with 1 or more persons— 

15 ‘‘(A) owns, controls, or has the power to 

16 vote 25 percent or more of any class of voting 

17 securities of a covered depository institution; 

18 ‘‘(B) controls in any manner the election of 

19 a majority of the directors of the covered depos20 itory institution; or 

21 ‘‘(C) has the power to exercise a control22 ling influence over the management or policies 

23 of the covered depository institution. 

24 ‘‘(3) COVERED DEPOSITORY INSTITUTION.— 

25 The term ‘covered depository institution’ means a 


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1 depository institution operating under subsection (c) 

2 of section 5169 of the Revised Statutes (12 U.S.C. 

3 27), or a substantially similar State law, other than 

4 a bank, as defined in section 2 of the Bank Holding 

5 Company Act of 1956 (12 U.S.C. 1841), or an in6 sured depository institution, as defined in section 3 

7 of the Federal Deposit Insurance Act (12 U.S.C. 

8 1813), which is exclusively engaged in issuing pay9 ment stablecoins, providing safekeeping, trust or 

10 custodial services, or activities incidental to the fore11 going. 

12 ‘‘(b) CONTROLLING INTEREST.—A person with a 

13 controlling interest in a covered depository institution 

14 shall— 

15 ‘‘(1) submit annual audited financial statements 

16 and other information as otherwise reasonably re17 quired by the appropriate banking supervisor; and 

18 ‘‘(2) provide a description of all affiliated or 

19 parent entities and their relationships with the insti20 tution, including annual updates. 

21 ‘‘(c) TAX ALLOCATION AGREEMENT.—The appro22 priate banking supervisor may require a legal entity with 

23 a controlling interest in a covered depository institution 

24 to execute a tax allocation agreement with the institution 

25 that— 


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1 ‘‘(1) expressly states that an agency relation2 ship exists between the person and the institution 

3 with respect to tax assets generated by the institu4 tion, and that the assets are held in trust by the 

5 person for the benefit of the institution and will be 

6 promptly remitted to the institution; and 

7 ‘‘(2) may provide that the amount and timing 

8 of any payments or refunds to the institution by the 

9 person should be no less favorable than if the insti10 tution were a separate taxpayer. 

11 ‘‘(d) PROHIBITION ON CONTROLLING INTERESTS.— 

12 A person that is a commercial firm, as defined in section 

13 602 of the Bank and Savings Association Holding Com14 pany and Depository Institution Regulatory Improvements 

15 Act of 2010 (12 U.S.C. 1815 note), may not obtain a con16 trolling interest in a covered depository institution. 

17 ‘‘(e) PUBLIC INTEREST.—If the appropriate banking 

18 supervisor finds that it is in the public interest and has 

19 reasonable cause to believe it is necessary to protect the 

20 customers of a covered depository institution, the super21 visor may— 

22 ‘‘(1) conduct an examination of a legal entity 

23 with a controlling interest in a covered depository in24 stitution or otherwise require information from the 

25 person; and 


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1 ‘‘(2) require a person with a controlling interest 

2 in a covered depository institution to divest or sever 

3 their relationship with the institution, if necessary to 

4 maintain safety and soundness.’’. 

5 SEC. 606. IMPLEMENTATION RULES TO PRESERVE ADE6 QUATE COMPETITION IN PAYMENT 

7 STABLECOINS. 

8 (a) IN GENERAL.—The application of a non-deposi9 tory trust company or the holder of a State license that 

10 only persons engaged in digital asset activities may obtain, 

11 which was chartered or issued under the laws of a State 

12 or the National Bank Act before the date of enactment 

13 of this Act, to receive a charter as a depository institution 

14 and to operate under subsection (c) of section 5169 of the 

15 Revised Statutes (12 U.S.C. 27), as added by section 604 

16 of this Act, shall be decided upon by the Comptroller of 

17 the Currency before an application for a charter to operate 

18 under that section from another entity that is filed on or 

19 after the date of enactment of this Act. 

20 (b) APPLICATION.—The application of a covered de21 pository institution, as defined in section 15(a) of the 

22 Bank Holding Company Act of 1956 (12 U.S.C. 1853(a)), 

23 chartered before the date of enactment of this Act to be24 come a State member bank in the Federal Reserve System 

25 or for access to Federal Reserve services under section 


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1 11A of the Federal Reserve Act (12 U.S.C. 248a) shall 

2 be decided upon by the Board of Governors of the Federal 

3 Reserve System, or a Federal Reserve bank, as applicable, 

4 before any application to become a State member bank 

5 or for Federal Reserve services from any other entity 

6 which seeks to operate as a covered depository institution 

7 and which is filed on or after the date of enactment of 

8 this Act. 

9 (c) DECISION.—The applications described in sub10 sections (a) and (b) of this section shall be decided upon 

11 by the appropriate Federal banking agency (as defined in 

12 section 3 of the Federal Deposit Insurance Act (12 U.S.C. 

13 1813)) or Federal Reserve bank, as applicable, before an 

14 insured depository institution in operation before the en15 actment date of this Act may issue a payment stablecoin 

16 in accordance with section 722A of the Gramm-Leach-Bli17 ley Act, as added by section 601 of this Act. 

18 SEC. 607. FINANCIAL CRIMES ENFORCEMENT NETWORK IN19 NOVATION LABORATORY. 

20 Section 310 of title 31, United States Code, is 

21 amended by adding at the end the following: 

22 ‘‘(m) INNOVATION LABORATORY.— 

23 ‘‘(1) IN GENERAL.—There is established within 

24 the Financial Crimes Enforcement Network an In25 novation Laboratory to promote regulatory dialogue, 


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1 data sharing between the Financial Crimes Enforce2 ment Network and financial companies, and an as3 sessment of potential changes in law, rules, or poli4 cies to facilitate the appropriate supervision of finan5 cial technology and the laws under the jurisdiction 

6 of the agency. 

7 ‘‘(2) CHIEF INNOVATION OFFICER.—The inno8 vation officer appointed under section 6208 of the 

9 Anti-Money Laundering Act of 2020 (31 U.S.C. 

10 5311 note) by the Director of the Financial Crimes 

11 Enforcement Network shall manage the Innovation 

12 Laboratory. 

13 ‘‘(3) DUTIES.—The Innovation Laboratory, as 

14 appropriate, shall study changes in financial tech15 nology and make recommendations to Congress, the 

16 Secretary, and the Director for appropriate changes 

17 in laws, rules, or policies that can more effectively 

18 facilitate the supervision of financial technology with 

19 respect to the laws under the jurisdiction of the Fi20 nancial Crimes Enforcement Network, including dig21 ital assets, distributed ledger technology and decen22 tralized finance. 

23 ‘‘(4) PILOT PROJECTS.—The Innovation Lab24 oratory, as appropriate, shall conduct pilot projects 

25 with financial companies to more effectively facilitate 


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1 the supervision of financial technology, consistent 

2 with applicable law.’’. 

3 TITLE VII—RESPONSIBLE 

4 BANKING INNOVATION 

5 SEC. 701. STUDY ON USE OF DISTRIBUTED LEDGER TECH6 NOLOGY FOR REDUCTION OF RISK IN DEPOS7 ITORY INSTITUTIONS. 

8 Not later than 180 days after the date of enactment 

9 of this Act, the Board of Governors of the Federal Reserve 

10 System shall complete a study and submit to the Com11 mittee on Banking, Housing, and Urban Affairs of the 

12 Senate and the Committee on Financial Services of the 

13 House of Representatives a report regarding the manner 

14 in which distributed ledger technology may reduce risk for 

15 depository institutions, as defined in section 19(b)(1) of 

16 the Federal Reserve Act (12 U.S.C. 461(b)(1)), including 

17 settlement risk, operational risk and capital requirements. 

18 SEC. 702. ELIGIBILITY FOR FEDERAL RESERVE SERVICES 

19 TO DEPOSITORY INSTITUTIONS. 

20 (a) FINDINGS.—Congress finds the following: 

21 (1) Final settlement of transactions in central 

22 bank money reduces risk in the financial system, in23 cluding through the reduction of counterparty expo24 sure. 


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1 (2) Digital assets settle with finality in seconds 

2 or minutes, whereas traditional financial trans3 actions may take days to settle. 

4 (3) This mismatch in the settlement window of 

5 digital assets and traditional financial assets creates 

6 risk in the economy that may be reduced through 

7 the ability of depository institutions to simulta8 neously conduct digital asset transactions and settle, 

9 with finality, the United States dollar component of 

10 these transactions. 

11 (4) The Federal Reserve Act specifies that a 

12 depository institution, as defined in section 19(b)(1) 

13 of that Act (12 U.S.C. 461(b)(1)), upon receiving a 

14 charter from the Office of the Comptroller of the 

15 Currency, National Credit Union Administration or 

16 State bank supervisor, is required to be made avail17 able services from Federal Reserve banks under sec18 tion 11A of the Federal Reserve Act (12 U.S.C. 

19 248a), including currency and coin services, wire 

20 transfer services, automated clearinghouse services 

21 and settlement services. 

22 (5) Numerous Federal courts have found that 

23 the provision of services to depository institutions 

24 under section 11A of the Federal Reserve Act (12 


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1 U.S.C. 248a) is a ministerial duty imposed by Con2 gress with respect to all depository institutions. 

3 (6) The Board of Governors of the Federal Re4 serve System has long interpreted the Federal Re5 serve Act to mean that the Federal Reserve banks 

6 must provide services to all depository institutions, 

7 noting that it has a duty ‘‘to ensure the provision 

8 of payment services to all depository institutions on 

9 an equitable basis, and to do so in an atmosphere 

10 of competitive fairness’’. 

11 (7) The Federal Reserve banks have, on occa12 sion, provided services to non-depository, non-in13 sured institutions without appropriate statutory au14 thority. 

15 (8) Certain novel legal positions that conflict 

16 with or frustrate these precedents are not in the best 

17 traditions of the Federal Reserve Act, our dual 

18 banking system, and the imperatives of Congress. 

19 (9) The statutory independence of the Board of 

20 Governors and the Federal Reserve banks under the 

21 Constitution of the United States is properly rooted 

22 in absolute fidelity to the laws enacted by Congress. 

23 (10) It is appropriate for Congress to reaffirm 

24 its existing statutory intent to ensure that all deposi25 tory institutions may access services under the FedVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00129 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 eral Reserve Act ‘‘on an equitable basis, and to do 

2 so in an atmosphere of competitive fairness’’. 

3 (b) PRICING OF SERVICES.—Section 11A of the Fed4 eral Reserve Act (12 U.S.C. 248a) is amended by adding 

5 at the end the following: 

6 ‘‘(f) A Federal Reserve bank shall provide a seg7 regated balance account to a depository institution upon 

8 the request of any institution that receives services under 

9 this section.’’. 

10 (c) DEPOSITS; EXCHANGE AND COLLECTION; MEM11 BER AND NONMEMBER BANKS OR OTHER DEPOSITORY

12 INSTITUTIONS; CHARGES.—Section 13 of the Federal Re13 serve Act (12 U.S.C. 342) is amended to read as follows: 

14 ‘‘Any Federal Reserve bank shall receive from any of 

15 its member banks or other depository institutions, and 

16 from the United States, deposits of current funds in lawful 

17 money, national-bank notes, Federal reserve notes, or 

18 checks, and drafts, payable upon presentation or other 

19 items, and also, for collection, maturing notes and bills; 

20 or, solely for purposes of exchange or of collection, shall 

21 receive from other Federal Reserve banks deposits of cur22 rent funds in lawful money, national-bank notes, or checks 

23 upon other Federal Reserve banks, and checks and drafts, 

24 payable upon presentation within its district or other 

25 items, and maturing notes and bills payable within its disVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00130 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 trict; or, solely for the purposes of exchange or of collec2 tion, shall receive from any nonmember bank or trust com3 pany or other depository institution deposits of current 

4 funds in lawful money, national-bank notes, Federal re5 serve notes, checks and drafts payable upon presentation 

6 or other items, or maturing notes and bills: Provided, Such 

7 nonmember bank or trust company or other depository in8 stitutions maintains with the Federal Reserve bank of its 

9 district a balance in such amount as the Board determines 

10 taking into account items in transit, services provided by 

11 the Federal Reserve bank, and other factors as the Board 

12 may deem appropriate: Provided further, That nothing in 

13 this or any other section of this Act shall be construed 

14 as prohibiting a member or nonmember bank or other de15 pository institution from making reasonable charges, to be 

16 determined and regulated by the Board of Governors, but 

17 in no case to exceed 10 cents per $100 or fraction thereof, 

18 based on the total of checks and drafts presented at any 

19 one time, for collection or payment of checks and drafts 

20 and remission therefor by exchange or otherwise; but no 

21 such charges shall be made against the Federal Reserve 

22 banks.’’. 

23 SEC. 703. ROUTING TRANSIT NUMBER ISSUANCE. 

24 Not later than 2 years after the date of enactment 

25 of this Act, the Board of Governors of the Federal Reserve 


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1 System shall assume responsibility for issuing routing 

2 transit numbers to depository institutions for all purposes 

3 relating to the clearing of transactions and the services 

4 required to be made available to all depository institutions 

5 under section 11A of the Federal Reserve Act (12 U.S.C. 

6 248a). 

7 SEC. 704. CLARIFYING APPLICATION REVIEW TIMES WITH 

8 RESPECT TO THE FEDERAL BANKING AGEN9 CIES. 

10 Section 343 of the Riegle Community Development 

11 and Regulatory Improvement Act of 1994 (12 U.S.C. 

12 4807) is amended by striking subsection (a) and inserting 

13 the following: 

14 ‘‘(a) FINAL ACTION.— 

15 ‘‘(1) DEFINITION.—In this subsection, the term 

16 ‘completed application’— 

17 ‘‘(A) means the information requested by 

18 the Federal banking agency at the outset of an 

19 application through application forms or similar 

20 means; and 

21 ‘‘(B) does not include supplemental infor22 mation requested by the agency after filing of 

23 an application. 

24 ‘‘(2) ACTION.—Each Federal banking agency, 

25 including Federal Reserve banks, shall take final acVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00132 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 tion on any application to the agency before the end 

2 of the 1-year period beginning on the date on which 

3 a completed application is received by the agency. 

4 ‘‘(b) REPORT.—Each Federal banking agency, in5 cluding the Federal Reserve banks, shall annually report 

6 to Congress a list of the applications that have been pend7 ing for 9 months or longer since the date of the initial 

8 application filed by an applicant. Such list— 

9 ‘‘(1) shall disclose the reason why the applica10 tion has not yet been approved or denied by the 

11 Federal banking agency; and 

12 ‘‘(2) shall not contain confidential supervisory 

13 information.’’. 

14 SEC. 705. EXAMINATION STANDARDS FOR DIGITAL ASSET 

15 ACTIVITIES. 

16 (a) IN GENERAL.—Not later than 18 months after 

17 the date of enactment of this Act, the Federal Financial 

18 Institutions Examination Council, in consultation with the 

19 Financial Crimes Enforcement Network, shall publish 

20 final guidance and examiner handbooks for depository in21 stitutions, as defined in section 19(b)(1) of the Federal 

22 Reserve Act (12 U.S.C. 461(b)(1)), on the following topics 

23 related to digital assets: 

24 (1) Anti-money laundering, customer identifica25 tion, beneficial ownership, and sanctions compliance, 


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1 including with respect to payment stablecoin activi2 ties and subsidiary value (as defined in section 

3 9802(c) of title 31, United States Code). 

4 (2) Custody. 

5 (3) Fiduciary and capital markets activities. 

6 (4) Information technology standards. 

7 (5) Payment system risk. 

8 (6) Consumer protection. 

9 (b) FINAL GUIDANCE.—Not later than 18 months 

10 after the date of enactment of this Act, Securities and Ex11 change Commission and Commodity Futures Trading 

12 Commission, in consultation with the Financial Crimes 

13 Enforcement Network, shall publish final guidance and ex14 aminer handbooks relating to digital asset intermediaries 

15 regarding the topics described in paragraphs (1) and (4) 

16 of subsection (a). 

17 SEC. 706. ASSET CUSTODY FOR DEPOSITORY INSTITUTIONS 

18 AND CERTAIN OTHER ENTITIES. 

19 (a) FINDINGS.—Congress finds the following: 

20 (1) The laws surrounding custody of financial 

21 assets is largely customary, uncodified, and poorly 

22 understood. 

23 (2) Lack of uniformity amongst various juris24 dictions’ laws relating to custody has largely not 


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1 been addressed by regulators, can contribute to risk, 

2 and is producing uncertainty for innovators. 

3 (3) Codifying basic principles around custody of 

4 financial assets will reduce systemic risk, clearly de5 fine the rights and duties of both custodian and cus6 tomer, and contribute to a more uniform and effec7 tive banking system. 

8 (b) DEFINITION.—In this section, the term ‘‘cus9 tody’’ means the safekeeping, servicing and management 

10 of customer financial assets, including currency, securities 

11 and commodities, on an off-balance sheet basis. 

12 (c) CUSTODY.— 

13 (1) IN GENERAL.—Except as provided in para14 graph (2), custody of financial assets is accom15 plished by a bailment and established by a written 

16 customer agreement. Custody shall not be a fidu17 ciary or trust activity unless the custodian is pro18 viding substantial discretionary services with respect 

19 to an account, including through investment advice 

20 or investment discretion, and the custodian owes a 

21 customer a higher standard of care or duty with re22 spect to the customer of that account. 

23 (2) EXCEPTION.—A custodian and customer 

24 may establish a legal relationship other than a bail25 ment pursuant to a written customer agreement. 


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1 (d) PROPER DOCUMENTATION.—A custodial account 

2 shall be properly documented in a customer agreement, 

3 with a clearly defined legal relationship between the custo4 dian and customer. Custodial assets shall be properly iden5 tified and segregated from the assets of the custodian, 

6 with proper documentation of asset segregation. 

7 (e) NOT ASSETS OR LIABILITIES.—Assets properly 

8 held in a custodial account under this section are not as9 sets or liabilities of the custodian and shall be maintained 

10 on an off-balance sheet basis, including for the purpose 

11 of accounting treatment for the custodian and the cus12 tomers of the custodian, notwithstanding the form in 

13 which the assets are maintained. 

14 (f) APPLICABILITY.—This section shall apply to de15 pository institutions, as defined in section 19(b)(1) of the 

16 Federal Reserve Act (12 U.S.C. 461(b)(1)), and non-de17 pository trust companies chartered under section 5169 of 

18 the Revised Statutes (12 U.S.C. 27). 

19 SEC. 707. REPUTATION RISK; REQUIREMENTS FOR AC20 COUNT TERMINATION REQUESTS AND OR21 DERS. 

22 (a) REPUTATION RISK.—An appropriate Federal 

23 banking agency may not formally or informally request or 

24 order a depository institution to terminate a specific cus25 tomer account or group of customer accounts unless the 


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1 agency has a valid reason for such request or order, con2 sistent with subsections (b) and (c). 

3 (b) NO RESTRICTION.—An appropriate Federal 

4 banking agency shall not restrict or discourage a deposi5 tory institution from entering into or maintaining a bank6 ing relationship with a specific customer or group of cus7 tomers based on reputation risk, including through the ex8 aminations and ratings of the depository institution. 

9 (c) TREATMENT OF NATIONAL SECURITY

10 THREATS.—If an appropriate Federal banking agency be11 lieves a specific customer or group of customers is, or act12 ing as a conduit for, an entity which— 

13 (1) poses a threat to national security; 

14 (2) is involved in terrorist financing; 

15 (3) is an agency of the Government of Iran, 

16 North Korea, Syria, or any country listed from time 

17 to time on the State Sponsors of Terrorism list; 

18 (4) is located in, or is subject to the jurisdiction 

19 of, any country specified in paragraph (3); or 

20 (5) does business with any entity described in 

21 paragraph (3) or (4), unless the appropriate Federal 

22 banking agency determines that the customer or 

23 group of customers has used due diligence to avoid 

24 doing business with that entity, such belief shall sat25 isfy the requirement under subsection (a). 


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1 (d) NOTICE REQUIREMENT.— 

2 (1) IN GENERAL.—If an appropriate Federal 

3 banking agency formally requests or orders a deposi4 tory institution to terminate a specific customer ac5 count or a group of customer accounts, the agency 

6 shall— 

7 (A) provide such request or order to the 

8 institution in writing; and 

9 (B) accompany such request or order with 

10 a written justification for why such termination 

11 is needed, including any specific laws or rules 

12 the agency believes are being violated by the 

13 customer or group of customers. 

14 (2) JUSTIFICATION REQUIREMENT.—Consistent 

15 with subsection (b), the justification described in 

16 paragraph (1)(B) may not be based on reputation 

17 risk to the depository institution. 

18 (e) CUSTOMER NOTICE.— 

19 (1) NOTICE REQUIRED.—Except as provided 

20 under paragraph (2) or as otherwise prohibited from 

21 being disclosed by law, if an appropriate Federal 

22 banking agency orders a depository institution to 

23 terminate a specific customer account or a group of 

24 customer accounts, the depository institution shall 

25 inform the specific customer or group of customers 


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1 of the justification for the customer’s account termi2 nation described under subsection (b). 

3 (2) NOTICE PROHIBITED.— 

4 (A) NOTICE PROHIBITED IN CASES OF NA5 TIONAL SECURITY.—If an appropriate Federal 

6 banking agency requests or orders a depository 

7 institution to terminate a specific customer ac8 count or a group of customer accounts based on 

9 a belief that the customer or customers pose a 

10 threat to national security, or are otherwise de11 scribed under subsection (a)(2), neither the de12 pository institution nor the appropriate Federal 

13 banking agency may inform the customer or 

14 customers of the justification for the customer’s 

15 account termination. 

16 (B) NOTICE PROHIBITED IN OTHER

17 CASES.—If an appropriate Federal banking 

18 agency determines that the notice required 

19 under paragraph (1) may interfere with an au20 thorized criminal investigation, neither the de21 pository institution nor the appropriate Federal 

22 banking agency may inform the specific cus23 tomer or group of customers of the justification 

24 for the customer’s account termination. 


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1 (f) REPORTING REQUIREMENT.—Each appropriate 

2 Federal banking agency shall issue an annual report to 

3 Congress stating— 

4 (1) the aggregate number of specific customer 

5 accounts that the agency requested or ordered a de6 pository institution to terminate during the previous 

7 year; and 

8 (2) the legal authority on which the agency re9 lied in making such requests and orders and the fre10 quency on which the agency relied on each such au11 thority. 

12 (g) DEFINITIONS.—In this section: 

13 (1) APPROPRIATE FEDERAL BANKING AGEN14 CY.—The term ‘‘appropriate Federal banking agen15 cy’’ means— 

16 (A) the appropriate Federal banking agen17 cy, as defined in section 3 of the Federal De18 posit Insurance Act (12 U.S.C. 1813); and 

19 (B) the National Credit Union Administra20 tion, in the case of an insured credit union. 

21 (2) DEPOSITORY INSTITUTION.—The term ‘‘de22 pository institution’’ has the meaning given the term 

23 in section 19(b)(1) of the Federal Reserve Act (12 

24 U.S.C. 461(b)(1)(A)). 


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1 SEC. 708. CONFORMING AMENDMENTS. 

2 (a) FEDERAL DEPOSIT INSURANCE ACT.—Section 

3 12 of the Federal Deposit Insurance Act (12 U.S.C. 1822) 

4 is amended by adding at the end the following: 

5 ‘‘(g) APPOINTMENT OF RECEIVER.— 

6 ‘‘(1) DEFINITION.—In this subsection, the term 

7 ‘covered depository institution’ has the meaning 

8 given the term in section 15(a) of the Bank Holding 

9 Company Act of 1956. 

10 ‘‘(2) APPOINTMENT.—The Corporation may be 

11 appointed as receiver of a covered depository institu12 tion, as defined in section 15(a) of the Bank Hold13 ing Company Act of 1956. 

14 ‘‘(3) PREMIUMS.—A covered depository institu15 tion may not be charged deposit insurance premiums 

16 for the purpose of this subsection, but the Corpora17 tion may use the capital of the covered depository 

18 institution to fund the costs of the receivership. 

19 ‘‘(4) RULES.—The Corporation may promul20 gate rules to carry out this subsection, which shall— 

21 ‘‘(A) be substantially consistent with the 

22 rules for receivership of an insured depository 

23 institution; and 

24 ‘‘(B) account for the limited activities, cap25 ital, and the required tailored recovery and resVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00141 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 olution plan of the covered depository institu2 tion.’’. 

3 (b) FEDERAL RESERVE ACT.—The Federal Reserve 

4 Act (12 U.S.C. 221 et seq.) is amended— 

5 (1) in section 19(b)(1)(A) (12 U.S.C. 

6 461(b)(1)(A))— 

7 (A) in clause (vi), by striking ‘‘and’’ at the 

8 end; 

9 (B) in clause (vii), by striking the period 

10 at the end and inserting ‘‘; and’’; and 

11 (C) by adding at the end the following: 

12 ‘‘(viii) a covered depository institution, 

13 as defined in section 15(a) of the Bank 

14 Holding Company Act of 1956.’’; and 

15 (2) in the first undesignated paragraph of sec16 tion 9 (12 U.S.C. 321), in the first sentence, by in17 serting ‘‘, covered depository institutions, as defined 

18 in section 15(a) of the Bank Holding Company Act 

19 of 1956 (12 U.S.C. 1853(a)),’’ after ‘‘Plan banks’’. 


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1 TITLE VIII—RESPONSIBLE 

2 INTERAGENCY COORDINATION 

3 SEC. 801. TIMELINE FOR INTERPRETIVE GUIDANCE ISSUED 

4 BY FEDERAL FINANCIAL AGENCIES. 

5 (a) IN GENERAL.—Title 31, United States Code, is 

6 amended by adding after chapter 98, as added by section 

7 101(a) of this Act, the following: 

8 ‘‘CHAPTER 99—RESPONSIBLE 

9 INTERAGENCY COORDINATION 

‘‘Sec. 

‘‘9901. Timeline for interpretive guidance issues by Federal financial agencies. 

‘‘9902. Interstate sandbox activities. 

10 ‘‘§ 9901. Timeline for interpretive guidance issues by 

11 Federal financial agencies 

12 ‘‘(a) IN GENERAL.—In this section: 

13 ‘‘(1) FEDERAL FINANCIAL REGULATOR.—The 

14 term ‘Federal financial regulator’ means— 

15 ‘‘(A) Board of Governors of the Federal 

16 Reserve System and the Federal Reserve banks; 

17 ‘‘(B) Commodity Futures Trading Com18 mission; 

19 ‘‘(C) Department of the Treasury; 

20 ‘‘(D) Federal Deposit Insurance Corpora21 tion; 

22 ‘‘(E) Federal Housing Finance Agency; 


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1 ‘‘(F) National Credit Union Administra2 tion; 

3 ‘‘(G) Office of the Comptroller of the Cur4 rency; 

5 ‘‘(H) Consumer Financial Protection Bu6 reau; and 

7 ‘‘(I) Securities and Exchange Commission. 

8 ‘‘(2) REQUESTING PERSON.—The term ‘re9 questing person’— 

10 ‘‘(A) means any entity that is required to 

11 be chartered, licensed, supervised or registered 

12 by that agency; and 

13 ‘‘(B) includes State agencies and self-regu14 latory organizations. 

15 ‘‘(b) RESPONSE.—Not later than 180 days after fil16 ing a written request for individualized interpretive guid17 ance with respect to the application of a statute, rule or 

18 policy under the jurisdiction of a Federal financial regu19 lator, the agency shall provide a final, complete and writ20 ten response to the requesting person. This subsection 

21 shall not apply to requests for guidance that the Federal 

22 financial regulator determine lack substance. 

23 ‘‘(c) OTHER MATTERS.—With respect to matters del24 egated or otherwise under the jurisdiction of self-regu25 latory organizations, including national securities exVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00144 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 changes, boards of trade, and similar entities, the self-reg2 ulatory organization shall be subject to the same require3 ments as a Federal financial regulator under this sec4 tion.’’. 

5 SEC. 802. INTERSTATE SANDBOX ACTIVITIES. 

6 (a) IN GENERAL.—Chapter 99 of title 31, United 

7 States Code, as added by section 701 of this Act, is 

8 amended by adding at the end the following: 

9 ‘‘§ 9902. Interstate sandbox activities 

10 ‘‘(a) DEFINITIONS.—In this section: 

11 ‘‘(1) FEDERAL FINANCIAL REGULATOR.—The 

12 term ‘Federal financial regulator’ means the Federal 

13 agency described in section 9901(a)(1) that would 

14 typically exercise jurisdiction over the product or 

15 service made available in the State financial regu16 latory sandbox, or the Department of the Treasury, 

17 in the case of a matter only within the jurisdiction 

18 of a State. 

19 ‘‘(2) FINANCIAL COMPANY.—The term ‘finan20 cial company’ means a business entity primarily en21 gaged in activities that are financial in nature, as 

22 described in section 4(k)(4) of the Bank Holding 

23 Company Act of 1956 (12 U.S.C. 1843(k)(4)). 

24 ‘‘(3) HOST STATE.—The term ‘host State’ 

25 means a State in which a financial company is not 


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1 operating in the State financial regulatory sandbox 

2 of that State. 

3 ‘‘(4) INNOVATIVE.—The term ‘innovative’ 

4 means new or emerging technology, or new uses of 

5 existing technology, that— 

6 ‘‘(A) provides a financial product, service, 

7 business model, or delivery mechanism to the 

8 public; and 

9 ‘‘(B) has no substantially comparable, 

10 widely available analogue in common use in the 

11 United States. 

12 ‘‘(5) STATE FINANCIAL REGULATOR.—The term 

13 ‘State financial regulator’ includes State agencies 

14 that regulate, supervise, or license banks, trust com15 panies, credit unions, consumer credit, consumer 

16 protection, money transmission, securities, commod17 ities, and similar areas. 

18 ‘‘(6) STATE FINANCIAL REGULATORY SAND19 BOX.—The term ‘State financial regulator sandbox’ 

20 means a program created under State law that al21 lows a financial company to make an innovative fi22 nancial product or service available to customers 

23 within that State during a defined period in order to 

24 permit regulatory dialogue, data sharing amongst 

25 regulators and financial companies, and to promote 


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1 an assessment of potential changes in law, rule, or 

2 policy to facilitate the appropriate supervision of fi3 nancial technology. 

4 ‘‘(b) BUSINESS CONDUCTED.—Upon joint approval 

5 under subsection (d), a financial company in good stand6 ing in a State financial regulatory sandbox and operating 

7 for not less than 6 months in that sandbox program, may 

8 do business across State lines under the standards of this 

9 section. If approved, the State financial regulator and the 

10 Federal financial regulator may agree upon reasonable ad11 justments to the number of customers that may be served, 

12 increased bonding or collateral requirements, and similar 

13 conditions which may be appropriate for conducting busi14 ness nationally. 

15 ‘‘(c) STATE SANDBOX REQUIREMENTS.—A State fi16 nancial regulatory sandbox shall contain the following 

17 components for financial companies to be eligible to do 

18 business across State lines under this section: 

19 ‘‘(1) A limited sandbox period of not more than 

20 24 months. 

21 ‘‘(2) Consumer protection requirements, which 

22 may include disclosures, bonding, insurance require23 ments, and financial literacy programs for specified 

24 consumers. 


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1 ‘‘(3) Authority to conduct examinations of the 

2 financial company. 

3 ‘‘(4) A background investigation of the financial 

4 company and its officers, directors, members, man5 agers and key employees, prior to commencing busi6 ness. 

7 ‘‘(d) DECISION.—Upon submission of an application 

8 by a financial company to conduct business across State 

9 lines under subsection (b), the State financial regulator 

10 and Federal financial regulator shall jointly issue a deci11 sion within 120 days with respect to that application, irre12 spective of any supplemental information with respect to 

13 the application that may be requested after initial filing. 

14 The Federal financial regulator shall have the authority 

15 to conduct a joint examination of any financial company 

16 doing business under this section. 

17 ‘‘(e) FACTORS.—The State financial regulator and 

18 Federal financial regulator shall consider the following 

19 factors in rendering a decision on the application: 

20 ‘‘(1) Whether the product or service offered 

21 may be offered in a safe and sound manner across 

22 State lines. 

23 ‘‘(2) Whether the management and capital of 

24 the financial company is commensurate with the 

25 scale of the company. 


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1 ‘‘(3) Risk management plans of the financial 

2 company. 

3 ‘‘(4) Conduct of the financial company to date 

4 in the State regulatory sandbox, and any past regu5 latory actions, including actions against officers, di6 rectors, members, managers and key employees. 

7 ‘‘(5) Plans for consumer education and finan8 cial literacy, including partnerships with local edu9 cational institutions and community colleges to pro10 vide financial literacy classes or resources. 

11 ‘‘(6) Other factors determined by the State and 

12 Federal financial regulators to be material. 

13 ‘‘(f) ELECTION.—A host State may elect not to per14 mit financial companies operating under this section to do 

15 business in their State through issuance of an executive 

16 order by the Governor of that State. 

17 ‘‘(g) INNOVATIVE.—A product or service made avail18 able under this section through a State financial regu19 latory sandbox shall be innovative. 

20 ‘‘(h) RULES OF CONSTRUCTION.—This section shall 

21 not be construed to extend to permit— 

22 ‘‘(1) a financial company to engage in any ac23 tivities for which a charter, license, registration or 

24 for which permission would be required under Fed25 eral or State law but for the innovative financial 


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1 product or service being offered by the company, ex2 cept to the extent the financial company would be 

3 required to obtain a charter, license or other author4 ization required in a host State; 

5 ‘‘(2) failure to comply with any applicable por6 tion of State law required by the State financial reg7 ulatory sandbox, or failure to comply with any appli8 cable portion of Federal law, unless authorized on a 

9 limited basis by the Federal financial regulator to 

10 achieve the purposes of this section and the State fi11 nancial regulatory sandbox; or 

12 ‘‘(3) lending activities in excess of the max13 imum statutory rate of interest permissible in a 

14 State.’’. 

15 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

16 The table of contents for subtitle VI of title 31, United 

17 States Code, as amended by section 101(b) of this Act, 

18 is amended by adding at the end the following: 

‘‘99. Responsible interagency coordination ............................ 9901’’. 

19 SEC. 803. STATE MONEY TRANSMISSION COORDINATION 

20 RELATING TO DIGITAL ASSETS. 

21 (a) IN GENERAL.—In order to increase uniformity, 

22 reduce regulatory burden, and enhance consumer protec23 tion, the States, through the Conference of State Bank 

24 Supervisors and the Money Transmission Regulators As25 sociation, shall, not later than 2 years after the date of 


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1 enactment of this Act, ensure uniform treatment of digital 

2 assets for the purposes of State money transmission laws 

3 on the following matters: 

4 (1) Whether digital assets are subject to money 

5 transmission licensing requirements, as appropriate, 

6 which shall include the exchange of digital assets for 

7 legal tender. 

8 (2) Treatment of payment stablecoins. 

9 (3) Non-applicability to persons or software 

10 that engage in validation of transactions, non-custo11 dial wallet providers, or software or hardware devel12 opment. 

13 (4) Tangible net worth and permissible invest14 ment requirements. 

15 (5) Disclosures, reporting, and recordkeeping. 

16 (6) Common examination and examiner training 

17 standards, including common customer identifica18 tion, anti-money laundering, and sanctions best 

19 practices developed in consultation with the Finan20 cial Crimes Enforcement Network and the Office of 

21 Foreign Assets Control. 

22 (b) REGULATIONS.—If the Director of the Bureau of 

23 Consumer Financial Protection determines that a State 

24 does not have the requirements of subsection (a) in effect 

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1 sistent with the requirements of the several States on the 

2 date that is 2 years after the date of enactment of this 

3 section, the Director shall adopt rules applicable to that 

4 State that achieve the purposes of subsection (a) and that 

5 are consistent with the standards adopted in the States 

6 that have the requirements of subsection (a) in effect. The 

7 Director may extend the deadline under this section for 

8 not more than 1 year if a State has shown a good faith 

9 effort towards implementation. The Director may promul10 gate regulations to monitor State compliance with this 

11 subsection. 

12 SEC. 804. INFORMATION SHARING AMONG FEDERAL AND 

13 STATE FINANCIAL REGULATORS. 

14 Subtitle C of title VII of the Gramm-Leach-Bliley Act 

15 (Public Law 106–102; 113 Stat. 1470), as amended by 

16 section 601 of this Act, is amended by adding at the end 

17 the following: 

18 ‘‘SEC. 722B. INFORMATION SHARING AMONG FEDERAL AND 

19 STATE FINANCIAL REGULATORS. 

20 ‘‘(a) CONFIDENTIALITY.—Notwithstanding any other 

21 provision of law, any requirement under Federal or State 

22 law regarding the privacy or confidentiality of any infor23 mation or materials exchanged among financial regulators 

24 and any privilege arising under Federal or State law (in25 cluding the rules of any Federal or State court) with reVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00152 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 spect to such information or material, shall continue to 

2 apply to such information or material after the informa3 tion or material has been disclosed to any State or Federal 

4 financial regulator. 

5 ‘‘(b) NON-APPLICABILITY OF CERTAIN REQUIRE6 MENTS.—Information or material that is subject to privi7 lege or confidentiality under subsection (a) shall not be 

8 subject to— 

9 ‘‘(1) disclosure under any Federal or State law 

10 governing the disclosure to the public of information 

11 held by an officer or an agency of the Federal Gov12 ernment or the respective State; or 

13 ‘‘(2) subpoena or discovery, or admission into 

14 evidence, in any private civil action or administrative 

15 process, unless with respect to any privilege held by 

16 the Nationwide Mortgage Licensing System and 

17 Registry or the Director with respect to such infor18 mation or material, the person to whom such infor19 mation or material pertains waives that privilege, in 

20 whole or in part, based on the discretion of such per21 son. 

22 ‘‘(c) COORDINATION WITH OTHER LAW.—Any State 

23 or Federal law, including any State open records law, re24 lating to the disclosure of confidential supervisory infor25 mation or any information or material described in subVerDate Sep 11 2014 21:47 Jun 13, 2022 Jkt 029200 PO 00000 Frm 00153 Fmt 6652 Sfmt 6201 E:\BILLS\S4356.IS S4356

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1 section (a) that is inconsistent with subsection (a) shall 

2 be superseded by the requirements of such provision to 

3 the extent the State or Federal law provides less confiden4 tiality or a weaker privilege. 

5 ‘‘(d) CONFERENCE OF STATE BANK SUPERVISORS.— 

6 The Conference of State Bank Supervisors shall be consid7 ered the agent of the State financial regulators for the 

8 purposes of sharing information under this provision. 

9 ‘‘(e) DEFINITION.—In this section, the term ‘finan10 cial regulator’ means— 

11 ‘‘(1) the Board of Governors of the Federal Re12 serve System and the Federal Reserve banks; 

13 ‘‘(2) the Commodity Futures Trading Commis14 sion; 

15 ‘‘(3) the Department of the Treasury, including 

16 the Financial Crimes Enforcement Network and the 

17 Office of Foreign Assets Control; 

18 ‘‘(4) the Federal Deposit Insurance Corpora19 tion; 

20 ‘‘(5) the Federal Housing Finance Agency; 

21 ‘‘(6) the National Credit Union Administration; 

22 ‘‘(7) the Office of the Comptroller of the Cur23 rency; 

24 ‘‘(8) the Bureau of Consumer Financial Protec25 tion; 


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1 ‘‘(9) the Securities and Exchange Commission; 

2 and 

3 ‘‘(10) State agencies that regulate, supervise, or 

4 license banks, trust companies, credit unions, con5 sumer credit, consumer protection, money trans6 mission, securities, commodities, and similar areas.’’. 

7 SEC. 805. ANALYSIS OF DECENTRALIZED FINANCE MAR8 KETS AND TECHNOLOGIES. 

9 Not later than 1 year after the date of enactment 

10 of this Act, the Secretary of the Treasury, in consultation 

11 with the Commodity Futures Trading Commission, Secu12 rities and Exchange Commission, and private sector devel13 opers and participants in decentralized protocols, digital 

14 assets, and digital asset exchanges, shall— 

15 (1) analyze the market position of decentralized 

16 finance technologies with respect to digital assets; 

17 and 

18 (2) submit to the Committee on Banking, 

19 Housing, and Urban Affairs and the Committee on 

20 Agriculture, Nutrition, and Forestry of the Senate 

21 and the Committee on Financial Services and the 

22 Committee on Agriculture of the House of Rep23 resentatives a report on— 


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1 (A) current development and use of decen2 tralized finance protocols in the United States 

3 and other countries; 

4 (B) opportunities, benefits, and challenges 

5 relating to decentralized finance protocols and 

6 self-custody of digital assets; 

7 (C) a comparison of operational friction, 

8 fees, liquidity and trading opportunities in de9 centralized finance protocols, digital asset mar10 kets, and traditional markets; 

11 (D) transparency, prevention of manipula12 tion, and customer protection; 

13 (E) cybersecurity and resiliency; and 

14 (F) ensuring the accuracy of information 

15 regarding the underlying smart contracts of a 

16 decentralized finance protocol and the trans17 actions facilitated by such contracts, as the in18 formation appears on a website or other similar 

19 means relating to the protocol. 

20 SEC. 806. ANALYSIS OF ENERGY CONSUMPTION IN DIGITAL 

21 ASSET MARKETS. 

22 (a) IN GENERAL.—Each year, the Federal Energy 

23 Regulatory Commission, in consultation with the Com24 modity Futures Trading Commission and Securities and 


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1 Exchange Commission, shall analyze the following topics 

2 with respect to digital asset markets: 

3 (1) Energy consumption for mining and staking 

4 of digital asset transactions. 

5 (2) The effect of energy consumption described 

6 in paragraph (1) on national, regional, and local en7 ergy prices. 

8 (3) The effects of mining and staking of digital 

9 asset transactions on baseload power levels. 

10 (4) The use of renewable energy sources, in11 cluding use of nonrenewable sources that would oth12 erwise be wasted, and a comparison of digital asset 

13 market energy consumption with the financial serv14 ices industry and economy as a whole. 

15 (5) The sources and reliability of the data used 

16 under this subsection. 

17 (6) A process for regulated entities to make in18 formation publicly available regarding energy con19 sumption, including sources of energy and amount, 

20 and, if appropriate, recommendations to Congress to 

21 establish such a process. 

22 (b) REPORT.—Not later than December 31 of each 

23 year, the Federal Energy Regulatory Commission shall 

24 submit to the Committee on Energy and Natural Re25 sources and the Committee on Environment and Public 


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1 Works of the Senate and the Committee on Energy and 

2 Commerce and the Committee on Natural Resources of 

3 the House of Representatives a report containing the anal4 ysis required by subsection (a). 

5 SEC. 807. ANALYSIS OF SELF-REGULATION AND REG6 ISTERED DIGITAL ASSET ASSOCIATIONS. 

7 (a) IN GENERAL.—Not later than 180 days after the 

8 date of enactment of this Act, the Commodity Futures 

9 Trading Commission and Securities and Exchange Com10 mission, in consultation with digital asset intermediaries, 

11 as defined in section 9801 of title 31, United States Code, 

12 as added by section 101 of this Act, and standard-setting 

13 associations representing the digital asset industry, shall 

14 conduct a study and submit to the Committee on Banking, 

15 Housing, and Urban Affairs and the Committee on Agri16 culture, Nutrition, and Forestry of the Senate and the 

17 Committee on Financial Services and the Committee on 

18 Agriculture of the House of Representatives a report set19 ting forth principles for self-regulation for digital asset 

20 markets and a proposal for the establishment of registered 

21 digital asset associations for digital asset markets based 

22 on delegated authority from the Commodity Futures 

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1 kets for digital assets in accordance with this Act, and 

2 the amendments made by this Act, including— 

3 (1) standard setting, corporate transparency re4 quirements, and rulemaking relating to digital asset 

5 market conduct; 

6 (2) regular consultation between the Com7 modity Futures Trading Commission and Securities 

8 and Exchange Commission with respect to rules gov9 erning digital asset market conduct and the govern10 ance of registered digital asset associations; 

11 (3) appropriate investigatory and disciplinary 

12 powers of registered digital asset associations and 

13 registered digital asset exchanges, respectively; 

14 (4) the authority of digital asset intermediaries 

15 to conduct activities relating to traditional assets; 

16 (5) consumer education and financial literacy; 

17 (6) professional accreditation and education; 

18 (7) market surveillance and oversight, including 

19 use of technology to facilitate shared trade practices 

20 and market surveillance; 

21 (8) risk-based examination authority; 

22 (9) dispute resolution and arbitration; 

23 (10) membership of registered digital asset as24 sociation members in other self-regulatory organiza25 tions and mutual recognition and acceptance of rules 


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1 and examination reports amongst self-regulatory or2 ganizations; 

3 (11) voluntary and compulsory membership 

4 structures; 

5 (12) the initial determination of the legal classi6 fication of a digital asset by a registered digital 

7 asset association, subject to oversight by the Com8 modity Futures Trading Commission and Securities 

9 and Exchange Commission; and 

10 (13) the funding of registered digital asset as11 sociations based on fees. 

12 (b) INTERIM RULE.—Not later than August 1, 2022, 

13 the Commodity Futures Trading Commission and Securi14 ties and Exchange Commission shall jointly adopt an in15 terim final rule specifying the scope of the study under 

16 subsection (a), including topics of discussion and questions 

17 for digital asset intermediaries and associations rep18 resenting the digital asset industry, and setting forth not 

19 fewer than 3 public meetings for staff of the Commodity 

20 Futures Trading Commission and the Securities and Ex21 change Commission to receive public comment. The in22 terim final rule shall establish a comment period of not 

23 less than 120 days prior to publication of the report under 

24 subsection (a) and contain draft legislative text for the 


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1 creation of registered digital asset associations by Con2 gress. 

3 SEC. 808. CYBERSECURITY STANDARDS FOR DIGITAL 

4 ASSET INTERMEDIARIES. 

5 (a) DEFINITION.—In this section, the term ‘‘digital 

6 asset intermediary’’ has the meaning given the term in 

7 section 9801 of title 31, United States Code, as added by 

8 section 101 of this Act. 

9 (b) REQUIREMENT.—Not later than 18 months after 

10 the date of enactment of this Act, the Commodity Futures 

11 Trading Commission and the Securities and Exchange 

12 Commission, in consultation with the Secretary of the 

13 Treasury and the Director of the National Institute of 

14 Standards and Technology, shall develop comprehensive, 

15 principles-based guidance relating to cybersecurity for dig16 ital asset intermediaries that account for, with respect to 

17 such a digital asset intermediary— 

18 (1) the internal governance, and organizational 

19 culture, of the cybersecurity program of the digital 

20 asset intermediary; 

21 (2) security operations of the digital asset inter22 mediary, including threat identification, incident re23 sponse, and mitigation; 

24 (3) risk identification and measurement by the 

25 digital asset intermediary; 


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1 (4) the mitigation of risk by the digital asset 

2 intermediary, including policies of the digital asset 

3 intermediary, controls implemented by the digital 

4 asset intermediary, change management with respect 

5 to the digital asset intermediary, and the supply 

6 chain integrity of the digital asset intermediary; 

7 (5) assurance provided by, and testing con8 ducted by, the digital asset intermediary, including 

9 penetration testing and independent audits so con10 ducted; and 

11 (6) the potential for digital asset intermediaries 

12 to be used to facilitate illicit activities, including 

13 sanctions avoidance. 

14 SEC. 809. ADVISORY COMMITTEE ON FINANCIAL INNOVA15 TION. 

16 (a) ESTABLISHMENT.—There is established the Advi17 sory Committee on Financial Innovation (in this section 

18 referred to as the ‘‘Committee’’). 

19 (b) MEMBERSHIP.— 

20 (1) COMPOSITION.—The Committee shall be 

21 composed of 10 members, as follows: 

22 (A) 2 members appointed by the President 

23 from the financial technology industry. 

24 (B) 4 members appointed by the President 

25 with specializations in consumer protection, 


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1 consumer education, financial literacy, or finan2 cial inclusion. 

3 (C) A commissioner from the Securities 

4 and Exchange Commission, as designated by 

5 the Chair of the Commission. 

6 (D) A commissioner from the Commodity 

7 Futures Trading Commission, as designated by 

8 the Chair of the Commission. 

9 (E) A member of the Board of Governors 

10 of the Federal Reserve System, as designated 

11 by the Chair of the Board. 

12 (F) A State financial regulator, as jointly 

13 designated by the National Association of State 

14 Securities Administrators and the Conference of 

15 State Bank Supervisors. 

16 (2) POLITICAL AFFILIATION.—Not more than 4 

17 of the members of the Committee shall be from the 

18 same political party. 

19 (3) APPOINTMENT DATE.—The appointments of 

20 the members of the Committee shall be made not 

21 later than 60 days after the date of enactment of 

22 this Act. 

23 (4) PERIOD OF APPOINTMENT; VACANCIES.— 

24 (A) IN GENERAL.—A member of the Com25 mittee shall be appointed for a term of 4 years. 


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1 (B) VACANCIES.—A vacancy in the Com2 mittee— 

3 (i) shall not affect the powers of the 

4 Committee; and 

5 (ii) shall be filled in the same manner 

6 as the original appointment. 

7 (5) MEETINGS.— 

8 (A) INITIAL MEETING.—Not later than 60 

9 days after the date on which all members of the 

10 Committee have been appointed, the Committee 

11 shall hold its first meeting. 

12 (B) FREQUENCY.—The Committee shall 

13 meet at the call of the Chair. 

14 (C) QUORUM.—A majority of the members 

15 of the Committee shall constitute a quorum, but 

16 a lesser number of members may hold hearings. 

17 (6) CHAIRPERSON.—The members described in 

18 subparagraphs (C) and (D) of paragraph (1) shall 

19 alternate, on a yearly basis, as Chairperson of the 

20 Committee, with the member described in such sub21 paragraph (D) serving as the Chair for the 1-year 

22 period following establishment of the Committee. 

23 (c) DUTIES.— 

24 (1) MATTERS STUDIED.—The matters studied 

25 by the Committee shall include— 


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1 (A) digital assets; 

2 (B) consumer education and financial lit3 eracy; 

4 (C) market structure in the securities and 

5 commodities markets; 

6 (D) banking, payments and settlement; 

7 (E) consumer credit; 

8 (F) financial inclusion, including reducing 

9 the cost of financial services for all people of 

10 the United States and promoting access to 

11 those services; 

12 (G) efficiency in the financial system; 

13 (H) reduction of systemic risk; 

14 (I) competition in financial services; and 

15 (J) the State-Federal partnership in finan16 cial services regulation. 

17 (2) REPORT.—On an annual basis, or as other18 wise determined necessary by the Chair of the Com19 mittee, the Committee shall report to the President 

20 and to Congress on, and provide recommendations 

21 for legislation, regulation, and supervision relating 

22 to innovation in, the matters studied under para23 graph (1). 

24 (d) POWERS.— 


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1 (1) HEARINGS.—The Committee shall hold not 

2 less than 2 hearings per calendar year to hear from 

3 interested parties and to discuss the work of the 

4 Committee. 

5 (2) INFORMATION FROM FEDERAL AGENCIES.— 

6 (A) IN GENERAL.—The Committee may 

7 secure directly from a Federal department or 

8 agency such information as the Committee con9 siders necessary to carry out this section. 

10 (B) FURNISHING INFORMATION.—On re11 quest of the Chair of the Committee, the head 

12 of the department or agency shall furnish the 

13 information to the Committee. 

14 (3) POSTAL SERVICES.—The Committee may 

15 use the United States mails in the same manner and 

16 under the same conditions as other departments and 

17 agencies of the Federal Government. 

18 (e) COMPENSATION.— 

19 (1) IN GENERAL.—All members of the Com20 mittee shall serve without compensation in addition 

21 to that received for their services as officers or em22 ployees of the United States, and all other members 

23 of the Committee shall serve without compensation. 

24 (2) TRAVEL EXPENSES.—Each member of the 

25 Committee may be allowed travel expenses, including 


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1 per diem in lieu of subsistence, in accordance with 

2 sections 5702 and 5703 of title 5, United States 

3 Code, while away from their homes or regular places 

4 of business in performance of services for the Coun5 cil. 

6 (f) STAFF.— 

7 (1) IN GENERAL.—The Chair of the Committee 

8 may, without regard to the civil service laws (includ9 ing regulations), appoint and terminate an executive 

10 director and such other additional personnel as may 

11 be necessary to enable the Committee to perform its 

12 duties, except that the employment of an executive 

13 director shall be subject to confirmation by the Com14 mittee. 

15 (2) COMPENSATION.—The Chair of the Com16 mittee may fix the compensation of the executive di17 rector and other personnel without regard to chapter 

18 51 and subchapter III of chapter 53 of title 5, 

19 United States Code, relating to classification of posi20 tions and General Schedule pay rates, except that 

21 the rate of pay for the executive director and other 

22 personnel may not exceed the rate payable for level 

23 V of the Executive Schedule under section 5316 of 

24 that title. 


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168 

•S 4356 IS

1 (g) DETAIL OF GOVERNMENT EMPLOYEES.—A Fed2 eral Government employee may be detailed to the Com3 mittee without reimbursement, and such detail shall be 

4 without interruption or loss of civil service status or privi5 lege. 

6 (h) PROCUREMENT OF TEMPORARY AND INTERMIT7 TENT SERVICES.—The Chair of the Committee may pro8 cure temporary and intermittent services under section 

9 3109(b) of title 5, United States Code, at rates for individ10 uals that do not exceed the daily equivalent of the annual 

11 rate of basic pay prescribed for level V of the Executive 

12 Schedule under section 5316 of that title. 

13 (i) TERMINATION.—Section 14 of the Federal Advi14 sory Committee Act (5 U.S.C. App.) shall not apply to 

15 the Committee. 

16 (j) AUTHORIZATION OF APPROPRIATIONS.—There is 

17 authorized to be appropriated to the Committee to carry 

18 out this section $2,000,000 for fiscal year 2023, to remain 

19 available through fiscal year 2024. 

Æ 


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