Title: To provide for responsible financial innovation and to bring digital assets fully within the

regulatory perimeter.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.—This Act may be cited as the “Responsible Financial Innovation Act”.
(b) Table of Contents.—The table of contents for this Act is as follows:
Sec.1.Short title; table of contents.
Sec.2.Definitions.

TITLE I—DEFINITIONS
Sec.101.Definitions.

TITLE II—RESPONSIBLE TAXATION OF DIGITAL

ASSETS
Sec.201.Gain from disposition of digital assets.
Sec.202.Retirement account treatment of digital assets.
Sec.203.Rules of construction applicable to information reporting requirements imposed on
brokers with respect to digital assets.
Sec.204.Decentralized autonomous organizations.
Sec.205.Tax treatment of digital asset lending agreements.
Sec.206.Implementing effective IRS guidance.
Sec.207.Conforming amendments.

TITLE III—RESPONSIBLE SECURITIES INNOVATION

Sec.301.Securities offerings involving ancillary assets.
Sec.302.Termination of specified periodic disclosure requirements for ancillary assets.
Sec.303.Guidance relating to satisfactory control location.
Sec.304.Custody and customer protection rules.
Sec.305.Accounting treatment of digital assets.
Sec.306.Qualified custodian study.

TITLE IV—RESPONSIBLE COMMODITIES INNOVATION

Sec.401.Definitions.
Sec.402.Revision of the term “futures commission merchant”.
Sec.403.Jurisdiction over digital asset transactions.
Sec.404.Standards and examinations.
Sec.405.Commission merchants.
Sec.406.Designated contract markets for digital assets.
Sec.407.Violations generally.
Sec.408.Market reports.
Sec.409.Registered futures associations.
Sec.410.Bankruptcy treatment of digital assets.
Sec.411.Identified banking products.

TITLE V—RESPONSIBLE CONSUMER PROTECTION

Sec.501.Responsible consumer protection.

TITLE VI—RESPONSIBLE PAYMENTS INNOVATION

Sec.601.Depository institution issuance of stablecoins.
Sec.602.Study on the creation of an official digital currency by the People’s Republic of China.
Sec.603.Use of the official digital currency of the People’s Republic of China on government
devices.

TITLE VII—RESPONSIBLE BANKING INNOVATION

Sec.701.Certificate of authority to commence banking.
Sec.702.Holding company supervision of covered depository institutions.
Sec.703.Implementation rules to preserve adequate competition in payment stablecoins.
Sec.704.Financial Crimes Enforcement Network Innovation Laboratory.
Sec.705.Sanctions compliance responsibilities of payment stablecoin issuers.
Sec.706.Study on use of distributed ledger technology for reduction of risk in depository
institutions.
Sec.707.Clarifications as to eligibility for Federal Reserve services to depository institutions.
Sec.708.Transition to unique identifier for financial institutions assigned by the Board of
Governors.
Sec.709.Clarifying application review times with respect to the Federal banking agencies.
Sec.710.Examination standards for digital asset activities.
Sec.711.Asset custody for depository institutions and certain other entities.
Sec.712.Reputation risk; requirements for account termination requests and orders.
Sec.713.Conforming amendments.

TITLE VIII—RESPONSIBLE INTERAGENCY

COORDINATION
Sec.801.Timeline for interpretive guidance issued by Federal financial agencies; interstate
sandbox activities.
Sec.802.State money transmission law coordination relating to digital assets.
Sec.803.Establishment of self-regulatory organizations for digital assets.
Sec.804.Registration, rulemaking, and supervision of digital asset self-regulatory organizations.
Sec.805.Records and reports; duties and powers of self-regulatory organization.

SEC. 2. DEFINITIONS.
In this Act:
(1) ANCILLARY ASSET.—The term “ancillary asset” has the meaning given the term in
section 41 of the Securities Exchange Act of 1934, as added by section 301 of this Act.
(2) APPROPRIATE COMMISSION.—The term “appropriate commission” has the meaning given
the term in section 9806 of title 31, United States Code, as added by section 803 of this Act.
(3) COMMODITY.—The term “commodity” has the meaning given the term in section 1a of
the Commodity Exchange Act (7 U.S.C. 1a).
(4) DIGITAL ASSET; DISTRIBUTED LEDGER TECHNOLOGY; SMART CONTRACT; PAYMENT STABLECOIN;
VIRTUAL CURRENCY.—The terms “digital asset”, “distributed ledger technology”, “smart
contract”, “payment stablecoin”, and “virtual currency” have the meanings given the terms
in section 9801 of title 31, United States Code, as added by section 101 of this Act.
(5) SECURITY.—Except as otherwise expressly provided, the term “security” has the
meaning given the term in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)).
(6) SELF-REGULATORY ORGANIZATION.—The term “self-regulatory organization” means an
organization jointly registered by the Securities and Exchange Commission and Commodity
Futures Trading Commission under section 9806 of title 31, United States Code, as added
by section 803 of this Act, for the supervision of digital asset intermediaries.

TITLE I—DEFINITIONS
SEC. 101. DEFINITIONS.
(a) In General.—Subtitle VI of title 31, United States Code, is amended by adding after
chapter 97 the following:

“CHAPTER 98—DIGITAL ASSETS

“Sec.
“9801. Definitions.
“9801. Definitions
“(1) DEPOSITORY INSTITUTION.—The term ‘depository institution’ has the meaning given
the term in section 19(b)(1) of the Federal Reserve Act (12 U.S.C. 461(b)(1)).
“(2) DIGITAL ASSET.—The term ‘digital asset’
“(A) means a natively electronic asset that—
“(i) confers economic, proprietary, or access powers; and
“(ii) is recorded using cryptographically secured distributed ledger technology,
or any similar analogue; and
“(B) includes virtual currency and payment stablecoins, and may comprise other
financial assets such as ancillary assets and securities.
“(3) DIGITAL ASSET INTERMEDIARY.—The term ‘digital asset intermediary’—
“(A) means a person who holds a license, registration, or other similar authorization,
as specified by this chapter, the Commodity Exchange Act (7 U.S.C. 1 et seq.), the
Securities Act of 1933 (15 U.S.C. 77a et seq.), the Corporation of Foreign Bondholders
Act, 1933 (15 U.S.C. 77bb et seq.), the Trust Indenture Act of 1939 (15 U.S.C. 77aaa
et seq.), the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), the Securities
Investor Protection Act of 1970 (15 U.S.C. 78aaa et seq.), the Investment Company
Act of 1940 (15 U.S.C. 80a–1 et seq.), the Investment Advisers Act of 1940 (15 U.S.C.
80b–1), and the Omnibus Small Business Capital Formation Act of 1980 (15 U.S.C.
80c), that may conduct market activities relating in digital assets; and
“(B) includes a person who holds a license, registration, or other similar
authorization under State or Federal law that issues a payment stablecoin; and
“(C) does not include a depository institution, as defined in section 14A of the
Federal Deposit Insurance Act.
“(4) DISTRIBUTED LEDGER TECHNOLOGY.—The term ‘distributed ledger technology’ means a
digital ledger or database that is maintained on multiple nodes using a consensus
mechanism that facilitates a means for users to independently verify the recording and
ordering of data or any similar analogue.
“(5) PAYMENT STABLECOIN.—The term ‘payment stablecoin’ means a digital asset that—
“(A) is denominated or pegged to the value of legal tender, as described in section
5103, or in the legal tender of a foreign country (excluding cases in which a foreign
country has adopted virtual currency as legal tender);
“(B) is accompanied by a statement from the issuer, or the reasonable expectation of
users, that the denominated or pegged value set forth in subparagraph (A) will be
maintained and be available upon redemption from the issuer or another identified
person; and
“(C) derives value from or is backed by 1 or more underlying financial assets
(excluding other digital assets).
“(6) PERSON WHO PROVIDES DIGITAL ASSET SERVICES.—The term ‘person who provides digital
 asset services’ means—
“(A) a digital asset intermediary;
“(B) a financial institution, as defined in section 1a of the Commodity Exchange Act
(7 U.S.C. 1a); and
“(C) any other person or entity conducting digital asset activities pursuant to a
Federal or State charter, license, registration, or other similar authorization.
“(7) SECURITY.—The term ‘security’ has the meaning given the term in section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).
“(8) SMART CONTRACT.—The term ‘smart contract’—
“(A) means—
“(i) computer code deployed to a distributed ledger technology network that
executes an instruction based on the occurrence or nonoccurrence of specified
conditions; or
“(ii) any similar analogue; and
“(B) includes taking possession or control of a digital asset and transferring the asset
or issuing executable instructions for these actions.
“(9) VIRTUAL CURRENCY.—The term ‘virtual currency’—
“(A) means a digital asset that—
“(i) is used primarily as a medium of exchange, unit of account, store of value,
or any combination of such functions;
“(ii) is not legal tender, as described in section 5103; and
“(iii) does not derive value from or is backed by an underlying financial asset
(except other digital assets); and
“(B) includes a digital asset, consistent with subparagraph (A) that is accompanied
by a statement from the issuer, or the reasonable expectation of users, that a
denominated or pegged value will be maintained and be available upon redemption
from the issuer or other identified person, based solely on a smart contract.”.
(b) Technical and Conforming Amendment.—The table of contents for subtitle VI of title 31,
United States Code, is amended by adding at the end the following:
“98.Digital assets
9801”.

TITLE II—RESPONSIBLE TAXATION OF DIGITAL

ASSETS
SEC. 201. GAIN FROM DISPOSITION OF DIGITAL
ASSETS.
 (a) In General.—Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting after section 139I the following new section:

“SEC. 139J. GAIN FROM DISPOSITION OF DIGITAL

ASSETS.
“(a) In General.—Gross income of an individual shall not include gain, by reason of changes
in exchange rates, from the disposition of digital assets in a personal transaction (as such term is
defined in section 988(e)). The preceding sentence shall not apply if the gain which would
otherwise be recognized on the transaction exceeds $600.
“(b) Digital Asset.—For purposes of this section, the term ‘digital asset’ has the meaning
given the term in section 9801 of title 31, United States Code.”.
(b) Clerical Amendment.—The table of sections for part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after the item relating to section 139I the
following new item:
“Sec.139J.Gain from disposition of digital assets.”.
(c) Effective Date.—The amendments made by this section shall apply with respect to
transactions entered into after December 31, 2022.

SEC. 202. RETIREMENT ACCOUNT TREATMENT OF

DIGITAL ASSETS.
(a) In General.—Section 414 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new subsection:
“(aa) Rules Relating to Digital Assets.—For purposes of this part, the acquisition by—
“(1) an individual retirement account (as defined in section 408(a)), or
“(2) an individually-directed account under a plan described in section 401(a),
of a digital asset (as defined in section 9801 of title 31, United States Code) shall not be treated
as a distribution from such account.”.
(b) Effective Date.—The amendments made by this section shall apply to sales or exchanges
after December 31, 2022.

SEC. 203. RULES OF CONSTRUCTION APPLICABLE TO

INFORMATION REPORTING REQUIREMENTS IMPOSED
ON BROKERS WITH RESPECT TO DIGITAL ASSETS.
(a) In General.—Section 80603 of the Infrastructure Investment and Jobs Act is amended by
striking subsection (d) and inserting the following:
“(d) Rule of Construction.—
“(1) DEFINITION OF BROKER.—Nothing in this section or the amendments made by this
section shall be construed to create any inference that a person described in section
6045(c)(1)(D) of the Internal Revenue Code of 1986, as added by this section, includes any
 person solely engaged in the business of—
“(A) validating distributed ledger transactions,
“(B) selling hardware or software for which the sole function is to permit a person to
control private keys which are used for accessing digital assets on a distributed ledger,
or
“(C) developing digital assets or their corresponding protocols or applications for
use by other persons, provided that such other persons are not customers of the person
developing such assets, protocols, or applications.
“(2) BROKERS AND TREATMENT OF DIGITAL ASSETS.—Nothing in this section or the
amendments made by this section shall be construed to create any inference, for any period
prior to the effective date of such amendments, with respect to—
“(A) whether any person is a broker under section 6045(c)(1) of the Internal
Revenue Code of 1986, or
“(B) whether any digital asset is property which is a specified security under section
6045(g)(3)(B) of such Code.
“(e) Sense of Congress.—It is the sense of Congress that nothing in the amendments made by
this section shall be construed to have any effect on the Securities Act of 1933 (15 U.S.C. 77a et
seq.) or the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).”.
(b) Effective Date.—The amendments made by this section shall take effect as if included in
the enactment of section 80603 of the Infrastructure Investment and Jobs Act.

SEC. 204. DECENTRALIZED AUTONOMOUS

ORGANIZATIONS.
(a) In General.—Section 7701(a) of the Internal Revenue Code of 1986 is amended by adding
at the end the following new paragraph:
“(51) DECENTRALIZED AUTONOMOUS ORGANIZATIONS.—
“(A) IN GENERAL.—The default classification of a decentralized autonomous
organization shall be as a business entity which is not a disregarded entity.
“(B) CLASSIFICATION OF OTHER ACTIVITIES.—The following shall not be considered a
business activity of such organization for purposes of determining whether such
organization is described in section 501(c)(7):
“(i) Treasury management, including staking and mining of digital assets (as
defined in section 9801 of title 31, United States Code).
“(ii) Raising funds for a charitable purpose.
“(iii) Any other appropriate activity as determined by the Secretary.
“(C) DECENTRALIZED AUTONOMOUS ORGANIZATION.—The term ‘decentralized
autonomous organization’ means an organization—
“(i) which utilizes smart contracts (as defined in section 9801 of title 31, United
States Code) to effectuate collective action for a business, commercial, charitable,
 or similar entity,
“(ii) governance of which is achieved primarily on a distributed basis, and
“(iii) which is properly incorporated or organized under the laws of a State or
foreign jurisdiction as a decentralized autonomous organization or any similar
entity.”.
(b) Effective Date.—Except as provided by subsection (c), the amendments made by this
section shall apply to taxable years beginning after December 31, 2022.

SEC. 205. TAX TREATMENT OF DIGITAL ASSET

LENDING AGREEMENTS.
(a) In General.—Subsection (a) of section 1058 of the Internal Revenue Code of 1986 is
amended by striking “(as defined in section 1236(c))”.
(b) Securities.—Section 1058 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new subsection:
“(d) Securities.—For purposes of this section, the term ‘securities’ has the meaning given such
term by section 1236(c), except that such term includes any digital asset (as defined in section
9801 of title 31, United States Code) and, with respect to a digital asset, does not require a call
option.”.
(c) Rule of Construction.—Nothing in this section shall be construed to create any inference
with respect to the classification of any digital asset as security under the Securities Act of 1933
(15 U.S.C. 77a et seq.) or the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).
(d) Rulemaking Authority.—The Secretary of the Treasury (or the Secretary’s delegate) may
adopt rules to implement this section, including the application of this section to forks, airdrops,
and similar subsidiary value.

SEC. 206. IMPLEMENTING EFFECTIVE IRS GUIDANCE.

Not later than 1 year after the date of the enactment of this Act, the Secretary of the Treasury
(or the Secretary’s delegate) shall adopt final guidance relating to the following:
(1) Classification of forks, airdrops, and similar subsidiary value as taxable, contingent
upon the affirmative claim and exercise of dominion and control over the subsidiary value
by a taxpayer. Such guidance shall also permit a taxpayer to provide notification through an
annual return or other appropriate means to the Internal Revenue Service relating to the
exercise of dominion and control over, or disclaimer of, subsidiary value.
(2) Merchant acceptance of digital assets and the tax treatment of payments and receipts,
consistent with the amendments made by section 80603 of the Infrastructure Investment and
Jobs Act, as amended by section 203.
(3) Treatment of digital asset mining and staking as a production activity in which
income is not realized until disposition of the assets produced or received in connection
with such production activity, in accordance with section 451(l) of the Internal Revenue
Code of 1986 (as added by this Act).
 (4) Allowance of charitable contributions of digital assets greater than $5,000 as readily
valued property not requiring a qualified appraisal for purposes of section 170(f)(11)(A) of
the Internal Revenue Code of 1986, as amended by this Act.

SEC. 207. CONFORMING AMENDMENTS.

(a) Internal Revenue Code of 1986.—
(1) TAXABLE YEAR OF INCLUSION.—Section 451 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:
“(l) Deferral of Income Recognition for Digital Asset Activities.—In the case of a taxpayer
who conducts digital asset mining or staking activities, the amount of income relating to such
activities shall not be included in the gross income of the taxpayer until the taxable year of the
disposition of the assets produced or received in connection with the mining or staking
activities.”.
(2) CHARITABLE CONTRIBUTIONS.—Subclause (I) of section 170(f)(11)(A)(ii) of the Internal
Revenue Code of 1986 is amended by inserting “, digital assets (as defined in section 9801
of title 31, United States Code)” after “6050L(a)(2)(B))”.
(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply to taxable
years beginning after December 31, 2022.
(b) Other Conforming Amendments.—
(1) IN GENERAL.—Title 31, United States Code, is amended—
(A) in section 5312(a)(2)—
(i) by redesignating subparagraphs (A) through (Z) as clauses (i) through
(xxvi), respectively;
(ii) in the matter preceding clause (i), as so designated, by striking “‘institution’
means—” and inserting “‘institution—
“(A) means—”;
(iii) in clause (xxvi), as so designated, by striking the period at the end and
inserting “; and”; and
(iv) by adding at the end the following:
“(B) does not include a decentralized autonomous organization, as defined in section
7701(a) of the Internal Revenue Code of 1986.”; and
(B) in section 5336(a)(11)(B)(2)—
(i) by redesignating clause (xxv) as clause (xxvi); and
(ii) by adding after clause (xxv) the following:
“(xxv) A decentralized autonomous organization, as defined in section 7701(a)
of the Internal Revenue Code of 1986; and”.
(2) ANTI-MONEY LAUNDERING ACT OF 2020.—Section 6110(a) of the Anti-Money
Laundering Act of 2020 (division F of Public Law 116–283) is amended by striking
 paragraph (1) and inserting the following:
“(A) by redesignating clauses (xxv) and (xxvi) as clauses (xxvi) and (xxvii),
respectively, and adjust the margins accordingly; and
“(B) by inserting after clause (xxiv) the following:
“‘(Y) a person engaged in the trade of antiquities, including an advisor, consultant,
or any other person who engages as a business in the solicitation or the sale of
antiquities, subject to regulations prescribed by the Secretary;’.”.

TITLE III—RESPONSIBLE SECURITIES INNOVATION

SEC. 301. SECURITIES OFFERINGS INVOLVING
ANCILLARY ASSETS.
Title I of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by adding at
the end the following:

“SEC. 41. SECURITIES OFFERINGS INVOLVING

ANCILLARY ASSETS.
“(a) Definitions.—In this section:
“(1) ANCILLARY ASSET.—
“(A) IN GENERAL.—The term ‘ancillary asset’—
“(i) means an intangible asset that is offered, sold, or otherwise provided to a
person in connection with the purchase and sale of a security through an
arrangement or scheme that constitutes an investment contract, as that term is
used in section 2(a)(1) of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)); and
“(ii) may include a digital asset, as defined in section 9801 of title 31, United
States Code, that is used to facilitate the governance of a distributed ledger
technology network or decentralized autonomous organization.
“(B) EXCLUSION.—Except as provided in subparagraph (A)(ii), the term ‘ancillary
asset’ does not include an asset that provides the holder of the asset with any of the
following rights in a business entity:
“(i) Voting rights with respect to that entity.
“(ii) Rights to interest, dividend payments, or profits with respect to that entity.
“(iii) A debt or equity interest in that entity.
“(iv) Liquidation rights with respect to that entity.
“(2) FOREIGN PRIVATE ISSUER.—The term ‘foreign private issuer’ means a foreign issuer,
other than a foreign government, except that the term does not include a foreign issuer that,
as of the last business day of the most recently completed fiscal quarter of the issuer,
satisfies the following conditions:
“(A) More than 50 percent of the outstanding voting securities of the issuer are
 directly or indirectly owned by residents of the United States.
“(B) Any of the following:
“(i) The majority of the executive officers or directors of the issuer are citizens
or residents of the United States.
“(ii) More than 50 percent of the assets of the issuer are located in the United
States.
“(iii) The business of the issuer is principally administered in the United States.
“(3) SELF-REGULATORY ORGANIZATION.—The term ‘self-regulatory organization’, in addition
to an organization described in section 3(a)(26), includes a self-regulatory organization, as
that term is defined in section 2 of the Responsible Financial Innovation Act.
“(b) Disclosure Requirements.—
“(1) INITIAL COMPLIANCE WITH SPECIFIED PERIODIC DISCLOSURE REQUIREMENTS.—Subject to
paragraphs (4) and (5), an issuer engaged in business in or affecting interstate commerce, or
that is organized outside of the United States and is not a foreign private issuer, that offers,
sells, or otherwise provides a security through an arrangement or scheme that constitutes an
investment contract, as that term is used in section 2(a)(1) of the Securities Act of 1933 (15
U.S.C. 77b(a)(1)), and that provides or proposes to provide any holder of the security with
an ancillary asset, shall be subject to the periodic disclosure requirements under subsection
(c) for the 1-year period beginning on the date that is 180 days after the first date on which
the security is offered, sold, or otherwise provided by the issuer, if—
“(A) the average daily aggregate value of all ancillary assets offered, sold, or
otherwise provided by the issuer in relation to the offer, sale, or provision of the
security in all spot markets open to the public in the United States (based on the
knowledge of the issuer after due inquiry) is greater than $5,000,000 for the 180-day
period immediately succeeding the date of that first offer, sale, or provision; and
“(B) during the 180-day period described in subparagraph (A), the issuer, or a
person affiliated with the issuer, has engaged in entrepreneurial or managerial efforts
that primarily determined the value of the ancillary asset.
“(2) ONGOING COMPLIANCE WITH SPECIFIED PERIODIC DISCLOSURE REQUIREMENTS.—Subject to
paragraphs (4) and (5), an issuer that is engaged in business in or affecting interstate
commerce, or that is organized outside of the United States and is not a foreign private
issuer, that offers, sells, or otherwise provides a security through an arrangement or scheme
that constitutes an investment contract, as that term is used in section 2(a)(1) of the
Securities Act of 1933 (15 U.S.C. 77b(a)(1)), and that provides the holder of the security
with an ancillary asset in connection with the acquisition of the security, shall be subject to
the periodic disclosure requirements under subsection (c) for a given fiscal year of that
issuer, if, in the immediately preceding fiscal year of the issuer (or any portion thereof)—
“(A) the average daily aggregate value of all trading in the ancillary asset in all spot
markets open to the public in the United States was greater than $5,000,000, based on
the knowledge of the issuer after due inquiry; and
“(B) the issuer, or any person owning not less than 10 percent of any class of equity
 securities of the issuer, engaged in entrepreneurial or managerial efforts that primarily
determined the value of the ancillary asset.
“(3) TRANSITION RULE.—Subject to paragraphs (4) and (5), an issuer that is engaged in
business in or affecting interstate commerce, or that is organized outside of the United
States and is not a foreign private issuer, that offers, sells, or otherwise provides a security
through an arrangement or scheme that constitutes an investment contract, as that term is
used in section 2(a)(1) of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)), and that
provides the holder of the security with an ancillary asset before January 1, 2023, in
connection with the acquisition of the security shall be subject to the periodic disclosure
requirements under subsection (c) beginning in the first fiscal year of the issuer that begins
on or after that date, if, in the immediately preceding fiscal year of the issuer—
“(A) the average daily aggregate value of trading in the ancillary asset in all spot
markets open to the public for which trading volume is generally available was greater
than $5,000,000, based on the knowledge of the issuer after due inquiry; and
“(B) the issuer, or any person owning not less than 10 percent of any class of equity
securities of the issuer, engaged in entrepreneurial or managerial efforts that primarily
determined the value of the ancillary asset.
“(4) TREATMENT OF ANCILLARY ASSETS.—
“(A) IN GENERAL.—Notwithstanding any other provision of law, if an issuer issues a
security through an arrangement or scheme that constitutes an investment contract, as
that term is used in section 2(a)(1) of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)),
is subject to paragraph (1), (2), or (3), and is in compliance with the periodic disclosure
requirements under subsection (c), an ancillary asset provided directly or indirectly by
the issuer shall be presumed not to be a security under—
“(i) section 3(a);
“(ii) such section 2(a)(1);
“(iii) section 2(a) of the Investment Company Act of 1940 (15 U.S.C.
80a–2(a));
“(iv) section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C.
80b–2(a)); or
“(v) any applicable provision of State law.
“(B) OTHER PERSONS.—For the purposes of subparagraph (A), no person other than
an issuer described in that subparagraph, an affiliate of such an issuer (including a
person that acquires an ancillary asset from such an issuer for the purpose of resale or
distribution of the ancillary asset), or a person acting at the direction or on the behalf of
such an issuer shall be required to treat an ancillary asset provided by such an issuer as
a security under this Act or any provision of law described in that subparagraph.
“(C) EXCEPTION.—Consistent with section 9807 of title 31, United States Code, this
paragraph shall not apply to an ancillary asset if the Commission or a court of the
United States of competent jurisdiction, after public notice, comment, and a hearing (in
the case of the Commission) or an appropriate proceeding (in the case of a court of
 competent jurisdiction), issues a public order finding that there is not a substantial
basis for the presumption that the ancillary asset is not a security under subparagraph
(A) or (B).
“(5) CALCULATION.—For the purposes of paragraphs (1), (2), and (3), the calculation of
daily aggregate value shall be based on data disclosed by spot markets or otherwise
available to the public for inspection.
“(c) Specified Periodic Disclosure Requirements.—If an issuer is subject to paragraph (1), (2),
or (3) of subsection (b), the issuer shall furnish to the Commission, and any applicable
self-regulatory organization of which the issuer is a member, on a semi-annual basis, information
that the Commission or self-regulatory organization may, by rule, require relating to the issuer
and any relevant ancillary asset, as necessary or appropriate in the public interest or for the
protection of investors, which shall be exclusively comprised of the following:
“(1) Basic corporate information regarding the issuer, including the following:
“(A) The experience of the issuer in developing assets similar to the ancillary asset.
“(B) If the issuer has previously provided ancillary assets to purchasers of securities,
information on the subsequent history of those previously provided ancillary assets,
including price history, if the information is publicly available.
“(C) A statement by the issuer that, after consultation with counsel, and, as
applicable, a self-regulatory organization, the issuer has a reasonable basis for
concluding that the asset is not a security under this section and the Securities Act of
1933 (15 U.S.C. 77a et seq.).
“(D) The activities that the issuer has taken in the relevant disclosure period, and is
projecting to take in the 1-year period following the submission of the disclosure, with
respect to promoting the use, value, or resale of the ancillary asset (including any
activity to facilitate the creation or maintenance of a trading market for the ancillary
asset and any network or system that utilizes the ancillary asset).
“(E) The anticipated cost of the activities of the issuer in subparagraph (D) and
whether the issuer has unencumbered, liquid funds equal to that amount.
“(F) To the extent the ancillary asset involves the use of a particular technology, the
experience of the issuer with the use of that technology.
“(G) The backgrounds of the board of directors (or equivalent body), senior
management, and key employees of the issuer, the experience or functions of whom
are material to the value of the ancillary asset, as well as any personnel changes
relating to the issuer during the period covered by the disclosure.
“(H) A description of the assets and liabilities of the issuer, to the extent material to
the value of the ancillary asset.
“(I) A description of any legal proceedings in which the issuer is engaged (including
inquiries by governmental agencies into the activities of the issuer), to the extent
material to the value of the ancillary asset.
“(J) Risk factors relating to the impact of the issuer on, or unique knowledge relating
to, the value of the ancillary asset.
 “(K) Information relating to ownership of the ancillary asset by—
“(i) persons owning not less than 10 percent of any class of equity security of
the issuer; and
“(ii) the management of the issuer.
“(L) Information relating to transactions involving the ancillary asset by the issuer
with related persons, promoters, and control persons.
“(M) Recent sales or similar dispositions of ancillary assets by the issuer and
affiliates of the issuer.
“(N) Purchases or similar dispositions of ancillary assets by the issuer and affiliates
of the issuer.
“(O) A going concern statement from the chief financial officer of the issuer or
equivalent official, signed under penalty of perjury, stating whether the issuer
maintains the financial resources to continue business as a going concern for the 1-year
period following the submission of the disclosure, absent a material change in
circumstances.
“(2) Information relating to the ancillary asset, including the following:
“(A) A general description of the ancillary asset, including the standard unit of
measure with respect to the ancillary asset, the intended or known functionality and
uses of the ancillary asset, the market for the ancillary asset, other assets or services
that may compete with the ancillary asset, and the total supply of the ancillary asset or
the manner and rate of the ongoing production or creation of the ancillary asset.
“(B) If ancillary assets have been offered, sold, or otherwise provided by the issuer
to investors, intermediaries, or resellers, a description of the amount of assets offered,
sold, or provided, the terms of each such transaction, and any contractual or other
restrictions on the resale of the assets by intermediaries.
“(C) If ancillary assets were distributed without charge, a description of each
distribution, including the identity of any recipient that received more than 5 percent of
the total amount of the ancillary assets in any such distribution.
“(D) The amount of ancillary assets owned by the issuer.
“(E) For the 1-year period following the submission of the disclosure, a description
of the plans of the issuer to support (or to cease supporting) the use or development of
the ancillary asset, including markets for the ancillary asset and each platform or
system that uses the ancillary asset.
“(F) Each third party not affiliated with the issuer, the activities of which may have a
material impact on the value of the ancillary asset.
“(G) Risk factors known to the issuer that may limit demand for, or interest in, the
ancillary asset.
“(H) The names and locations of the markets in which the ancillary asset is known
by the issuer to be available for sale or purchase.
“(I) To the extent available to the issuer, the average daily price for a constant unit of
 value of the ancillary asset during the relevant reporting period, as well as the
12-month high and low prices for the ancillary asset.
“(J) If applicable, information relating to any external audit of the code and
functionality of the ancillary asset, including the entity performing the audit and the
experience of the entity in conducting similar audits.
“(K) If applicable, any third-party valuation report or economic analysis regarding
the ancillary asset or the projected market of the ancillary asset, which shall include the
entity performing the valuation or analysis and the experience of the entity in
conducting similar reports or analyses.
“(L) If the ancillary asset is tangible, information relating to the cost and availability
of storage and transportation for the ancillary asset, pending use.
“(M) If the ancillary asset is intangible, information relating to custody or
safekeeping by the owner of the ancillary asset or a third party.
“(N) Information on intellectual property rights claimed or disputed relating to the
ancillary asset.
“(O) A description of the technology underlying the ancillary asset.
“(P) Any material tax considerations applicable to owning, storing, using, or trading
the ancillary asset.
“(Q) Any material legal or regulatory considerations applicable to owning, storing,
using, or trading the ancillary asset, including any legal proceeding that may impact
the value of the ancillary asset.
“(R) Any other material factor or information that may impact the value of the
ancillary asset and about which the issuer is reasonably aware.
“(d) Application to Successor Entities.—If an issuer would otherwise be subject to specified
periodic disclosure requirements under subsection (c) and is no longer in operation, any
successor entity that directly or indirectly received not less than 50 percent of the proceeds raised
by the sale of the related securities of that issuer, and that is engaged in entrepreneurial or
managerial efforts that primarily determine the value of the applicable ancillary asset, shall
furnish to the Commission the information required under that subsection.
“(e) Voluntary Disclosure.—An issuer that is not subject to the specified periodic disclosure
requirements under subsection (c) and that offers or sells a security through an arrangement or
scheme that constitutes an investment contract, as that term is used in section 2(a)(1) of the
Securities Act of 1933 (15 U.S.C. 77b(a)(1)), and that provides the holder of that security with an
ancillary asset in connection with the acquisition of the security may voluntarily furnish to the
Commission the information required under that subsection if the issuer believes that it is
reasonably likely that the issuer will become subject to those requirements in the future.”.

SEC. 302. TERMINATION OF SPECIFIED PERIODIC

DISCLOSURE REQUIREMENTS FOR ANCILLARY
ASSETS.
 Section 41 of the Securities Exchange Act of 1934, as added by section 301 of this Act, is
amended by adding at the end the following:
“(f) Termination of Specified Periodic Disclosure Requirements.—
“(1) IN GENERAL.—The obligation of an issuer to furnish the information required under
subsection (c) shall terminate on the date that is 90 days, or such shorter period as the
Commission may determine, after the date on which the issuer files a certification described
in paragraph (2)—
“(A) with the applicable self-regulatory organization or the Commission; and
“(B) that has not been denied under this subsection.
“(2) CERTIFICATION.—
“(A) IN GENERAL.—A certification filed under paragraph (1) shall be supported by
reasonable evidence, based on the knowledge of the issuer filing the certification, after
due inquiry, that—
“(i) the average daily aggregate value of all trading in the applicable ancillary
asset in all spot markets open to the public in the United States in the 12-month
period preceding the date on which the certification is filed was not greater than
$5,000,000; or
“(ii) during the 12-month period preceding the date on which the certification is
filed, neither the applicable issuer, nor any person owning not less than 10 percent
of any class of equity securities of the issuer, engaged in entrepreneurial or
managerial efforts that primarily determined the value of the ancillary asset.
“(B) DENIAL.—
“(i) IN GENERAL.—Subject to subparagraph (C)(ii), an applicable self-regulatory
organization or the Commission, as applicable, may, after notice and opportunity
for hearing, deny a certification filed under paragraph (1) if the self-regulatory
organization or the Commission finds that the certification is not supported by
reasonable evidence.
“(ii) EFFECT.—The denial, under clause (i), of a certification filed under
paragraph (1)—
“(I) shall terminate the certification so filed; and
“(II) shall not prevent the applicable issuer from filing another
certification under paragraph (1), if the re-filed certification is filed not
earlier than 180 days after the date on which the original certification is
denied.
“(C) PENDING STATUS.—
“(i) IN GENERAL.—Termination of the disclosure requirements described in
paragraph (1) applicable to an issuer that has filed a certification under that
paragraph shall be deferred pending review by a self-regulatory organization or
the Commission, as applicable, of the evidence supporting the certification.
“(ii) EFFECT OF DELAY.—If, as of the date that is 90 days after receiving a
 certification filed under paragraph (1), the Commission or a self-regulatory
organization has not requested additional evidence with respect to the certification
from the applicable issuer, the disclosure obligations that are the subject of the
certification shall terminate.”.

SEC. 303. GUIDANCE RELATING TO SATISFACTORY

CONTROL LOCATION.
Not later than 180 days after the date of the enactment of this Act, the Securities and Exchange
Commission (referred to in this title as the “Commission”) shall issue guidance relating to
section 240.15c3–3 of title 17, Code of Federal Regulations, or any successor regulation,
providing that the requirement to designate a satisfactory control location for a digital asset that
is, or may represent ownership of, a security may be satisfied by protecting the digital asset
through commercially reasonable cybersecurity practices to maintain exclusive control of
sufficient private key material to transfer control of the digital asset to another person, or to cause
another person to obtain control of the digital asset, including by means of a smart contract that
generates private key material without the involvement of a natural person.

SEC. 304. CUSTODY AND CUSTOMER PROTECTION

RULES.
(a) In General.—
(1) MODERNIZATION OF EXISTING RULES AND ADOPTION OF NEW RULES.—Not later than 18
months after the date of enactment of this Act, the Commission shall—
(A) complete the multi-year study of the Commission with respect to the
modernization of the rules of the Commission relating to customer protection and
custody of securities, digital assets, and client funds; and
(B) consistent with the results of the study described in subparagraph (A), adopt
final rules relating to the issues described in paragraph (2).
(2) CONTENTS.—The final rules adopted under paragraph (1)(B) shall address the
following concepts:
(A) Investor protection and education with respect to digital assets.
(B) Digital assets, distributed ledger technology, and use of collaborative custody or
multi-signature arrangements, including distribution of private key material and
resulting obligations.
(C) Changes in market structure and asset characteristics, including disuse of
physical securities and assets and appropriate custodial methods for electronically
native assets.
(D) Reduction of regulatory burden.
(E) Use of technology to facilitate regulatory compliance and risk management.
(F) Parity of State- and nationally-chartered banks, as defined in section 202(a) of
the Investment Advisers Act of 1940 (15 U.S.C. 80b–2(a)), with respect to asset
 custody in a manner consistent with that Act (15 U.S.C. 80b–1 et seq.) and other
existing law.
(G) Standards under which an issuer of an unregistered digital asset that is, or may
represent ownership of, a security is not required to utilize a registered transfer agent.
(b) Digital Assets and Securities.—Not later than 270 days after the date of enactment of this
Act, the Commission shall adopt final guidance permitting, for the purposes of section
240.15c3–3(b) of title 17, Code of Federal Regulations, or any successor regulation, a broker or a
dealer to perform, within the same legal entity, both trading and custodial activities relating to
fully-paid and excess margin digital assets, including virtual currency and digital assets that are
securities or may represent ownership of securities, in addition to traditional securities, client
funds, and other assets permitted by the Commission to be within the control of a broker or
dealer.

SEC. 305. ACCOUNTING TREATMENT OF DIGITAL

ASSETS.
Not later than 270 days after the date of enactment of this Act, the standard setting body
referred to in section 109(a) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7219(a)) shall issue
accounting standards to provide an appropriate, alternative, and optional treatment—
(1) for digital assets that, as of that date of enactment, are classified as indefinite-lived
intangible assets; and
(2) that provides an accurate mark-to-market valuation of the digital assets described in
paragraph (1).

SEC. 306. QUALIFIED CUSTODIAN STUDY.

(a) In General.—The Commission, in consultation with Federal and State banking supervisors,
shall carry out a study to examine the extent to which financial institutions engaged in digital
asset activities are complying with all legal requirements as qualified custodians under section
275.206(4)–2 of title 17, Code of Federal Regulations, or any successor regulation, and other
provisions of securities and banking law.
(b) Report.—Not later than 1 year after the date of enactment of this Act, the Commission
shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives a confidential report relating
to the findings of the Commission in carrying out the study required under subsection (a).

TITLE IV—RESPONSIBLE COMMODITIES INNOVATION

SEC. 401. DEFINITIONS.
Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended—
(1) in paragraph (9), by striking “and frozen concentrated orange juice” and inserting
“frozen concentrated orange juice, and a digital asset (consistent with section 2(c))”;
(2) in paragraph (12)(A)(i)—
 (A) in subclause (I), by inserting “digital asset (consistent with section 2(c)),” after
“sale of a”; and
(B) in subclause (II), by inserting a semicolon at the end;
(3) by inserting after paragraph (15) the following:
“(15A) DIGITAL ASSET.—
“(A) IN GENERAL.—The term ‘digital asset’ has the meaning given the term in section
9801 of title 31, United States Code.
“(B) EXCLUSION.—The term ‘digital asset’ does not include a security (as defined in
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))).”;
(4) in paragraph (28)(A)(i)(I)(aa)—
(A) in subitem (EE), by striking “or” at the end; and
(B) by adding at the end the following:
“(GG) a digital asset, consistent with section 2(c); or”; and
(5) in paragraph (31)(A)(i)(I)—
(A) in item (cc), by striking “or” at the end;
(B) in item (dd), by striking “and” at the end and inserting “or”; and
(C) by adding at the end the following:
“(ee) a digital asset, consistent with section 2(c); and”.

SEC. 402. REVISION OF THE TERM “FUTURES

COMMISSION MERCHANT”.
(a) In General.—The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended—
(1) by striking “futures commission merchant” each place it appears and inserting
“commission merchant”;
(2) by striking “futures commission merchants” each place it appears and inserting
“commission merchants”;
(3) by striking “futures commission merchant’s” each place it appears and inserting
“commission merchant’s”;
(4) in section 1a(28) (7 U.S.C. 1a(28)), in the paragraph heading, by striking “FUTURES
COMMISSION MERCHANT” and inserting “COMMISSION MERCHANT”; and
(5) in section 4s(e)(3)(B)(ii) (7 U.S.C. 6s(e)(3)(B)(ii)), in the clause heading, by striking
“FUTURES COMMISSION MERCHANT” and inserting “COMMISSION MERCHANT”.
(b) Other References.—Any reference in any provision of law to a “futures commission
merchant” shall be deemed to be a reference to a “commission merchant”.

SEC. 403. JURISDICTION OVER DIGITAL ASSET

TRANSACTIONS.
(a) Commission Jurisdiction.—Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C.
2(c)(2)) is amended—
(1) in subparagraph (D)(ii)—
(A) in subclause (III), in the matter preceding item (aa), by inserting “of a
commodity, other than a digital asset,” before “that”;
(B) by redesignating subclauses (IV) and (V) as subclauses (V) and (VI),
respectively; and
(C) by inserting after subclause (III) the following:
“(IV) any contract of sale of a digital asset that—
“(aa) results in actual delivery within 2 days or such other period as
the Commission may determine by rule based on the typical commercial
practice in cash or spot markets for the digital asset involved; or
“(bb) complies with paragraphs (1) through (3) of section 4(a);”; and
(2) by adding at the end the following:
“(F) JURISDICTION OVER DIGITAL ASSETS.—
“(i) IN GENERAL.—Except as otherwise provided by this section, the
Commission shall have exclusive jurisdiction over any agreement, contract, or
transaction involving a contract of sale of a digital asset that is offered, solicited,
traded, executed, or otherwise dealt in interstate commerce, including market
activities relating to ancillary assets (as defined in section 41(a) of the Securities
Exchange Act of 1934), except that specified periodic reporting requirements
made by an issuer pursuant to that section and the underlying security with
respect to the ancillary asset that constitutes an investment contract (within the
meaning of section 2(a)(1) of the Securities Act of 1933 (15 U.S.C. 77b(a)(1)))
shall remain within the jurisdiction of the Securities and Exchange Commission.
“(ii) LIMITATION.—Other than pursuant to sections 4b, 4c, and 6(c), the
Commission shall not exercise jurisdiction over a contract of sale of a digital asset
that is not a fungible commodity.
“(iii) EXEMPTION FROM REGISTRATION.—A financial institution shall be exempt
from registering as a commission merchant with respect to digital asset activities
under this Act if the financial institution—
“(I) limits its digital asset activities to off-balance sheet activities on behalf
of a customer, on a spot basis;
“(II) is regularly examined by a Federal or State banking supervisor with
respect to its digital asset activities; and
“(III) files with the Commission a notice—
“(aa) in such form as the Commission, by rule, may prescribe; and
 “(bb) containing such information as the Commission, by rule, may
prescribe as necessary or appropriate in the public interest or for the
protection of customers.
“(iv) RULES AND ORDERS.—Consistent with this Act, the Commission, in
consultation with the Securities and Exchange Commission, shall issue such rules
or orders as are necessary to avoid duplicative or conflicting rules relating to
supervision of digital asset markets applicable to—
“(I) a registered person; or
“(II) a person registered under the laws under which—
“(aa) the Securities and Exchange Commission has jurisdiction; or
“(bb) any other Federal or State agency, futures association, or
self-regulatory organization has jurisdiction.”.
(b) Contracts Designed to Defraud or Mislead.—Section 4b of the Commodity Exchange Act
(7 U.S.C. 6b) is amended by adding at the end the following:
“(f) Applicability to Digital Assets.—This section shall apply to any agreement, contract, or
transaction in a digital asset as if the agreement, contract, or transaction were a contract of sale of
a commodity for future delivery.”.
(c) Prohibited Transactions.—Section 4c of the Commodity Exchange Act (7 U.S.C. 6c) is
amended by adding at the end the following:
“(h) Applicability to Digital Assets.—This section shall apply to any agreement, contract, or
transaction in a digital asset as if the agreement, contract, or transaction were a contract of sale of
a commodity for future delivery.”.
(d) Prohibition Regarding Manipulation and False Information.—Section 6(c) of the
Commodity Exchange Act (7 U.S.C. 9) is amended by adding at the end the following:
“(12) APPLICABILITY TO DIGITAL ASSETS.—This subsection shall apply to any agreement,
contract, or transaction in a digital asset as if the agreement, contract, or transaction were a
contract of sale of a commodity for future delivery.”.

SEC. 404. STANDARDS AND EXAMINATIONS.

Section 4p(a) of the Commodity Exchange Act (7 U.S.C. 6p(a)) is amended, in the third
sentence, by inserting “applicable self-regulatory organizations registered under section 9806 of
title 31, United States Code,” after “contract markets,”.

SEC. 405. COMMISSION MERCHANTS.

(a) Dealing by Unregistered Commission Merchants or Introducing Merchants
Prohibited.—Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended—
(1) in subsection (a)(2)—
(A) by inserting “digital assets,” after “securities,” each place it appears; and
(B) by inserting “execute,” after “guarantee,” each place it appears;
 (2) in subsection (b)—
(A) by inserting “digital assets,” after “securities,” each place it appears; and
(B) by striking “paragraph (2) of this section” and inserting “subsection (a)(2)”; and
(3) in subsection (h), in the first sentence, by striking “securities or” and inserting
“securities, digital assets, or”.
(b) Registration of Commission Merchants, Introducing Brokers, and Floor Brokers.—Section
4f of the Commodity Exchange Act (7 U.S.C. 6f) is amended—
(1) in subsection (a)(2)(D), by inserting “or an applicable self-regulatory organization
registered under section 9806 of title 31, United States Code” before the period at the end;
and
(2) in subsection (b), in the proviso—
(A) by striking “a contract market or” and inserting “a contract market, an applicable
self-regulatory organization registered under section 9806 of title 31, United States
Code, or a”; and
(B) by striking “such contract market” and inserting “such contract market,
self-regulatory organization,”.
(c) Reporting and Recordkeeping.—Section 4g of the Commodity Exchange Act (7 U.S.C. 6g)
is amended—
(1) in subsection (a)—
(A) by inserting “digital assets or” before “commodities”; and
(B) by inserting “, an applicable self-regulatory organization registered under section
9806 of title 31, United States Code,” before “or the United”; and
(2) in subsection (d), in the second sentence, by striking “commodity futures.” and
inserting “commodities.”.
(d) Use of Mails or Other Means or Instrumentalities of Interstate Commerce by Commodity
Trading Advisors and Commodity Pool Operators.—Section 4m(3) of the Commodity Exchange
Act (7 U.S.C. 6m(3)) is amended—
(1) in subparagraph (A), by inserting “or digital assets” before the period at the end; and
(2) in subparagraph (B), by inserting “or digital assets” after “commodity interests” each
place it appears.
(e) Registration of Commodity Trading Advisors and Commodity Pool Operators.—Section
4n(3) of the Commodity Exchange Act (7 U.S.C. 6n(3)) is amended—
(1) in subparagraph (A), in the second sentence, by inserting “, an applicable
self-regulatory organization registered under section 9806 of title 31, United States Code,”
before “or the Department”; and
(2) in subparagraph (B), by striking “futures market”.

SEC. 406. DESIGNATED CONTRACT MARKETS FOR

DIGITAL ASSETS.
(a) In General.—The Commodity Exchange Act is amended by inserting after section 5h (7
U.S.C. 7b–3) the following:

“SEC. 5i. DESIGNATED CONTRACT MARKETS FOR

DIGITAL ASSETS.
“(a) Definitions.—In this section:
“(1) DESIGNATED CONTRACT MARKET.—The term ‘designated contract market’ means a
contract market designated under this section.
“(2) SELF-REGULATORY ORGANIZATION.—The term ‘self-regulatory organization’ means a
self-regulatory organization registered under section 9806 of title 31, United States Code.
“(b) Designation.—A board of trade primarily engaged in digital asset activities, or intended
to be so engaged, as determined by the Commission, that permits trading by retail customers and
that may maintain custody of customer funds, digital assets, securities, or other property to
facilitate customer trading activity, may apply for designation as a contract market under this
section.
“(c) Member of Self-regulatory Organization.—On designation as a contract market under this
section, the designated contract market shall become a member of a self-regulatory organization.
“(d) Applicability of Laws.—
“(1) IN GENERAL.—Section 5 and all other provisions of law applicable to contract markets
shall apply to a designated contract market, except that the applicable self-regulatory
organization shall perform the investigatory and disciplinary functions with respect to the
designated contract market under section 5.
“(2) RETENTION AND PROVISION OF INFORMATION.—A designated contract market shall—
“(A) retain information that may be used in establishing whether rule violations have
occurred; and
“(B) provide information relating to possible violations to the applicable
self-regulatory organization.
“(e) Access to Market.—A designated contract market—
“(1) shall provide market participants, including retail customers, with impartial access to
the market;
“(2) may make trading data freely accessible to the public under rules established by the
Commission or an applicable self-regulatory organization; and
“(3) shall maintain a competitive, open, and efficient market for executing transactions
that protects the price discovery process of trading on the market.
“(f) Contracts Not Readily Subject to Manipulation.—For purposes of section 5(d)(3), the
following shall apply:
“(1) Prior to permitting a digital asset to be traded, a designated contract market shall—
 “(A) make a written determination of whether the digital asset is readily susceptible
to manipulation; and
“(B) provide to the Commission and an applicable self-regulatory organization data
supporting that determination.
“(2) In making a written determination under paragraph (1), a designated contract market
shall consider the following with respect to the digital asset:
“(A) The purpose and use of the digital asset.
“(B) Governance structure, including participation.
“(C) Distribution, market depth, market volume, and volatility.
“(D) Intended, current, and proposed functionality.
“(E) If applicable, specified periodic disclosure requirements with respect to an
ancillary asset under section 41 of the Securities Exchange Act of 1934.
“(F) Other material factors specified by the Commission, an applicable
self-regulatory organization, or the designated contract market.
“(g) Customer Assets.—
“(1) REQUIRED STANDARDS.—
“(A) IN GENERAL.—Each designated contract market shall establish standards and
procedures that are designed to protect and ensure the safety of customer funds, digital
assets, securities, and other property.
“(B) CUSTODIAL SERVICES.—A designated contract market may—
“(i) provide custodial services for customer funds, digital assets, securities, and
other property consistent with this section; or
“(ii) permit a depository institution or non-depository trust company to provide
the custodial services described in clause (i).
“(C) COMMISSION ORDER.—The Commission may, by order and for good cause with
respect to a particular designated contract market, require the use of a depository
institution or non-depository trust company for custodial services as described in
subparagraph (B)(ii).
“(D) COMMISSION RULE.—The Commission shall, by rule, permit the use of a
depository institution or non-depository trust company that is an affiliate of a
designated contract market to provide custodial services as described in subparagraph
(B)(ii) under conditions specified in the rule.
“(2) CUSTODY OF CUSTOMER ASSETS.—
“(A) IN GENERAL.—A designated contract market shall maintain possession and
control of customer funds, digital assets, securities, and other property in such a
manner as to minimize the risk of loss or unreasonable delay in the access to the funds,
digital assets, securities, and property of the customer.
“(B) SEGREGATION OF FUNDS.—
 “(i) IN GENERAL.—A designated contract market shall manage all funds, digital
assets, securities, and other property of a customer as belonging to the customer.
“(ii) COMMINGLING PROHIBITED.—Customer funds, digital assets, securities, and
other property shall be separately accounted for and may not be—
“(I) commingled with the funds of the designated contract market; or
“(II) used to margin, secure, or guarantee any trades or accounts of any
other customer.
“(3) PERMISSIBLE INVESTMENTS.—Subject to such conditions as the Commission may
prescribe, customer funds under the custody of a designated contract market may be
invested in—
“(A) obligations of the United States;
“(B) general obligations of any State or of any political subdivision of a State;
“(C) obligations fully guaranteed as to principal and interest by the United States; or
“(D) any other investment determined by the Commission to be permissible.
“(4) CUSTOMER PROPERTY.—Customer funds, digital assets, securities, and property shall
be considered to be customer property (as defined in section 761 of title 11, United States
Code), with respect to all funds, digital assets, securities, and other property of a customer
received by a designated contract market—
“(A) for trading or custody; or
“(B) to margin, guarantee, or secure digital asset transactions (including funds,
digital assets, securities, or other property accruing to the customer as the result of
those transactions).
“(5) MISUSE OF CUSTOMER ASSETS.—A designated contract market or financial institution
that has received customer funds, digital assets, securities, or other property for trading or
custody may not dispose of that property without the written permission of the customer.
“(h) Implementation.—The Commission may adopt rules to implement this section, which
may be delegated to an applicable self-regulatory organization.”.
(b) Delegation of Functions Under Core Principles.—Section 5c(b) of the Commodity
Exchange Act (7 U.S.C. 7a–2(b)) is amended by adding at the end the following:
“(4) DIGITAL ASSET ACTIVITIES.—A contract market primarily engaged in digital asset
activities may delegate any relevant function to an applicable self-regulatory organization
registered under section 9806 of title 31, United States Code.”.
(c) Telemarketing Rules.—Section 6(f)(1) of the Commodity Exchange Act (7 U.S.C. 9b(1)) is
amended by inserting “or applicable self-regulatory organization registered under section 9806 of
title 31, United States Code,” after “registered futures association”.
(d) Registration of Commodity Dealers and Associated Persons.—Section 8a of the
Commodity Exchange Act (7 U.S.C. 12a) is amended—
(1) in paragraph (2)—
 (A) in subparagraph (C)(ii)—
(i) by striking “securities or property” and inserting “securities, digital assets,
or property”; and
(ii) by inserting “a digital asset or” after “contracts of sale of”;
(B) in subparagraph (D)—
(i) in clause (i), by inserting “a digital asset or” after “contract of sale of”;
(ii) in clause (iii), by striking “securities or property” and inserting “securities,
digital assets, or property”; and
(iii) in clause (iv), by striking “Code, or section 7201 or 7206 of the Internal
Revenue Code of 1986;” and inserting “Code;”;
(C) in subparagraph (E)(i)—
(i) by striking “Securities Investors Protection Act of 1970” and inserting
“Securities Investor Protection Act of 1970”; and
(ii) by striking “securities or property” and inserting “securities, digital assets,
or property”; and
(D) in subparagraph (F), by striking “registered entity or” and inserting “registered
entity, applicable self-regulatory organization registered under section 9806 of title 31,
United States Code, or”;
(2) in paragraph (3)—
(A) in subparagraph (E)—
(i) in clause (i), by inserting “a digital asset or” after “contract of sale of”; and
(ii) in clause (iii)—
(I) by striking “securities or property” and inserting “securities, digital
assets, or property”; and
(II) by striking “Code, or section 7203, 7204, 7205, or 7207 of the Internal
Revenue Code of 1986;” and inserting “Code;”; and
(B) in subparagraph (K)(i), by striking “securities or property” and inserting
“securities, digital assets, or property”;
(3) in paragraph (4), by inserting “digital asset or” after “purchase or sale of any”; and
(4) in paragraph (6), by inserting “self-regulatory organization registered under section
9806 of title 31, United States Code,” after “registered futures association,” the first place it
appears.
(e) Major Disciplinary Rule Violations.—Section 8c(e) of the Commodity Exchange Act (7
U.S.C. 12c(e)) is amended—
(1) in paragraph (1), by inserting “or an applicable self-regulatory organization registered
under section 9806 of title 31, United States Code” before the period at the end; and
(2) in paragraph (2), by striking “entity or registered” and inserting “entity, applicable
 self-regulatory organization registered under section 9806 of title 31, United States Code, or
registered”.

SEC. 407. VIOLATIONS GENERALLY.

Section 9 of the Commodity Exchange Act (7 U.S.C. 13) is amended—
(1) in subsection (a)—
(A) in paragraph (2), by striking “subsection 4c” and inserting “section 4c”;
(B) in paragraph (3), by striking “registered entity” and inserting “registered entity,
applicable self-regulatory organization registered under section 9806 of title 31, United
States Code,”; and
(C) in paragraph (4), by inserting “applicable self-regulatory organization registered
under section 9806 of title 31, United States Code,” after “repository,”; and
(2) in subsection (e)—
(A) in paragraph (1)—
(i) by inserting “applicable self-regulatory organization registered under section
9806 of title 31, United States Code,” after “repository,”; and
(ii) by inserting “contracts for the sale of digital assets,” after “options
thereon,”; and
(B) in paragraph (2), by inserting “or contracts for the sale of digital assets” after
“options thereon”.

SEC. 408. MARKET REPORTS.

Section 16(a) of the Commodity Exchange Act (7 U.S.C. 20(a)) is amended—
(1) in the first sentence, by striking “which are the subject of futures contracts,” and
inserting “under the jurisdiction of the Commission,”; and
(2) in the second sentence, by striking “futures markets.” and inserting “markets under
the jurisdiction of the Commission.”.

SEC. 409. REGISTERED FUTURES ASSOCIATIONS.

Section 17 of the Commodity Exchange Act (7 U.S.C. 21) is amended—
(1) in subsection (e), by striking “section,” and inserting “section or an applicable
self-regulatory organization registered under section 9806 of title 31, United States Code,”;
and
(2) in subsection (m), by striking “association,” and inserting “association or an
applicable self-regulatory organization registered under section 9806 of title 31, United
States Code,”.

SEC. 410. BANKRUPTCY TREATMENT OF DIGITAL

ASSETS.
 (a) In General.—Section 20(a) of the Commodity Exchange Act (7 U.S.C. 24(a)) is amended
in paragraphs (1) and (2) by inserting “digital assets,” after “securities,” each place it appears.
(b) Definitions.—Section 761 of title 11, United States Code, is amended—
(1) in paragraph (4)—
(A) in subparagraph (A)—
(i) by striking “futures”; and
(ii) by inserting “digital asset or a” before “commodity”;
(B) in subparagraph (I), by striking “or” at the end;
(C) in subparagraph (J), by adding “or” at the end; and
(D) by adding at the end the following:
“(K) a contract for the purchase or sale of a digital asset by a contract market or
board of trade;”; and
(2) in paragraph (10)—
(A) in the matter preceding subparagraph (A)—
(i) by inserting “a digital asset,” after “a security,”; and
(ii) by inserting “digital asset,” after “cash, security,”; and
(B) in subparagraph (A)—
(i) in clause (vi), by inserting “a digital asset,” after “a security,”; and
(ii) in clause (vii)—
(I) by inserting “or a digital asset” before “held as property”;
(II) by inserting “or digital asset” after “such security”; and
(III) by inserting “or digital asset” after “based on a security”.
(c) Voidable Transfers.—Section 764(b)(1) of title 11, United States Code, is amended by
inserting “, digital assets” before “, or other property”.
(d) Treatment of Customer Property.—Section 766 of title 11, United States Code, is
amended—
(1) in subsection (b)(1), by striking “physical commodity underlying” and inserting
“commodity underlying”;
(2) in subsection (c), by inserting “digital asset,” before “or commodity contract” each
place the term appears;
(3) in subsection (d), by inserting “digital asset,” before “or commodity contract” each
place the term appears;
(4) in subsection (f)—
(A) in striking “and other property” and inserting “digital assets, and other
property”; and
 (B) by striking “or property” and inserting “, digital assets, or property”;
(5) in subsection (g), by striking “security or property” and inserting “security, digital
asset, or property”; and
(6) in subsection (h)(2), by inserting “digital assets,” after “customer securities,”.

SEC. 411. IDENTIFIED BANKING PRODUCTS.

Section 206(a) of the Gramm-Leach-Bliley Act (15 U.S.C. 78c note) is amended—
(1) in paragraph (5)(B)(ii), by striking “or” at the end;
(2) in paragraph (6), by striking the period at the end and inserting “; or”; and
(3) by adding at the end the following:
“(7) a payment stablecoin (as defined in section 9801 of title 31, United States Code)
issued by a bank.”.

TITLE V—RESPONSIBLE CONSUMER PROTECTION

SEC. 501. RESPONSIBLE CONSUMER PROTECTION.
(a) In General.—Chapter 98 of title 31, United States Code, as added by section 101(a) of this
Act, is amended by adding at the end the following:

“9802. Consumer protection standards for digital assets

“(a) In General.—A person who provides digital asset services in or affecting interstate
commerce shall ensure that the scope of permissible transactions that may be undertaken with
customer digital assets is disclosed clearly in a written customer agreement.
“(b) Written Notice.—A person who provides digital asset services in or affecting interstate
commerce shall provide clear, written notice to each customer, and require written
acknowledgment, of the following:
“(1) Prior to the implementation of any updates, material source code updates relating to
digital assets, except in emergencies, which may include security vulnerabilities.
“(2) Whether customer digital assets are segregated from other customer assets and the
manner of segregation.
“(3) How the assets of the customer would be treated in a bankruptcy or insolvency
scenario and the risks of loss.
“(4) The time period and manner in which the person is obligated to return the digital
asset of the customer upon the request of the customer.
“(5) Applicable fees.
“(6) The dispute resolution process of the person.
“(c) Subsidiary Proceeds.—
“(1) DEFINITIONS.—In this subsection:
 “(A) SUBSIDIARY PROCEEDS.—The term ‘subsidiary proceeds’ includes forks, airdrops,
staking, and other gains that accrue to a digital asset through market transactions, use
as a financial asset, or being held in custody or safekeeping by a person who provides
digital asset services.
“(B) TERMS OF SERVICE.—The term ‘written agreement’ includes the standard terms
of service of the person who provides digital asset services.
“(2) ACCRUAL TO CUSTOMER.—Except as otherwise specified by a written agreement with a
customer, all ancillary or subsidiary proceeds relating to digital asset services provided to a
customer shall accrue to the benefit of the customer in accordance with paragraph (3).
“(3) ELECTION.—A person who provides digital asset services may elect not to collect
certain subsidiary proceeds if the election is disclosed in a written agreement with the
customer.
“(4) WITHDRAWAL.—A customer may withdraw digital assets in a method that permits the
collection of the subsidiary proceeds.
“(5) WRITTEN AGREEMENT.—A person who provides digital asset services shall enter into a
written agreement with a customer, if desired by the customer, regarding the manner in
which to invest subsidiary proceeds or other gains attributable to the digital assets of the
customer.
“(d) Lending Arrangements.—A person who provides digital asset services in or affecting
interstate commerce shall ensure any lending arrangements relating to digital assets are—
“(1) clearly disclosed to customers before any lending services take place;
“(2) subject to the affirmative consent of the customer;
“(3) fully enforceable as a matter of commercial law;
“(4) accompanied by full disclosures of applicable terms and risks, yield, and the manner
in which the yield is calculated;
“(5) accompanied by appropriate disclosures relating to collateral requirements and
policies, including—
“(A) haircuts and overcollateralization requirements;
“(B) collateral the person accepts when calling for additional collateral from a
customer, including collateral substitution;
“(C) whether customer collateral is commingled with the collateral of other
customers or of the person; and
“(D) how customer collateral is invested, and whether the yield belongs to the
customer or to the person;
“(6) accompanied by disclosures of mark-to-market and monitoring arrangements,
including—
“(A) the frequency of mark-to-market monitoring and how frequently the person
will call for additional collateral from a customer;
“(B) the time period in which the customer must supply additional collateral to the
 person after a collateral call; and
“(C) whether the person permits failures to deliver such collateral, and in the event
of a failure to deliver the period of time in which the customer must cure the failure to
deliver before the customer’s position is closed; and
“(7) compliant with all applicable Federal and State laws.
“(e) Rehypothecation.—
“(1) DEFINITION.—In this subsection, the term ‘rehypothecation’ means the pledging of an
asset as collateral for a financial transaction by a person after the pledging of the asset as
collateral by a customer of that person.
“(2) REHYPOTHECATION.—Before rehypothecating a digital asset, a person who provides
digital asset services to a customer in or affecting interstate commerce shall clearly disclose
policies on rehypothecation to customers, including a clear definition of rehypothecation
that is accessible to consumers. The person who provides digital asset services to a
customer shall obtain affirmative consent and consider the following factors to
appropriately mitigate risk relating to rehypothecation:
“(A) The liquidity and volatility of a digital asset.
“(B) Past failures to deliver a particular digital asset.
“(C) Concentration risk.
“(D) Whether an issuer or lender of last resort relating to a digital asset exists,
including for virtual currency with a finite supply.
“(E) The capital, leverage and market position of the person.
“(F) The legal obligations of the person to customers and other persons in the market
who provide digital asset services.

“9803. Source code version of digital assets

“(a) In General.—A customer and a person who provides digital asset services in or affecting
interstate commerce shall agree in writing regarding the source code version the person will use
for each digital asset and the treatment of each asset under the law, including securities and
commodities laws and the Uniform Commercial Code applicable to the transaction.
“(b) Determination.—A person who provides digital asset services—
“(1) may periodically determine whether to implement a source code version that uses
validation rules different than those of the source code version specified in a customer
agreement, including in circumstances where is not possible to predict in advance whether
utilization of the different source code version will be in the best interests of the customer;
“(2) shall consider the nature of proposed changes to source code versions with potential
effects resulting from third-party actors that may create different source code versions
resulting in new networks that could create economic value for customers;
“(3) shall not be required to support digital assets and source code versions that the
person has not entered into an agreement with customers to support; and
 “(4) shall not capriciously redefine a digital asset or the corresponding source code or
alter customer agreements with respect to this subsection.
“(c) Standards.—The self-regulatory organization created under section 9806—
“(1) shall adopt and maintain standards for changes to digital asset source code versions
that use differing validation rules than those of the source code version specified in the
customer agreement, which shall include customer notice and approval, as appropriate
based on the circumstances; and
“(2) may specify differing standards based on source code changes which occur as the
result of emergencies, including security vulnerabilities.

“9804. Settlement finality

“To promote legal certainty and customer protection, a person who provides digital asset
services in or affecting interstate commerce and a customer shall agree on the terms of settlement
finality for all transactions, including the following:
“(1) The conditions under which a digital asset may be deemed fully transferred,
provided that these legal conditions may diverge from operational conditions under which
digital assets are considered transferred, owing to the distributed and probabilistic nature of
digital assets.
“(2) The exact moment of transfer of a digital asset.
“(3) The discharge of any obligations upon transfer of a digital asset.
“(4) Conformity to applicable provisions of the Uniform Commercial Code.

“9805. Notice to customers; enforcement

“(a) In General.—In providing disclosures and carrying out other duties under this chapter, a
person who provides digital asset services in or affecting interstate commerce shall have a duty
to provide higher standards of customer notice and acknowledgment if there is likely to be a
material impact on the economic value of the digital asset of a customer.
“(b) Enforcement of Standards.—The standards under this chapter—
“(1) shall be enforced in an appropriate manner, commensurate with other customer
protection standards—
“(A) in the case of a member of an applicable self-regulatory organization, by the
organization, under the supervision of the appropriate market regulator; and
“(B) in the case of a depository institution or other financial institution, by the
appropriate State or Federal banking supervisor; and
“(2) may not be enforced by the Bureau of Consumer Financial Protection.”.
(b) Technical and Conforming Amendment.—The table of sections of chapter 98, as added by
section 101(a) of this Act, is amended by adding at the end the following:
“9802. Consumer protection standards for digital assets.
“9803. Source code version of digital assets.
“9804. Settlement finality.
“9805. Notice to customers; enforcement.”.

TITLE VI—RESPONSIBLE PAYMENTS INNOVATION

SEC. 601. DEPOSITORY INSTITUTION ISSUANCE OF
STABLECOINS.
The Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended by inserting after
section 14 (12 U.S.C. 1824) the following:

“SEC. 14A. DEPOSITORY INSTITUTION ISSUANCE OF

STABLECOINS.
“(a) In General.—A depository institution may issue a payment stablecoin as provided by this
section.
“(b) Payment Stablecoin Assets.—A depository institution shall maintain high-quality liquid
assets under this section equal to not less than 100 percent of the liabilities of the institution
relating to payment stablecoins. In the case of an insured depository institution described in
subsection (k)(1)(A) that engages in on-balance sheet lending activities, assets under this
subsection shall equal not less than 100 percent of the liabilities of the institution related to
payment stablecoins and the assets shall be held in a segregated balance account at a Federal
Reserve bank, in a segregated deposit or off-balance sheet account, or in another equivalent
manner that ensures the segregation of the assets. Eligible high-quality liquid assets under this
section shall be comprised of the following:
“(1) Cash.
“(2) Balances at a Federal Reserve bank.
“(3) Foreign withdrawable reserves, consistent with the legal tender in which the
payment stablecoin is denominated or pegged.
“(4) A security that is issued by, or unconditionally guaranteed as to the timely payment
of principal and interest by, the Department of the Treasury, with a short-term maturity date.
“(5) Any other high-quality, liquid asset determined to be consistent with safe and sound
banking practices.
“(c) Disclosures.—A depository institution shall disclose, in a publicly accessible manner, a
summary explanation of the assets backing the payment stablecoin not more than 10 business
days after the end of each month. The detailed explanation shall include the value of the assets,
total liabilities, and the percentage of total assets for each kind of asset held in reserve. As
applicable, the appropriate Federal banking agency or State banking supervisor shall, as part of a
regular examination of the depository institution, at the frequency otherwise required by law,
verify the composition of the assets and the accuracy of disclosures made under this section and
reports under subsection (d).
“(d) Call Report.—As applicable, the appropriate Federal banking agency or State banking
supervisor shall require a depository institution that issues a payment stablecoin to report, in
detail, on the composition of the assets in each periodic report of condition, or in an alternative
format approved by the Federal Financial Institutions Examination Council, at the frequency
otherwise required by law.
“(e) Permission.—A depository institution shall, as applicable, obtain permission from the
appropriate Federal banking agency or State bank supervisor, with an application submitted not
less than 6 months before intended issuance of the payment stablecoin, but which may be
submitted as part of a charter application. As part of an application under this section, a
depository institution shall develop a tailored recovery and resolution plan that would permit the
orderly resumption of a safe and sound operation or the orderly wind-down of operations in the
event of distress, including the redemption of all outstanding claims. The application shall also
contain a draft customer agreement, flow of funds explanation, a robust information technology
plan and operational design of the payment stablecoin. As applicable, the appropriate Federal
banking agency or State banking supervisor shall render a decision on the application within 4
months of the date of filing, and shall approve the application if the following criteria are met:
“(1) The payment stablecoin is likely able to operate in a safe and sound manner,
commensurate with other approved applications for issuance of a payment stablecoin, if
applicable.
“(2) The depository institution has appropriate resources and expertise to manage the
issuance and operation of the payment stablecoin.
“(3) The depository institution has appropriate policies and procedures relating to key
focus areas that are material to the operation of the payment stablecoin.
“(f) Redemption of Payment Stablecoins.—A depository institution shall maintain the ability
to immediately redeem all outstanding payment stablecoins at par, upon demand, in the legal
tender in which the payment stablecoin is denominated or to which its value is pegged. Each
depository institution shall redeem a payment stablecoin issued by another depository institution
at par, upon demand. The Board of Governors of the Federal Reserve System, through the
Federal Reserve banks, shall provide for the clearing and settlement of payment stablecoin
liabilities among depository institutions under this section and shall ensure competitive equality
in all clearing, settlement and related activities. A depository institution shall also assess its
ability to fulfill large redemptions without placing downward pressure on the market value of the
payment stablecoin.
“(g) Collateral Availability in the Capital Markets.—The appropriate Federal banking
agencies, in consultation with State bank supervisors and the Securities and Exchange
Commission, shall monitor use of the high-quality liquid assets authorized under subsection (b)
and the impact on collateral availability and the efficient functioning of the capital markets.
“(h) Applicability of Gramm-Leach-Bliley Data Privacy Provisions.—Title V of the
Gramm-Leach-Bliley Act (12 U.S.C. 6801 et seq.) shall apply to the payment stablecoin
activities of a depository institution under this section.
“(i) Receivership Priority.—In the event of the receivership of a depository institution that has
issued a payment stablecoin under this section, a person in possession of a valid payment
stablecoin liability issued by that institution shall have priority over all other claims on the
institution, other than costs incurred with the receivership of the institution, if applicable.
“(j) Rules.—The appropriate Federal banking agencies, in consultation with State banking
supervisors, shall adopt rules to implement this section, including—
“(1) capital treatment for depository institutions described in subsection (k)(1)(A);
“(2) liquidity, leverage, and interest rate risk;
“(3) third-party service provider activities—
“(A) including custodial wallet providers; and
“(B) not including licensing or capital requirements for third-party service providers;
“(4) asset management practices with respect to the payment stablecoin reserve;
“(5) appropriate operational, compliance and information technology risk management;
“(6) tailored recovery and resolution standards relating to payment stablecoins; and
“(7) any other material topic.
“(k) Definitions.—In this section:
“(1) DEPOSITORY INSTITUTION.—The term ‘depository institution’ has the meaning given
the term in section 19(b)(1) of the Federal Reserve Act (12 U.S.C. 461(b)(1)) and
includes—
“(A) an insured depository institution; or
“(B) a depository institution operating under subsection (c) of section 5169 of the
Revised Statutes (12 U.S.C. 27), or a substantially similar State law, that requires a
depository institution to maintain assets valued at not less than 100 percent of the
deposits of the institution.
“(2) PAYMENT STABLECOIN.—The term ‘payment stablecoin’ has the meaning given the
term in section 9801 of title 31, United States Code.”.

SEC. 602. STUDY ON THE CREATION OF AN OFFICIAL

DIGITAL CURRENCY BY THE PEOPLE’S REPUBLIC OF
CHINA.
(a) In General.—Not later than one year after the date of the enactment of this Act, the
President shall submit to the appropriate committees of Congress a report on—
(1) the short-, medium-, and long-term national security risks associated with the creation
and use of the official digital currency of the Central Bank of the People’s Republic of
China, including—
(A) risks arising from potential surveillance of transactions;
(B) risks related to security and illicit finance; and
(C) risks related to economic coercion and social control by the People’s Republic of
China; and
(2) the impact of the creation and use of that currency on the economic influence of the
United States, including the effect on the United States dollar and other potential effects on
such influence that may result from failure to innovate with respect to payment stablecoins
 and central bank digital currencies.
(b) Form of Report.—The report required by subsection (a) shall be submitted in unclassified
form, but may include a classified annex.
(c) Appropriate Committees of Congress Defined.—In this section, the term “appropriate
committees of Congress” means—
(1) the Committee on Banking, Housing, and Urban Affairs, the Committee on Foreign
Relations, the Committee on Appropriations, and the Select Committee on Intelligence of
the Senate; and
(2) the Committee on Financial Services, the Committee on Foreign Affairs, the
Committee on Appropriations, and the Permanent Select Committee on Intelligence of the
House of Representatives.

SEC. 603. USE OF THE OFFICIAL DIGITAL CURRENCY

OF THE PEOPLE’S REPUBLIC OF CHINA ON
GOVERNMENT DEVICES.
(a) Definitions.—In this section—
(1) the term “digital yuan” means the official central bank digital currency of the People’s
Republic of China;
(2) the term “executive agency” has the meaning given that term in section 133 of title
41, United States Code; and
(3) the term “information technology” has the meaning given that term in section 11101
of title 40, United States Code.
(b) Use of Digital Yuan.—Not later than 60 days after the date of enactment of this Act, the
Director of the Office of Management and Budget, in consultation with the Administrator of
General Services, the Director of the Cybersecurity and Infrastructure Security Agency, the
Director of National Intelligence, and the Secretary of Defense, and consistent with the
information security requirements under subchapter II of chapter 35 of title 44, United States
Code, shall develop standards and guidelines for executive agencies which require adequate
security measures for use of the digital yuan on government information technology devices.

TITLE VII—RESPONSIBLE BANKING INNOVATION

SEC. 701. CERTIFICATE OF AUTHORITY TO COMMENCE
BANKING.
Section 5169 of the Revised Statutes (12 U.S.C. 27) is amended—
(1) in subsection (a), in the third sentence, by striking “to those of a trust company and
activities related thereto.” and inserting the following: “to—
“(1) those of a trust company and fiduciary activities related thereto; or
“(2) those of a depository institution required to maintain assets valued at not less than
100 percent of the deposits of the institution, for the purposes of issuing a payment
 stablecoin (as defined in section 9801, title 31, United States Code) and activities related
thereto, consistent with subsection (c) of this section and without the requirement to
maintain deposit insurance under the Federal Deposit Insurance Act (12 U.S.C. 1811 et
seq.) and section 2 of the Federal Reserve Act (12 U.S.C. 222).”; and
(2) by adding at the end the following:
“(c)(1) Notwithstanding any other provision of law, a depository institution described in
subsection (a)(2) may not engage in maturity transformation or facilitate consumer lending
through third parties.
“(2) Restrictions on affiliate transactions applicable for insured depository institutions shall
apply to such depository institutions.
“(3) The Comptroller of the Currency, in close consultation with the Board of Governors of
the Federal Reserve System and State banking supervisors, shall develop the following:
“(A) A simplified capital framework for a depository institution to issue a payment
stablecoin and conduct related activities under this subsection, which shall be comprised of
the following factors:
“(i) Payment system risk.
“(ii) The greater of—
“(I) all projected costs of receivership; or
“(II) 3 years of projected operating expenses.
“(B) Appropriate standards for the depository institution to develop a community
contribution plan, which may include charitable donations, volunteerism, job training and
internships or similar involvement.
“(C) A tailored recovery and resolution plan that would permit the orderly resumption of
a safe and sound operation or the orderly wind-down of operations relating to a payment
stablecoin in the event of distress.
“(D) Tailored holding company supervision, as specified by section 15 of the Bank
Holding Company Act of 1956.
“(d) The Comptroller of the Currency may promulgate regulations to carry out this section.”.

SEC. 702. HOLDING COMPANY SUPERVISION OF

COVERED DEPOSITORY INSTITUTIONS.
The Bank Holding Company Act of 1956 (12 U.S.C. 1841 et seq.) is amended—
(1) in section 2(c) (12 U.S.C. 1841(c)), strike paragraph (2) and insert the following:
“(2) EXCEPTIONS.—The term ‘bank’ does not include a covered depository institution
subject to tailored holding company supervision under section 15.”; and
(2) by adding at the end the following:

“SEC. 15. TAILORED HOLDING COMPANY SUPERVISION

FOR COVERED DEPOSITORY INSTITUTIONS.
“(a) Definitions.—In this section:
“(1) APPROPRIATE BANKING SUPERVISOR.—The term ‘appropriate banking supervisor’ means
the Comptroller of the Currency, a State banking supervisor, in the case of a State member
bank, the Board, or in the case of an insured bank, the Federal Deposit Insurance
Corporation, as applicable.
“(2) CONTROLLING INTEREST.—The term ‘controlling interest’ means a circumstance when
a person, directly or indirectly, or acting through or in concert with 1 or more persons-
“(A) owns, controls, or has the power to vote 25 percent or more of any class of
voting securities of a covered depository institution;
“(B) controls in any manner the election of a majority of the directors of the covered
depository institution; or
“(C) has the power to exercise a controlling influence over the management or
policies of the covered depository institution.
“(3) COVERED DEPOSITORY INSTITUTION.—The term ‘covered depository institution’ means a
depository institution operating under subsection (c) of section 5169 of the Revised Statutes
(12 U.S.C. 27), or a substantially similar State law, that requires a depository institution to
maintain assets valued at not less than 100 percent of the deposits of the institution.
“(b) Controlling Interest.—A person with a controlling interest in a covered depository
institution shall—
“(1) submit annual audited financial statements and other information as otherwise
reasonably required by the appropriate banking supervisor;
“(2) provide a description of all affiliated or parent entities and their relationships with
the institution, including annual updates; and
“(3) serve as a source of strength for the institution, which may include capital plans,
maintenance agreements, or agreements for resource-sharing, as required by the appropriate
banking supervisor.
“(c) Appropriate Banking Supervisors.—The appropriate banking supervisor may require a
legal entity with a controlling interest in a covered depository institution to execute a tax
allocation agreement with the institution that—
“(1) expressly states that an agency relationship exists between the person and the
institution with respect to tax assets generated by the institution, and that the assets are held
in trust by the person for the benefit of the institution and will be promptly remitted to the
institution; and
“(2) may provide that the amount and timing of any payments or refunds to the institution
by the person should be no less favorable than if the institution were a separate taxpayer.
“(d) Prohibition on Controlling Interests.—A person that is a commercial firm, as defined in
section 602 of the Bank and Savings Association Holding Company and Depository Institution
Regulatory Improvements Act of 2010 (12 U.S.C. 1815 note), may not obtain a controlling
interest in a covered depository institution.
“(e) Public Interest.—If the appropriate banking supervisor finds that it is in the public interest
and has reasonable cause to believe it is necessary to protect the customers of a covered
depository institution, the supervisor may—
“(1) conduct an examination of a legal entity with a controlling interest in a covered
depository institution or otherwise require information from the person; and
“(2) require a person with a controlling interest in a covered depository institution to
divest or sever their relationship with the institution, if necessary to maintain safety and
soundness.”.

SEC. 703. IMPLEMENTATION RULES TO PRESERVE

ADEQUATE COMPETITION IN PAYMENT STABLECOINS.
(a) In General.—The application of a non-depository trust company or the holder of a State
license that only persons engaged in digital asset activities may obtain, which was chartered or
issued under the laws of a State or the National Bank Act before the date of enactment of this
Act, to receive a charter as a depository institution and to operate under subsection (c) of section
5169 of the Revised Statutes (12 U.S.C. 27), as added by section 701 of this Act, shall be
decided upon by the Comptroller of the Currency before an application for a charter to operate
under that section from another entity that is filed on or after the date of enactment of this Act.
(b) Application.—The application of a covered depository institution, as defined in section
15(a) of the Bank Holding Company Act of 1956 (12 U.S.C. 1853(a)), chartered before the date
of enactment of this Act to become a State member bank in the Federal Reserve System or for
access to Federal Reserve services under section 11A of the Federal Reserve Act (12 U.S.C.
248a) shall be decided upon by the Board of Governors of the Federal Reserve System, or a
Federal Reserve bank, as applicable, before any application to become a State member bank or
for Federal Reserve services from any other entity which seeks to operate as a covered
depository institution and which is filed on or after the date of enactment of this Act.
(c) Decision.—The applications described in subsections (a) and (b) of this section shall be
decided upon by the appropriate Federal banking agency (as defined in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813) or Federal Reserve bank, as applicable, before an
insured depository institution in operation before the enactment date of this Act may issue a
payment stablecoin.

SEC. 704. FINANCIAL CRIMES ENFORCEMENT

NETWORK INNOVATION LABORATORY.
Section 310 of title 31, United States Code, is amended by adding at the end the following:
“(m) Innovation Laboratory.—
“(1) IN GENERAL.—There is established within the Financial Crimes Enforcement Network
an Innovation Laboratory to promote regulatory dialogue, data sharing between the
Financial Crimes Enforcement Network and financial companies, and an assessment of
potential changes in law, rules, or policies to facilitate the appropriate supervision of
financial technology and the laws under the jurisdiction of the agency.
 “(2) CHIEF INNOVATION OFFICER.—The innovation officer appointed under section 6208 of
the Anti-Money Laundering Act of 2020 (31 U.S.C. 5311 note) by the Director of the
Financial Crimes Enforcement Network shall manage the Innovation Laboratory.
“(3) DUTIES.—The Innovation Laboratory, as appropriate, shall study changes in financial
technology and make recommendations to Congress, the Secretary, and the Director for
appropriate changes in laws, rules, or policies that can more effectively facilitate the
supervision of financial technology with respect to the laws under the jurisdiction of the
Financial Crimes Enforcement Network, including digital assets, distributed ledger
technology and decentralized finance.
“(4) PILOT PROJECTS.—The Innovation Laboratory, as appropriate, shall conduct pilot
projects with financial companies to more effectively facilitate the supervision of financial
technology, consistent with applicable law.”.

SEC. 705. SANCTIONS COMPLIANCE RESPONSIBILITIES

OF PAYMENT STABLECOIN ISSUERS.
Not later than 120 days after the date of the enactment of this Act, the Secretary of the
Treasury shall adopt final guidance clarifying the sanctions compliance responsibilities and
liability of an issuer of a payment stablecoin with respect to downstream transactions relating to
the stablecoin that take place after the stablecoin is first provided to a customer of the issuer.

SEC. 706. STUDY ON USE OF DISTRIBUTED LEDGER

TECHNOLOGY FOR REDUCTION OF RISK IN
DEPOSITORY INSTITUTIONS.
Not later than 180 days after the date of enactment of this Act, the Board of Governors of the
Federal Reserve System shall complete a study and submit to the Committee on Housing,
Banking, and Urban Affairs of the Senate and the Committee on Financial Services of the House
of Representatives a report regarding the manner in which distributed ledger technology may
reduce risk for depository institutions, as defined in section 19(b)(1) of the Federal Reserve Act
(12 U.S.C. 461(b)(1)), including settlement risk, operational risk and capital requirements.

SEC. 707. CLARIFICATIONS AS TO ELIGIBILITY FOR

FEDERAL RESERVE SERVICES TO DEPOSITORY
INSTITUTIONS.
(a) Findings.—Congress finds the following:
(1) The Federal Reserve Act specifies that a depository institution, as defined in section
19(b)(1) of that Act (12 U.S.C. 461(b)(1)), upon receiving a charter from the Office of the
Comptroller of the Currency, National Credit Union Administration or state banking
supervisor, is required to be made available services from Federal Reserve banks under the
Federal Reserve Act (12 USC 248a), including currency and coin services, wire transfer
services, automated clearinghouse services and settlement services.
(2) Numerous Federal courts have found that the provision of services to depository
 institutions under section 11A of the Federal Reserve Act (12 U.S.C. 248a) is a ministerial
duty imposed by Congress with respect to all depository institutions.
(3) The Board of Governors of the Federal Reserve System has long interpreted the
Federal Reserve Act to mean that the Federal Reserve banks must provide services to all
depository institutions, noting that it has a duty “to ensure the provision of payment services
to all depository institutions on an equitable basis, and to do so in an atmosphere of
competitive fairness”.
(4) The Federal Reserve banks have, on occasion, provided services to non-depository,
non-FDIC insured institutions without appropriate statutory authority.
(5) Certain novel legal positions that conflict with or frustrate these precedents are not in
the best traditions of the Federal Reserve Act, our dual banking system, and the imperatives
of Congress.
(6) The statutory independence of the Board of Governors and the Federal Reserve banks
under the Constitution of the United States is properly rooted in absolute fidelity to the laws
enacted by Congress.
(7) It is appropriate for Congress to reaffirm its existing statutory intent to ensure that all
depository institutions may access services under the Federal Reserve Act “on an equitable
basis, and to do so in an atmosphere of competitive fairness”.
(b) Pricing of Services.—Section 11A of the Federal Reserve Act (12 U.S.C. 248a) is
amended by adding at the end the following:
“(f) The Federal Reserve banks shall provide a segregated balance account to a depository
institution upon application and a determination by the reserve bank that the account will be used
in a safe and sound manner.”.
(c) Deposits; Exchange and Collection; Member and Nonmember Banks or Other Depository
Institutions; Charges.—Section 13 of the Federal Reserve Act (12 U.S.C. 342) is amended to
read as follows:
“(1) “Any Federal Reserve bank shall receive from any of its member banks or other
depository institutions, and from the United States, deposits of current funds in lawful
money, national-bank notes, Federal reserve notes, or checks, and drafts, payable upon
presentation or other items, and also, for collection, maturing notes and bills; or, solely for
purposes of exchange or of collection, may shall receive from other Federal Reserve banks
deposits of current funds in lawful money, national-bank notes, or checks upon other
Federal Reserve banks, and checks and drafts, payable upon presentation within its district
or other items, and maturing notes and bills payable within its district; or, solely for the
purposes of exchange or of collection, may shall receive from any non-member bank or
trust company or other depository institution deposits of current funds in lawful money,
national-bank notes, Federal reserve notes, checks and drafts payable upon presentation or
other items, or maturing notes and bills: Provided, Such nonmember bank or trust company
or other depository institutions maintains with the Federal Reserve bank of its district a
balance in such amount as the Board determines taking into account items in transit,
services provided by the Federal Reserve bank, and other factors as the Board may deem
appropriate: Provided further, That nothing in this or any other section of this Act shall be
construed as prohibiting a member or nonmember bank or other depository institution from
 making reasonable charges, to be determined and regulated by the Board of Governors, but
in no case to exceed 10 cents per $100 or fraction thereof, based on the total of checks and
drafts presented at any one time, for collection or payment of checks and drafts and
remission therefor by exchange or otherwise; but no such charges shall be made against the
Federal Reserve banks.”.

SEC. 708. TRANSITION TO UNIQUE IDENTIFIER FOR

FINANCIAL INSTITUTIONS ASSIGNED BY THE BOARD
OF GOVERNORS.
Not later than 2 years after the date of enactment of this Act, the Board of Governors of the
Federal Reserve System shall transition away from the use of routing transit numbers issued by a
private entity to the use of the unique identifiers currently assigned by the Board to financial
institutions for all purposes relating to the clearing of transactions and the services required to be
made available to depository institutions under section 11A of the Federal Reserve Act (12
U.S.C. 248a).

SEC. 709. CLARIFYING APPLICATION REVIEW TIMES

WITH RESPECT TO THE FEDERAL BANKING AGENCIES.
Section 343 of the Riegle Community Development and Regulatory Improvement Act of 1994
(12 U.S.C. 4807) is amended by striking subsection (a) and inserting the following:
“(a) Final Action.—
“(1) DEFINITION.—In this subsection, the term ‘completed application’—
“(A) means the information requested by the Federal banking agency at the outset of
an application through application forms or similar means; and
“(B) does not include supplemental information requested by the agency after filing
of an application.
“(2) ACTION.—Each Federal banking agency, including Federal Reserve banks, shall take
final action on any application to the agency before the end of the 1-year period beginning
on the date on which a completed application is received by the agency.
“(b) Report.—Each Federal banking agency, including the Federal Reserve banks, shall
annually report to Congress a list of the applications that have been pending for 9 months or
longer since the date of the initial application filed by an applicant. Such list—
“(1) shall disclose the reason why the application has not yet been approved or denied by
the Federal banking agency; and
“(2) shall not contain confidential supervisory information.”.

SEC. 710. EXAMINATION STANDARDS FOR DIGITAL

ASSET ACTIVITIES.
(a) In General.—Not later than 18 months after the date of enactment of this Act, the Federal
Financial Institutions Examination Council, in consultation with the Financial Crimes
Enforcement Network, shall publish final guidance and examiner handbooks for depository
institutions, as defined in section 19(b)(1) of the Federal Reserve Act (12 U.S.C. 461(b)(1)), on
the following topics related to digital assets:
(1) Anti-money laundering, customer identification, beneficial ownership, and sanctions
compliance, including with respect to payment stablecoin activities and subsidiary value (as
defined in section 9802(c) of title 31, United States Code).
(2) Custody.
(3) Fiduciary and capital markets activities.
(4) Information technology standards.
(5) Payment system risk.
(6) Consumer protection.
(b) Final Guidance.—Not later than 18 months after the date of enactment of this Act,
Securities and Exchange Commission and Commodity Futures Trading Commission, in
consultation with the Financial Crimes Enforcement Network, shall publish final guidance and
examiner handbooks relating to digital asset intermediaries regarding the topics described in
paragraphs (1) and (4) of subsection (a).

SEC. 711. ASSET CUSTODY FOR DEPOSITORY

INSTITUTIONS AND CERTAIN OTHER ENTITIES.
(a) Findings.—Congress finds the following:
(1) The laws surrounding custody of financial assets is largely customary, uncodified, and
poorly understood.
(2) Lack of uniformity amongst various jurisdictions’ laws relating to custody has largely
not been addressed by regulators, can contribute to risk, and is producing uncertainty for
innovators.
(3) Codifying basic principles around custody of financial assets will reduce systemic
risk, clearly define the rights and duties of both custodian and customer, and contribute to a
more uniform and effective banking system.
(b) Definition.—In this section, the term “custody” means the safekeeping, servicing and
management of customer financial assets, including currency, securities and commodities, on an
off-balance sheet basis.
(c) Custody.—
(1) IN GENERAL.—Except as provided in paragraph (2), custody of financial assets is
accomplished by a bailment and established by a written customer agreement. Custody shall
not be a fiduciary or trust activity unless the custodian is providing substantial discretionary
services with respect to an account, including through investment advice or investment
discretion, and the custodian owes a customer a higher standard of care or duty with respect
to the customer of that account.
(2) EXCEPTION.—A custodian and customer may establish a legal relationship other than a
bailment pursuant to a written customer agreement.
 (d) Proper Documentation.—A custodial account shall be properly documented in a customer
agreement, with a clearly defined legal relationship between the custodian and customer.
Custodial assets shall be properly identified and segregated from the assets of the custodian, with
proper documentation of asset segregation.
(e) Not Assets or Liabilities.—Assets properly held in a custodial account under this section
are not assets or liabilities of the custodian and shall be maintained on an off-balance sheet basis,
notwithstanding the form in which the assets are maintained.
(f) Applicability.—This section shall apply to depository institutions, as defined in section
19(b)(1) of the Federal Reserve Act (12 U.S.C. 461(b)(1)), and non-depository trust companies
chartered under section 5169 of the Revised Statutes (12 U.S.C. 27).

SEC. 712. REPUTATION RISK; REQUIREMENTS FOR

ACCOUNT TERMINATION REQUESTS AND ORDERS.
(a) Reputation Risk.—An appropriate Federal banking agency may not formally or informally
request or order a depository institution to terminate a specific customer account or group of
customer accounts unless the agency has a valid reason for such request or order, consistent with
subsections (b) and (c).
(b) No Restriction.—An appropriate Federal banking agency shall not restrict or discourage a
depository institution from entering into or maintaining a banking relationship with a specific
customer or group of customers based on reputation risk, including through the examinations and
ratings of the depository institution.
(c) Treatment of National Security Threats.—If an appropriate Federal banking agency
believes a specific customer or group of customers is, or acting as a conduit for, an entity
which—
(1) poses a threat to national security;
(2) is involved in terrorist financing;
(3) is an agency of the Government of Iran, North Korea, Syria, or any country listed
from time to time on the State Sponsors of Terrorism list;
(4) is located in, or is subject to the jurisdiction of, any country specified in paragraph
(3); or
(5) does business with any entity described in paragraph (3) or (4), unless the appropriate
Federal banking agency determines that the customer or group of customers has used due
diligence to avoid doing business with that entity, such belief shall satisfy the requirement
under subsection (a).
(d) Notice Requirement.—
(1) IN GENERAL.—If an appropriate Federal banking agency formally requests or orders a
depository institution to terminate a specific customer account or a group of customer
accounts, the agency shall—
(A) provide such request or order to the institution in writing; and
(B) accompany such request or order with a written justification for why such
 termination is needed, including any specific laws or rules the agency believes are
being violated by the customer or group of customers.
(2) JUSTIFICATION REQUIREMENT.—Consistent with subsection (b), the justification
described in paragraph (1)(B) may not be based on reputation risk to the depository
institution.
(e) Customer Notice.—
(1) NOTICE REQUIRED.—Except as provided under paragraph (2) or as otherwise prohibited
from being disclosed by law, if an appropriate Federal banking agency orders a depository
institution to terminate a specific customer account or a group of customer accounts, the
depository institution shall inform the specific customer or group of customers of the
justification for the customer’s account termination described under subsection (b).
(2) NOTICE PROHIBITED.—
(A) NOTICE PROHIBITED IN CASES OF NATIONAL SECURITY.—If an appropriate Federal
banking agency requests or orders a depository institution to terminate a specific
customer account or a group of customer accounts based on a belief that the customer
or customers pose a threat to national security, or are otherwise described under
subsection (a)(2), neither the depository institution nor the appropriate Federal banking
agency may inform the customer or customers of the justification for the customer’s
account termination.
(B) NOTICE PROHIBITED IN OTHER CASES.—If an appropriate Federal banking agency
determines that the notice required under paragraph (1) may interfere with an
authorized criminal investigation, neither the depository institution nor the appropriate
Federal banking agency may inform the specific customer or group of customers of the
justification for the customer’s account termination.
(f) Reporting Requirement.—Each appropriate Federal banking agency shall issue an annual
report to Congress stating—
(1) the aggregate number of specific customer accounts that the agency requested or
ordered a depository institution to terminate during the previous year; and
(2) the legal authority on which the agency relied in making such requests and orders and
the frequency on which the agency relied on each such authority.
(g) Definitions.—In this section:
(1) APPROPRIATE FEDERAL BANKING AGENCY.—The term “appropriate Federal banking
agency” means—
(A) the appropriate Federal banking agency, as defined in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813); and
(B) the National Credit Union Administration, in the case of an insured credit union.
(2) DEPOSITORY INSTITUTION.—The term “depository institution” has the meaning given the
term in section 19(b)(1) of the Federal Reserve Act (12 U.S.C. 461(b)(1)(A)).

SEC. 713. CONFORMING AMENDMENTS.

 (a) Federal Deposit Insurance Act.—Section 12 of the Federal Deposit Insurance Act (12
U.S.C. 1822) is amended by adding at the end the following:
“(g) Appointment of Receiver.—
“(1) DEFINITION.—In this subsection, the term ‘covered depository institution’ has the
meaning given the term in section 15(a) of the Bank Holding Company Act of 1956.
“(2) APPOINTMENT.—The Corporation may be appointed as receiver of a covered
depository institution, as defined in section 15(a) of the Bank Holding Company Act of
1956.
“(3) PREMIUMS.—A covered depository institution may not be charged deposit insurance
premiums for the purpose of this subsection, but the Corporation may use the capital of the
covered depository institution to fund the costs of the receivership.
“(4) REGULATIONS.—The Corporation may promulgate regulations to carry out this
subsection, which shall—
“(A) be substantially consistent with the rules for receivership of an insured
depository institution; and
“(B) account for the limited activities, capital, and the required tailored recovery and
resolution plan of the covered depository institution.”.
(b) Federal Reserve Act.—The Federal Reserve Act (12 U.S.C. 221 et seq.) is amended—
(1) in section 19(b)(1)(A) (12 U.S.C. 461(b)(1)(A))—
(A) in clause (vi), by striking “and” at the end;
(B) in clause (vii), by striking the period at the end and inserting “; and”; and
(C) by adding at the end the following:
“(viii) a covered depository institution, as defined in section 15(a) of the Bank
Holding Company Act of 1956.”; and
(2) in the first undesignated paragraph of section 9 (12 U.S.C. 321), in the first sentence,
by inserting “, covered depository institutions, as defined in section 15(a) of the Bank
Holding Company Act of 1956 (12 U.S.C. 1853(a)),” after “Plan banks”.

TITLE VIII—RESPONSIBLE INTERAGENCY

COORDINATION
SEC. 801. TIMELINE FOR INTERPRETIVE GUIDANCE
ISSUED BY FEDERAL FINANCIAL AGENCIES;
INTERSTATE SANDBOX ACTIVITIES.
(a) In General.—Title 31, United States Code, is amended by adding after chapter 98, as added
by section 101(a) of this Act, the following:

“CHAPTER 99—RESPONSIBLE INTERAGENCY

COORDINATION
“Sec.
“9901. Timeline for interpretive guidance issues by Federal financial agencies.
“9902. Interstate sandbox activities.

“9901. Timeline for interpretive guidance issues by Federal

financial agencies
“(a) In General.—In this section:
“(1) FEDERAL FINANCIAL REGULATOR.—The term ‘Federal financial regulator’ means—
“(A) Board of Governors of the Federal Reserve System and the Federal Reserve
banks, as applicable;
“(B) Commodity Futures Trading Commission;
“(C) Department of the Treasury;
“(D) Federal Deposit Insurance Corporation;
“(E) Federal Housing Finance Agency;
“(F) National Credit Union Administration;
“(G) Office of the Comptroller of the Currency;
“(H) Consumer Financial Protection Bureau; and
“(I) Securities and Exchange Commission.
“(2) REQUESTING PERSON.—The term ‘requesting person’—
“(A) means any entity that is required to be chartered, licensed, supervised or
registered by that agency; and
“(B) includes State agencies and self-regulatory organizations.
“(b) Response.—Not later than 180 days after filing a written request for individualized
interpretive guidance with respect to the application of a statute, rule or policy under the
jurisdiction of a Federal financial regulator, the agency shall provide a final, complete and
written response to the requesting person. This subsection shall not apply to requests for
guidance that the Federal financial regulator determine lack substance.
“(c) Other Matters.—With respect to matters delegated or otherwise under the jurisdiction of
self-regulatory organizations, including national securities exchanges, boards of trade, and
similar entities, the self-regulatory organization shall be subject to the same requirements as a
Federal financial regulator under this section.

“9902. Interstate sandbox activities

“(a) Definitions.—In this section:
“(1) FEDERAL FINANCIAL REGULATOR.—The term ‘Federal financial regulator’ means the
 Federal agency described in section 9901(a)(1) that would typically exercise jurisdiction
over the product or service made available in the State financial regulatory sandbox, or the
Department of the Treasury, in the case of a matter only within the jurisdiction of a State.
“(2) FINANCIAL COMPANY.—The term ‘financial company’ means a business entity
primarily engaged in activities that are financial in nature, as described in section 4(k)(4) of
the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)(4)).
“(3) HOST STATE.—The term ‘host State’ means a State in which a financial company is
not operating in the State financial regulatory sandbox of that State.
“(4) INNOVATIVE.—The term ‘innovative’ means new or emerging technology, or new uses
of existing technology, that—
“(A) provides a financial product, service, business model, or delivery mechanism to
the public; and
“(B) has no substantially comparable, widely available analogue in common use in
the United States.
“(5) STATE FINANCIAL REGULATOR.—The term ‘State financial regulator’ includes State
agencies that regulate, supervise, or license banks, trust companies, credit unions, consumer
credit, consumer protection, money transmission, securities, commodities, and similar areas.
“(6) STATE FINANCIAL REGULATORY SANDBOX.—The term ‘State financial regulator sandbox’
means a program created under State law that allows a financial company to make an
innovative financial product or service available to customers within that State during a
defined period in order to permit regulatory dialogue, data sharing amongst regulators and
financial companies, and to promote an assessment of potential changes in law, rule, or
policy to facilitate the appropriate supervision of financial technology.
“(b) Business Conducted.—A financial company in good standing in a State financial
regulatory sandbox and operating for not less than 6 months in that sandbox program, may do
business nationally under the standards of this section, if the State financial regulator and the
applicable Federal financial regulator jointly approve the application of the financial company. If
approved, the state financial regulator and the Federal financial regulator may agree upon
reasonable adjustments to the number of customers that may be served, increased bonding or
collateral requirements, and similar conditions which may be appropriate for conducting business
nationally.
“(c) State Sandbox Requirements.—A State financial regulatory sandbox shall contain the
following components for financial companies to be eligible to do business nationally under this
section:
“(1) A limited sandbox period of not more than 36 months.
“(2) Consumer protection requirements, which may include disclosures, bonding, and
insurance requirements;
“(3) Authority to conduct examinations of the financial company.
“(4) A background investigation of the financial company and its officers, directors,
members, managers and key employees, prior to commencing business.
 “(d) Decision.—Upon submission of an application by a financial company to conduct
business nationally under subsection (b), the State financial regulator and Federal financial
regulator shall jointly issue a decision within 120 days with respect to that application,
irrespective of any supplemental information with respect to the application that may be
requested after initial filing. The Federal financial regulator shall have the authority to conduct a
joint examination of any financial company doing business nationally under this section.
“(e) Factors.—The State financial regulator and Federal financial regulator shall consider the
following factors in rendering a decision on the application:
“(1) Whether the product or service offered may be offered in a safe and sound manner
on a national scale.
“(2) Whether the management and capital of the financial company is commensurate with
national scale.
“(3) Risk management plans of the financial company.
“(4) Conduct of the financial company to date in the State regulatory sandbox, and any
past regulatory actions, including actions against officers, directors, members, managers and
key employees.
“(5) Other factors determined by the State and Federal financial regulators to be material.
“(f) Election.—A host State may elect not to permit financial companies operating under this
section to do business in their State through issuance of an executive order by the Governor of
that State.
“(g) Innovative.—A product or service made available nationally under this section through a
State financial regulatory sandbox shall be innovative.
“(h) Rules of Construction.—This section shall not be construed to extend to permit—
“(1) a financial company to engage in any activities for which a charter, license,
registration or for which permission would be required under Federal or State law but for
the innovative financial product or service being offered by the company, except to the
extent the financial company would be required to obtain a charter, license or other
authorization required in a host State;
“(2) failure to comply with any applicable portion of State law required by the State
financial regulatory sandbox, or failure to comply with any applicable portion of Federal
law, unless authorized on a limited basis by the Federal financial regulator to achieve the
purposes of this section and the State financial regulatory sandbox; or
“(3) lending activities in excess of the maximum statutory rate of interest permissible in a
State.”.
(b) Technical and Conforming Amendment.—The table of contents for subtitle VI of title 31,
United States Code, as amended by section 101(b) of this Act, is amended by adding at the end
the following:
“99.Responsible interagency coordination
9901”.
SEC. 802. STATE MONEY TRANSMISSION LAW
COORDINATION RELATING TO DIGITAL ASSETS.
(a) In General.—In order to increase uniformity, reduce regulatory burden, and enhance
consumer protection, the States, through the Conference of State Bank Supervisors and the
Money Transmission Regulators Association, shall, not later than 2 years after the date of
enactment of this Act, ensure uniform treatment of digital assets for the purposes of state money
transmission laws on the following matters:
(1) Whether digital assets are subject to money transmission licensing requirements, as
appropriate, which shall include the exchange of digital assets for legal tender and vice
versa.
(2) Treatment of payment stablecoins within the scope of money transmission laws.
(3) Non-applicability to persons or software that engage in validation of transactions,
non-custodial wallet providers, or software or hardware development.
(4) Tangible net worth and permissible investment requirements.
(5) Disclosures, reporting, and recordkeeping.
(6) Common examination and examiner training standards, including common customer
identification, anti-money laundering, and sanctions best practices developed in
consultation with the Financial Crimes Enforcement Network and the Office of Foreign
Assets Control.
(b) Regulations.—If the Director of the Bureau of Consumer Financial Protection Bureau
determines that a State does not have the requirements of subsection (a) in effect by law
(including regulations) that are substantively consistent with that of the several States on the date
that is 2 years after the date of enactment of this section, the Director shall adopt rules applicable
to that State that achieve the purposes of subsection (a) and that are consistent with the standards
adopted in the States that have the requirements of subsection (a) in effect. The Director may
extend the deadline under this section for not more than 1 year if a State has shown a good faith
effort towards implementation. The Director may promulgate regulations to monitor State
compliance with this subsection.

SEC. 803. ESTABLISHMENT OF SELF-REGULATORY

ORGANIZATIONS FOR DIGITAL ASSETS.
(a) In General.—Chapter 98 of title 31, United States Code, as amended by section 501(a) of
this Act, is amended by adding at the end the following:

“9806. Establishment of self-regulatory organizations for digital

assets
“(a) Definitions.—In this section:
“(1) APPROPRIATE COMMISSION.—The term ‘appropriate commission’ means the
Commodity Futures Trading Commission or the Securities and Exchange Commission, or
both, as applicable, based on the commission that has statutory jurisdiction over a digital
 asset intermediary and acts as the primary registration or licensing authority, consistent with
paragraph (3) of section 9801.
“(2) INFORMATION PROCESSING SERVICES.—The term ‘information processing services’—
“(A) means the business of—
“(i) collecting, processing, or preparing for distribution or publication of, or
assisting, participating in, or coordinating the distribution or publication of,
information with respect to transactions in or quotations for a digital asset; or
“(ii) distributing or publishing on a current and continuing basis, information
with respect to the transactions or quotations described in clause (i); and
“(B) does not include—
“(i) any newspaper, news magazine, or business or financial publication of
general and regular circulation;
“(ii) any self-regulatory organization; and
“(iii) any other entity as the Securities and Exchange Commission and the
Commodity Futures Trade Commission may jointly exclude by rule.
“(3) NONMEMBER PROFESSIONAL.—The term ‘nonmember professional’ means any person
who—
“(A) is a digital asset intermediary; and
“(B) is a not a member of a registered self-regulatory organization or affiliated
organization.
“(4) REGISTRATION INFORMATION.—The term ‘registration information’ means the
information reported in connection with the licensing, registration, or other authorization of
digital asset intermediaries and their associated persons, including disciplinary actions,
regulatory, judicial, and arbitration proceedings, and other information required by law or
self-regulatory organization rule, and the source and status of such information.
“(b) Registration; Application.—An association of digital asset intermediaries may be
registered as a self-regulatory organization, under the terms and conditions provided in this
section and in accordance with the provisions of section 9808, by jointly filing with the
Securities and Exchange Commission and the Commodity Futures Trading Commission an
application for registration, in such form as the commissions may require, containing the rules of
the association and such other information and documents which may be prescribed as necessary
or appropriate in the public interest or for customer protection.
“(c) Determinations by Commissions Requisite to Registration.—An association of digital
asset intermediaries shall not be registered as a self-regulatory organization unless a majority of
the members of each of the Securities and Exchange Commission and the Commodity Futures
Trading Commission, voting separately, determine that—
“(1) by reason of the number and the scope of their transactions, the organization will be
able to carry out the purposes of this section;
“(2) the organization is so organized and has the capacity to be able to carry out the
purposes of this section and other applicable State and Federal laws, and, subject to any rule
or order of the appropriate commission, to enforce compliance by its members and persons
associated with its members, with the provisions of applicable law, the rules thereunder, and
the rules of the organization;
“(3) the rules of the organization provide that any digital asset intermediary may become
a member of the organization and any person may become associated with a member
thereof;
“(4) the rules of the organization assure a fair representation of its members, including
startup and emerging companies, in the selection of its directors and administration of its
affairs;
“(5) the rules of the organization provide for the equitable allocation of reasonable dues,
fees, and other charges among members and other persons using any facility or system
which the organization operates or controls;
“(6) the rules of the organization—
“(A) are designed to—
“(i) prevent fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade;
“(ii) foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and facilitating
transactions in digital assets;
“(iii) remove impediments to and perfect the mechanism of a free and open
market, and;
“(iv) protect customers and the public interest; and
“(B) are not designed to—
“(i) permit unfair discrimination between customers and digital asset
intermediaries;
“(ii) fix minimum profits;
“(iii) impose any schedule or fix rates of commissions, allowances, discounts,
or other fees to be charged by its members; or
“(iv) regulate by virtue of any authority conferred by law matters not related to
the purposes of this section or the administration of the organization;
“(7) the rules of the organization provide that, subject to any rule or order of the
appropriate commission, its members and persons associated with its members shall be
appropriately disciplined for violation of any provision of applicable law, the rules
thereunder, or the rules of the organization, by expulsion, suspension, limitation of
activities, functions, and operations, fine, censure, being suspended or barred from being
associated with a member, or any other fitting sanction;
“(8) the rules of the organization are in accordance with the provisions of subsection (h)
and, in general, provide a fair procedure for the disciplining of members and persons
associated with members, the denial of membership to any person seeking membership
therein, the barring of any person from becoming associated with a member thereof, and the
 prohibition or limitation by the organization of any person with respect to access to services
offered by the association or a member thereof;
“(9) the rules of the organization do not impose any burden on competition not necessary
or appropriate in furtherance of the purposes of this section;
“(10) the requirements of subsection (d), insofar as the requirements may be applicable,
are satisfied; and
“(11) the rules of the organization include provisions governing the form and content of
quotations relating to digital assets, and the rules relating to quotations shall be designed to
produce fair and informative quotations, to prevent fictitious or misleading quotations, and
to promote orderly procedures for collecting, distributing, and publishing quotations.
“(d) Rules; Provision for Registration of Affiliated Organization.—
“(1) IN GENERAL.—The Securities and Exchange Commission and the Commodity Futures
Trading Commission may permit or require the rules of an association applying for
registration to provide for the admission of an organization registered as an affiliated
organization pursuant to subsection (e), to participate in the applicant organization as an
affiliate thereof, under terms permitting powers and responsibilities to the affiliate, and
under such other appropriate terms and conditions, as may be provided by the rules of the
applicant organization, if such rules appear to the commissions jointly to be necessary or
appropriate in the public interest or for customer protection and to carry out the purposes of
this section.
“(2) DUTIES AND POWERS OF THE COMMISSIONS.—The duties and powers of the Securities and
Exchange Commission and the Commodity Futures Trading Commission with respect to
any organization or affiliate organization shall in no way be limited by reason of any such
affiliation.
“(e) Registration as Affiliated Organization; Prerequisites; Association Rules.—
“(1) IN GENERAL.—An applicant organization shall not be registered as an affiliated
organization unless it appears that—
“(A) such organization, notwithstanding that it does not satisfy the requirements set
forth in subsection (c)(1), will, forthwith upon the registration thereof, be admitted to
affiliation with an organization registered as a self-regulatory organization pursuant to
subsection (c), in the manner and under the terms and conditions provided by the rules
of the registered self-regulatory organization in accordance with subsection (d); and
“(B) such organization and its rules satisfy the requirements set forth in paragraphs
(2) through (11) of subsection (c).
“(2) EXCEPTION.—Any restrictions upon membership of an applicant organization shall
not be less stringent than in the case of the registered self-regulatory association with which
the organization is to be affiliated.
“(f) Dealings With Nonmember Professionals.—
“(1) IN GENERAL.—The rules of a self-regulatory organization may provide that no
member thereof shall deal with any nonmember professional except at the same prices, for
the same commissions or fees, and on the same terms and conditions as are by such member
 accorded to the general public.
“(2) RULE OF CONSTRUCTION.—Nothing in this subsection shall be construed to prevent any
member of a registered self-regulatory organization from granting to any other member of
any other registered self-regulatory organization any discount, allowance, commission, or
special terms, in connection with a digital asset transaction.
“(g) Denial of Membership.—
“(1) IN GENERAL.—Membership in a registered self-regulatory organization under this
section shall be limited to digital asset intermediaries.
“(2) DENIAL FOR PUBLIC INTEREST OR CONSUMER PROTECTION.—
“(A) IN GENERAL.—A registered self-regulatory organization may, and in cases in
which the appropriate commission, by order, directs as necessary or appropriate in the
public interest or for customer protection, deny membership to any person, and bar
from becoming associated with a member any person, who is subject to a statutory
disqualification within the laws under the jurisdiction of that commission.
“(B) NOTICE.—A registered self-regulatory organization shall file notice with the
appropriate commission, in such form and containing such information as the
appropriate commission shall require, not less than 30 days before admitting any
person to membership or permitting any person to become associated with a member,
if the association knew, or in the exercise of reasonable care should have known, that
such person was subject to a statutory disqualification.
“(3) PROCEDURE.—
“(A) IN GENERAL.—A registered self-regulatory organization may—
“(i) deny membership to, or condition the membership of, a digital asset
intermediary if—
“(I) the intermediary does not meet such standards of financial
responsibility or operational capability or such intermediary or any natural
person associated with such intermediary does not meet such standards of
training, experience, and competence as are prescribed by the rules of the
organization; or
“(II) the intermediary or person associated with the intermediary has
engaged and there is a reasonable likelihood she will again engage in acts or
practices inconsistent with just and equitable principles of trade; and
“(ii) examine and verify the qualifications of an applicant to become a member
and the natural persons associated with the applicant in accordance with
procedures established by the rules of the organization.
“(B) ASSOCIATION.—A registered self-regulatory organization may—
“(i) bar a natural person from becoming associated with a member or condition
the association of a natural person with a member if such natural person—
“(I) does not meet such standards of training, experience, and competence
as are prescribed by the rules of the organization; or
 “(II) has engaged and there is a reasonable likelihood she will again
engage in acts or practices inconsistent with just and equitable principles of
trade; and
“(ii) examine and verify the qualifications of an applicant to become a person
associated with a member in accordance with procedures established by the rules
of the organization and require a natural person associated with a member, or any
class of such natural persons, to be registered with the organization in accordance
with procedures so established.
“(C) BAR ON ASSOCIATION.—A registered self-regulatory organization may bar any
person from becoming associated with a member if such person does not agree—
“(i) to supply the organization with such information with respect to its
relationship and dealings with the member as may be specified in the rules of the
organization; and
“(ii) to permit examination of its records to verify the accuracy of any
information so supplied.
“(4) DENIAL FOR TYPE OF BUSINESS.—A registered self-regulatory organization may deny
membership to a digital asset intermediary not engaged in a type of business in which the
rules of the organization require members to be engaged, provided that no self-regulatory
organization may deny membership to a digital asset intermediary by reason of the amount
of such type of business done by such intermediary or the other types of business in which
the intermediary is engaged.
“(h) Discipline of Registered Self-regulatory Organization Members and Persons Associated
With Members; Summary Proceedings.—
“(1) DISCIPLINE.—
“(A) NOTIFICATION.—In any proceeding by a registered self-regulatory organization
to determine whether a member or person associated with a member should be
disciplined (other than a summary proceeding pursuant to paragraph (3)), the
organization shall bring specific charges, notify such member or person of, give the
person an opportunity to defend against, such charges, and keep a record.
“(B) STATEMENT.—A determination by an organization to impose discipline under
subparagraph (A) shall be supported by a statement setting forth—
“(i) any act or practice in which the member or person associated with a
member has been found to have engaged, or which such member or person has
been found to have omitted;
“(ii) the specific provision of law, the rules thereunder, or the rules of the
organization which any such act or practice, or omission to act, is charged with
violating; and
“(iii) the sanction imposed and a justification for the sanction.
“(2) DENIAL OF MEMBERSHIP OR SERVICES.—
“(A) NOTIFICATION.—In any proceeding by a registered self-regulatory organization
 to determine whether a person shall be denied membership, barred from becoming
associated with a member, or prohibited or limited with respect to access to services
offered by the organization or a member thereof (other than a summary proceeding
pursuant to paragraph (3), the organization shall—
“(i) notify such person of and give the person an opportunity to be heard;
“(ii) provide the person the specific grounds for denial, bar, or prohibition or
limitation under consideration; and
“(iii) maintain a record.
“(B) STATEMENT.—A determination by the organization to deny membership, bar a
person from becoming associated with a member or prohibit or limit a person with
respect to access to services offered by the organization or a member under
subparagraph (A) shall be supported by a statement setting forth the specific grounds
on which the denial, bar, or prohibition or limitation is based.
“(3) SUMMARY PROCEEDING.—
“(A) IN GENERAL.—A registered self-regulatory organization may summarily—
“(i) suspend a member or person associated with a member who has been and is
expelled or suspended from any other self-regulatory organization or barred or
suspended from being associated with a member of another self-regulatory
organization;
“(ii) suspend a member who is in such financial or operating difficulty that the
organization determines and so notifies the appropriate commission that the
member cannot be permitted to continue to do business as a member with safety
to customers, creditors, other members, or the organization; or
“(iii) limit or prohibit any person with respect to access to services offered by
the organization if clause (i) or (ii) is applicable to such person or, in the case of a
person who is not a member, if the organization determines that such person does
not meet the qualification requirements or other prerequisites for such access and
such person cannot be permitted to continue to have such access with safety to
customers, creditors, members, or the organization.
“(B) OPPORTUNITY FOR HEARING.—Any person aggrieved by a summary action
described in subparagraph (A) shall be promptly afforded an opportunity for a hearing
by the organization in accordance with the provisions of paragraph (1) or (2).
“(C) STAY.—The appropriate commission, by order, may stay a summary action
described in subparagraph (A) on its own motion or upon application by any person
aggrieved thereby, if the commission determines summarily or after notice and
opportunity for hearing (which hearing may consist solely of the submission of
affidavits or presentation of oral arguments) that the stay is consistent with the public
interest and customer protection.
“(i) Obligation to Maintain Registration, Disciplinary, and Other Data.—
“(1) MAINTENANCE OF SYSTEM TO RESPOND TO INQUIRIES.—A registered self-regulatory
organization shall establish and maintain—
 “(A) a system for collecting and retaining registration information; and
“(B) a website, including an application programming interface, to receive and
promptly respond to inquiries regarding registration information on its members and
their associated persons.
“(2) RECOVERY OF COSTS.—A registered self-regulatory organization may charge persons
making inquiries described in paragraph (1)(B), other than individual customers of digital
asset intermediaries, reasonable fees for responses.
“(3) PROCESS FOR DISPUTED INFORMATION.—Each registered self-regulatory association shall
adopt rules establishing a process for disputing the accuracy of information provided in
response to inquiries under this subsection.
“(4) LIMITATION ON LIABILITY.—A registered self-regulatory organization, or any digital
asset intermediary reporting information to such an organization, shall not have any liability
to any person for any actions taken or omitted in good faith under this subsection.
“(j) Avoidance of Duplicative Rules.—
“(1) IN GENERAL.—Each self-regulatory organization registered pursuant to subsection (a)
of this section shall issue rules as necessary to avoid duplicative or conflicting rules
applicable to any digital asset intermediary which is a member of a national securities
exchange, board of trade, contract market, registered securities association, registered
futures association or similar self-regulatory organization.
“(2) OTHER MEMBERSHIP.—A digital asset intermediary shall not be required to become a
member of another self-regulatory organization unless the intermediary performs activities
with financial assets other than digital assets.
“(3) NON-DIGITAL ASSET ACTIVITIES.—
“(A) RULES BY COMMISSIONS.—The Securities and Exchange Commission and the
Commodity Futures Trading Commission shall jointly prescribe rules under which a
digital asset intermediary that is a member, or affiliate, of a self-regulatory
organization under this section may perform activities with financial assets other than
digital assets, if such activities are not a majority of the business of an intermediary
and are conducted in a responsible manner, without membership in another
self-regulatory organization.
“(B) RULES BY SELF-REGULATORY ORGANIZATIONS.—A registered self-regulatory
organization under this section shall adopt rules governing activities with financial
assets other than digital assets, which shall be consistent with existing law, rule,
guidance or industry best practices or the rules of other self-regulatory organizations.”.
(b) Technical and Conforming Amendment.—The table of sections for chapter 98 of title 31,
United States Code, as amended by section 501(b) of this Act, is amended by adding at the end
the following:
“9806. Establishment of self-regulatory organizations for digital assets.”.

SEC. 804. REGISTRATION, RULEMAKING, AND

SUPERVISION OF DIGITAL ASSET SELF-REGULATORY
ORGANIZATIONS.
(a) Registration Procedures; Notice of Filing; Other Regulatory Agencies.—
(1) PUBLICATION OF NOTICE.—
(A) IN GENERAL.—The Securities and Exchange Commission and Commodity
Futures Trading Commission shall, upon the filing of an application for registration as
a self-regulatory organization, publish notice of that filing and afford interested
persons an opportunity to submit written data, views, and arguments concerning the
application.
(B) REQUIREMENTS.—Not later than 90 days after the date on which notice is
published under subparagraph (A), or within a longer period to which the applicable
applicant consents, the Securities and Exchange Commission and Commodity Futures
Trading Commission shall—
(i) by joint order, grant registration of the self-regulatory organization; or
(ii) institute proceedings to determine whether registration should be denied.
(C) PROCEEDINGS.—
(i) IN GENERAL.—Proceedings described in subparagraph (B)(ii) shall include
notice of the grounds for denial under consideration and opportunity for hearing
before the joint commissions.
(ii) HEARING.—A hearing described in clause (i) shall be concluded not later
than 180 days after the date on which notice of the filing of the application for
registration is published under subparagraph (A).
(iii) FURTHER PROCEEDINGS.—
(I) SEPARATE VOTES.—At the conclusion of a hearing conducted under this
subparagraph, and not later than the end of the 180-day period described in
clause (ii), the Securities and Exchange Commission and Commodity
Futures Trading Commission, voting separately, shall act to grant or deny the
applicable registration.
(II) EFFECT OF FAILURE TO ISSUE JOINT ORDER.—The failure of the Securities
and Exchange Commission and Commodity Futures Trading Commission to
issue a joint order during the period described in subclause (I) shall be
deemed to be a denial of the applicable registration.
(D) CONSIDERATIONS.—With respect to an application for registration described in
this paragraph, the Securities and Exchange Commission and Commodity Futures
Trading Commission shall—
(i) grant registration if all statutory requirements have been met and the rules
thereunder with respect to the applicant are satisfied; and
(ii) deny such registration if the commissions do not make the findings
described in clause (i).
(2) WITHDRAWAL FROM REGISTRATION.—
 (A) IN GENERAL.—A self-regulatory organization may, upon such terms and
conditions as the Securities and Exchange Commission and Commodity Futures
Trading Commission, by rule, determine necessary or appropriate in the public interest
or for the protection of customers, withdraw from registration described in paragraph
(1) by filing a written notice of withdrawal with the commissions.
(B) CONSIDERATIONS.—
(i) IN GENERAL.—If the Securities and Exchange Commission and Commodity
Futures Trading Commission, voting separately, each finds that a self-regulatory
organization is no longer in existence or has ceased to do business in the capacity
specified in its application for registration, the commissions may cancel the
registration of the organization.
(ii) EFFECT OF FAILURE TO VOTE.—The failure to issue a joint order described in
clause (i) shall be deemed to maintain the registration of the applicable
self-regulatory organization.
(C) EFFECT OF WITHDRAWAL, CANCELLATION, SUSPENSION, OR REVOCATION.—Upon
withdrawal by registration or the cancellation, suspension, or revocation of the
registration of a self-regulatory organization, the registration of any association
affiliated with the organization shall automatically terminate.
(b) Proposed Rule Changes; Notice; Proceedings.—
(1) IN GENERAL.—Except as otherwise provided in paragraph (2)—
(A) a self-regulatory organization shall file with the appropriate commission, in
accordance with the rules of that commission, copies of any proposed rule or any
proposed change in, addition to, or deletion from the rules of such self-regulatory
organization accompanied by a concise general statement of the basis and purpose of
such proposed rule change;
(B) the appropriate commission shall—
(i) as soon as practicable after the date on which a proposed rule change is filed
under subparagraph (A), publish notice of that filing together with the terms of
substance of the proposed rule change or a description of the subjects and issues
involved; and
(ii) give interested persons an opportunity to submit written data, views, and
arguments concerning that proposed rule change;
(C) no proposed rule change described in subparagraph (A) shall take effect unless
approved by the appropriate commission or otherwise permitted in accordance with the
provisions of this subsection; and
(D) no proposed rule change described in subparagraph (A) relating to a matter
under the jurisdiction of more than 1 commission may be filed.
(2) APPROVAL PROCESS.—
(A) APPROVAL PROCESS ESTABLISHED.—
(i) IN GENERAL.—Except as provided in clause (ii), not later than 30 days after
 the date of publication of a proposed rule change under paragraph (1), the
appropriate commission shall—
(I) by order, approve or disapprove the proposed rule change; or
(II) institute proceedings under subparagraph (B) to determine whether the
proposed rule change should be disapproved.
(ii) EXTENSION OF TIME PERIOD.—The appropriate commission may extend the
period established under clause (i) by not more than an additional 30 days, if—
(I) the commission determines that a longer period is appropriate and
publishes the reasons for such determination; or
(II) the self-regulatory organization that filed the proposed rule change
consents to a longer period.
(B) PROCEEDINGS.—
(i) NOTICE AND HEARING.—If the appropriate commission does not approve or
disapprove a proposed rule change under subparagraph (A), the commission shall
provide to the self-regulatory organization that filed the proposed rule change—
(I) notice of the grounds for disapproval under consideration; and
(II) opportunity for hearing, to be concluded not later than 180 days after
the date of publication of notice of the filing of the proposed rule change.
(ii) ORDER OF APPROVAL OR DISAPPROVAL.—
(I) IN GENERAL.—Except as provided in subclause (II), not later than 180
days after the date of publication under paragraph (1), the appropriate
commission shall issue an order approving or disapproving the proposed rule
change.
(II) EXTENSION OF TIME PERIOD.—The appropriate commission may extend
the period for issuance under clause (I) by not more than 60 days, if—
(aa) the commission determines that a longer period is appropriate
and publishes the reasons for such determination; or
(bb) the self-regulatory organization that filed the proposed rule
change consents to the longer period.
(C) STANDARDS FOR APPROVAL AND DISAPPROVAL.—
(i) APPROVAL.—The appropriate commission shall approve a proposed rule
change of a self-regulatory organization if the commission finds that the proposed
rule change is consistent with law.
(ii) TIME FOR APPROVAL.—The appropriate commission may not approve a
proposed rule change earlier than 30 days after the date of publication under
paragraph (1), unless the commission finds good cause for so doing and publishes
the reason for the finding.
(D) RESULT OF FAILURE TO INSTITUTE OR CONCLUDE PROCEEDINGS.—A proposed rule
change shall be deemed to have been approved by the appropriate commission, if—
 (i) the commission does not approve or disapprove the proposed rule change or
begin proceedings under subparagraph (B), within the period described in
subparagraph (A); or
(ii) the commission does not issue an order approving or disapproving the
proposed rule change under subparagraph (B), within the period described in
subparagraph (B)(ii).
(E) PUBLICATION DATE BASED ON FEDERAL REGISTER PUBLISHING.—
(i) IN GENERAL.—For purposes of this paragraph, if, after filing a proposed rule
change with the appropriate commission under subsection (b)(1), a self-regulatory
organization publishes a notice of the filing of that proposed rule change, together
with the substantive terms of that proposed rule change, on a publicly accessible
website, the commission shall send the notice to the Federal Register for
publication of the proposed rule change under subsection (b)(1) not later than 5
days after the date on which that website publication is made.
(ii) EFFECT OF FAILING TO SEND.—If the appropriate commission fails to send
notice under clause (i) during the 5-day period described in that clause, the date of
publication shall be deemed to be the date on which the applicable website
publication is made.
(3) INTERNAL GOVERNANCE.—With respect to a proposed rule relating to the internal
operation, governance, and procedures of a self-regulatory organization, or a proposed rule
relating to the determination of the legal character of a digital asset—
(A) the proposed rule shall be—
(i) subject to approval by the Securities and Exchange Commission and the
Commodity Futures Trading Commission; and
(ii) deemed to be approved on the date that is 5 days after the date on which the
proposed rule is submitted, unless either commission objects to the proposed rule
change; and
(B) if a commission objects to the proposed rule change under subparagraph
(A)(ii)—
(i) the commission shall, in a public format, provide to the self-regulatory
organization and the non-objecting commission the reasons for the objection;
(ii) the self-regulatory organization, and interested members of the public, may
provide written comments to the commissions during the 20-day period beginning
on the date on which the objection is noted; and
(iii) the Securities and Exchange Commission and the Commodity Futures
Trading Commission, voting separately, shall jointly issue an order approving or
disapproving the proposed rule, with the failure to issue such a joint order being
deemed to be approval of the proposed rule.
(4) EXCEPTION.—
(A) IN GENERAL.—Notwithstanding paragraphs (2) and (3), a proposed rule change
 shall take effect upon filing if self-certified by a self-regulatory organization as—
(i) constituting a stated policy, practice, or interpretation with respect to the
meaning, administration, or enforcement of an existing rule of the self-regulatory
organization;
(ii) establishing or changing a due, fee, or other charge imposed by the
self-regulatory organization on any person, whether or not the person is a member
of the self-regulatory organization; or
(iii) notwithstanding any other provision of this subsection, and subject to
subsection (c)(7), necessary for customer protection, the maintenance of fair and
orderly markets, or the safeguarding of digital assets, customer funds, or other
property, in which case the proposed rule change under shall be filed promptly
thereafter in accordance with paragraph (1).
(B) ENFORCEMENT.—
(i) IN GENERAL.—Any proposed rule change of a self-regulatory organization
that has taken effect under subparagraph (A) may be enforced by the organization
to the extent the rule change is not inconsistent with applicable law.
(ii) SUSPENSION.—
(I) IN GENERAL.—At any time during the 60-day period beginning on the
date on which a proposed rule change is filed under paragraph (1), the
appropriate commission may temporarily and summarily suspend the change
in the rules of the applicable self-regulatory organization on a temporary
basis, if the commission determines that such action is necessary or
appropriate in the public interest, for customer protection, or to otherwise
comply with applicable law.
(II) REQUIREMENTS.—If a commission takes action under subclause (I), the
commission shall institute proceedings under paragraph (2)(B) to determine
whether the applicable proposed rule should be approved or disapproved.
(iii) RULE OF CONSTRUCTION.—Action under this subparagraph shall not affect
the validity or force of a proposed rule change during the period the rule change
was in effect and shall not be reviewable in a judicial proceeding, nor deemed to
be “final agency action” for purposes of section 704 of title 5, United States Code.
(5) RULE OF CONSTRUCTION RELATING TO FILING DATE OF PROPOSED RULE CHANGES.—
(A) IN GENERAL.—For purposes of this subsection, the date of filing of a proposed
rule change shall be deemed to be the date on which the applicable commission
receives the proposed rule change.
(B) EXCEPTION.—A proposed rule has not been received by the applicable
commission for purposes of subparagraph (A), if, not later than 7 business days after
the date of receipt by the commission, the commission notifies the applicable
self-regulatory organization that such proposed rule change does not comply with the
rules of the commission relating to the required form of a proposed rule change, except
that if the commission determines that the proposed rule change is unusually lengthy
 and is complex or raises novel regulatory issues, the commission shall inform the
self-regulatory organization of such determination not later than 7 business days after
the date of receipt by the commission and, for the purposes of subparagraph (A), a
proposed rule change has not been received by the commission, if, not later than 21
days after the date of receipt by the commission, the commission notifies the
self-regulatory organization that the proposed rule change does not comply with the
rules of the commission relating to the required form of a proposed rule change.
(C) APPLICABILITY.—This paragraph shall not apply to a rule relating to the internal
operations, governance, and procedure of a self-regulatory organization.
(c) Amendment of Rules of Self-Regulatory Organizations.—
(1) IN GENERAL.—The appropriate commission may, by rule, abrogate, add to, and delete
from the rules of a self-regulatory organization as the commission determines necessary or
appropriate to ensure the fair administration of the self-regulatory organization or to
conform its rules to law or applicable rule, in the following manner:
(A) The appropriate commission shall notify the self-regulatory organization and
publish notice of the proposed rulemaking in the Federal Register, which shall include
the text of the proposed amendment to the rules of the self-regulatory organization and
a statement of the commission’s reasons, including any pertinent facts, for
commencing the proposed rulemaking.
(B)(i) The appropriate commission shall give interested persons an opportunity for
the oral presentation of data, views, and arguments, in addition to an opportunity to
make written submissions.
(ii) A transcript shall be kept of any oral presentation under clause (i).
(C) A rule adopted pursuant to this paragraph shall incorporate the text of the
amendment to the rules of the self-regulatory organization and a statement of the
appropriate commission regarding the basis for amendment of the rule, which shall
include an identification of any facts on which the commission considers its
determination to amend the rules of the self-regulatory organization to be based,
including the reasons for the commission’s conclusions relating to any of facts that
were disputed in the rulemaking.
(2) NOTICE AND COMMENT.—Except as provided in subparagraphs (A), (B), and (C) of
paragraph (1), rulemaking under this subsection shall be in accordance with the procedures
specified in section 553 of title 5, United States Code, for rulemaking not on the record.
(3) RULE OF CONSTRUCTION.—Nothing in this subsection may be construed to impair or
limit the authority of the appropriate commission to make, or to modify or alter the
procedures the commission may follow in making, rules pursuant to any other authority
granted by law that is consistent with this subsection..
(4) EFFECT OF RULES.—Any amendment to the rules of a self-regulatory organization made
by the appropriate commission pursuant to this subsection shall be considered for all
purposes to be part of the rules of such self-regulatory organization and shall not be
considered to be a rule of the commission.
(5) CONSULTATIONS.—With respect to rules described in subsection (b)(4)(A)(iii), the
 appropriate commission shall consult with and consider the views of the other commission
and the Secretary of the Treasury before abrogating, adding to, and deleting from those
rules, except where the commission determines that an emergency exists requiring
expeditious or summary action and publishes its reasons for taking such action.
(d) Notice of Disciplinary Action Taken by Self-Regulatory Organization Against a Member
or Participant; Review of Action by Appropriate Commission; Procedure.—
(1) IN GENERAL.—If a self-regulatory organization imposes any final disciplinary sanction
on any member of the organization or participant with respect to the organization, denies
membership or participation to any applicant, or prohibits or limits any person with respect
to access to services offered by the organization or member of the organization, or if any
self-regulatory organization imposes any final disciplinary sanction on any person
associated with a member or bars any person from becoming associated with a member, the
self-regulatory organization shall promptly file notice of such action with the appropriate
commission.
(2) REVIEW.—
(A) IN GENERAL.—Any action with respect to which a self-regulatory organization is
required under paragraph (1) to file notice shall be subject to review by the appropriate
commission for the applicable member, participant, applicant, or other person, on its
own motion, or upon application by any person aggrieved if filed not later than 30 days
after the date on which the notice was filed with the appropriate commission and
received by such aggrieved person, or within such longer period as the appropriate
commission may determine.
(B) APPLICATION.—Application to the appropriate commission for review, or the
institution of review by the commission on its own motion, shall not operate as a stay
of an action described in subparagraph (A) unless the appropriate commission
otherwise orders, summarily or after notice and opportunity for hearing on the question
of a stay, which may consist solely of the submission of affidavits or presentation of
oral arguments.
(C) STAYS.—For the purposes of this paragraph, each of the appropriate commissions
shall establish for appropriate cases an expedited procedure for consideration and
determination of the question of a stay.
(3) APPLICABILITY.—This subsection shall apply only to the extent that a self-regulatory
organization imposes any final disciplinary sanction for—
(A) a violation of the Federal law or the rules thereunder; or
(B) a violation of a rule of the self-regulatory organization, as to which a proposed
change would be required to be filed under this section.
(e) Disposition of Review; Cancellation, Reduction, or Remission of Sanction.—
(1) IN GENERAL.—In any proceeding to review a final disciplinary sanction imposed by a
self-regulatory organization on a member of the organization or participant with respect to
the organization or a person associated with such a member, after notice and opportunity for
hearing, which may consist solely of consideration of the record before the self-regulatory
organization and opportunity for the presentation of supporting reasons to affirm, modify, or
 set aside the sanction—
(A) if the appropriate commission finds that such member, participant, or person
associated with a member has engaged in such acts or practices, or has omitted such
acts, as the self-regulatory organization has found that person to have engaged in or
omitted, that such acts or practices, or omissions to act, are in violation of law, the
rules thereunder, or the rules of the self-regulatory organization, and that such
provisions are, and were applied in a manner, consistent with law, the commission, by
order, shall—
(i) make a declaration regarding that finding; and
(ii) as appropriate, affirm the sanction imposed by the self-regulatory
organization, modify the sanction in accordance with paragraph (2), or remand to
the self-regulatory organization for further proceedings; or
(B) if the appropriate commission does not make a finding described in
subparagraph (A), the commission shall, by order—
(i) set aside the sanction imposed by the self-regulatory organization; and
(ii) if appropriate, remand to the self-regulatory organization for further
proceedings.
(2) MODIFICATION.—If the appropriate commission for a member, participant, or person
associated with a member, having due regard for the public interest and customer
protection, finds, after a proceeding under paragraph (1), that a sanction imposed by a
self-regulatory organization upon such member, participant, or person associated with a
member imposes any burden on competition not necessary or appropriate or is excessive or
oppressive, the commission may cancel, reduce, or require the remission of such sanction.
(f) Dismissal of Review Proceeding.—
(1) IN GENERAL.—In any proceeding to review the denial of membership or participation
in a self-regulatory organization to any applicant, the barring of any person from becoming
associated with a member of a self-regulatory organization, or the prohibition or limitation
by a self-regulatory organization of any person with respect to access to services offered by
the self-regulatory organization or any member of the organization, if the appropriate
commission, after notice and opportunity for hearing, which may consist solely of
consideration of the record before the self-regulatory organization and opportunity for the
presentation of supporting reasons to dismiss the proceeding or set aside the action of the
self-regulatory organization, finds that the specific grounds on which that denial, bar, or
prohibition or limitation is based exist in fact, that such denial, bar, or prohibition or
limitation is in accordance with the rules of the self-regulatory organization, and that such
rules are, and were applied in a manner, consistent with law, the appropriate commission, by
order, shall dismiss the proceeding.
(2) FAILURE TO MAKE FINDING.—If the appropriate commission does not make a finding
described in paragraph (1), or if the commission finds that the applicable denial, bar,
prohibition, or limitation imposes any burden on competition not necessary or appropriate,
the commission, by order, shall set aside the action of the self-regulatory organization and
require it to admit such applicant to membership or participation, permit such person to
 become associated with a member, or grant such person access to services offered by the
self-regulatory organization or member thereof.
(g) Suspension or Revocation of Self-Regulatory Organization Registration; Other
Sanctions.—
(1) IN GENERAL.—If necessary or appropriate in the public interest, for customer
protection, or otherwise in furtherance of the purposes of this section, the appropriate
commissions, voting separately, may issue a joint order suspending for a period not
exceeding 1 year or revoking the registration of a self-regulatory organization, or censuring
or imposing limitations upon the activities, functions, and operations of a self-regulatory
organization, if, the commissions find, on the record after notice and opportunity for
hearing, that the self-regulatory organization—
(A) has violated or is unable to comply with any provision of law, rule, or the rules
of the organization without reasonable justification or excuse; or
(B) has failed to enforce compliance with any provision by a member of the
organization or a person associated with a member of the organization.
(2) EXPULSION.—The appropriate commission may, by order, if necessary or appropriate
in the public interest, for customer protection, or otherwise in furtherance of the purposes of
this section, to suspend for a period not exceeding 1 year or expel from a self-regulatory
organization, any member of a self-regulatory organization, or participant with respect to a
self-regulatory organization, if such member or participant is subject to an order of the
commission or if the commission, on the record after notice and opportunity for hearing,
determines that the member or participant has willfully violated, or has effected any
transaction for any other person who the member or participant had reason to believe was
violating, with respect to such transaction any applicable provision of law under the
jurisdiction of the commission.
(3) BAR ON ASSOCIATION.—The applicable commission may, by order, if necessary or
appropriate in the public interest, for customer protection, or otherwise in furtherance of the
purposes of this section, to suspend for a period not exceeding 1 year or to bar any person
from being associated with a member of such self-regulatory organization, if the person is
subject to an order of the appropriate commission or if the appropriate commission finds, on
the record after notice and opportunity for hearing, that the person has willfully violated, or
has effected any transaction for any other person who the person associated with a member
had reason to believe was violating, with respect to the transaction any applicable provision
of law under the jurisdiction of the commission.
(4) REMOVAL FROM OFFICE.—If necessary or appropriate in the public interest, for customer
protection, or otherwise in furtherance of the purposes of this section, the Securities and
Exchange Commission and the Commodity Futures Trading Commission, voting separately,
may, by joint order, remove from office or censure any person who is, or at the time of the
alleged misconduct was, an officer or director of a self-regulatory organization, if the
commissions find, on the record after notice and opportunity for a hearing before an
impartial hearing officer, that such person has willfully violated any provision of law, the
rules thereunder, or the rules of such self-regulatory organization, willfully abused the
authority of the person, or without reasonable justification or excuse has failed to enforce
 compliance with any provision of law by any member or person associated with a member.
(h) Interagency Working Group.—The Securities and Exchange Commission and the
Commodity Futures Trading Commission shall each appoint an equal number of employees,
under the supervision of the Chairman of the respective commissions, to an interagency working
group, which shall coordinate and facilitate the responsibilities and powers of the respective
commissions under chapter 98 of title 31, United States Code, as added by this Act.

SEC. 805. RECORDS AND REPORTS; DUTIES AND

POWERS OF SELF-REGULATORY ORGANIZATION.
(a) In General.—Chapter 98 of title 31, United States Code, as amended by section 803(a) of
this Act, is amended by adding at the end the following:

“9807. Duties and powers of self-regulatory organizations

“(a) In General.—Each member of a self-regulatory organization shall make and keep for
prescribed periods electronic records and disseminate reports as the self-regulatory organization,
by rule, prescribes as necessary or appropriate in the public interest, for customer protection or
otherwise in furtherance of the purposes of section.
“(b) Records Subject to Examination.—
“(1) PROCEDURES FOR COOPERATION WITH OTHER AGENCIES.—
“(A) IN GENERAL.—All records of persons described in subsection (a) are subject at
any time, or from time to time, to reasonable periodic, special, or other examinations
by representatives of the self-regulatory organization of the member.
“(B) NOTICE.—Before conducting an examination under subparagraph (A), the
examining authority shall—
“(i) inform all other relevant regulatory agencies and self-regulatory
organizations with jurisdiction over the member regarding the proposed
examination; and
“(ii) consult concerning the feasibility and desirability of coordinating such
examination with examinations conducted by other entities with a view to
avoiding unnecessary duplication and undue regulatory burden.
“(C) EXAMINATIONS OF MEMBERS.—Upon a showing of good cause, the Securities and
Exchange Commission or the Commodity Futures Trading Commission, as applicable,
may conduct a special examination of a self-regulatory organization or a member of
such an organization.
“(D) REPORT.—With respect to an examination under this paragraph, the examining
authority shall share such information, including reports of the examination, customer
complaint information, and other nonpublic regulatory information, as may be
appropriate to foster a coordinated approach to regulatory oversight for members that
are subject to examination by more than 1 examining authority.
“(E) REQUIREMENTS WHEN EXAMINATION NOT ONGOING.—A self-regulatory organization,
at all times when an examination under this paragraph is not in progress, shall conduct
 ongoing supervision of members of the organization, as may be provided by the rules
of the self-regulatory organization.
“(2) CLARIFICATION.—Notwithstanding any other provision of this subsection, the records
of a member of a self-regulatory organization shall not be subject to routine periodic
examinations by the Securities and Exchange Commission or the Commodity Futures
Trading Commission.
“(3) EXAMINATION STANDARDS.—Each self-regulatory organization shall—
“(A) adopt tailored supervision and examination standards commensurate with the
size and complexity of the organization and risks faced by members of the
organization;
“(B) to the extent reasonably possible, reduce the regulatory burden for startup and
emerging companies, including through the use of self-certification and expedited or
automated examinations; and
“(C) in consultation with other self-regulatory organizations, develop standard form
customer agreements for the execution of digital asset transactions.
“(c) Self-regulatory Organizations.—
“(1) IN GENERAL.—The Securities and Exchange Commission and Commodity Futures
Trading Commission, shall, by rule or order, in order to foster cooperation and coordination
among self-regulatory organizations—
“(A) with respect to any person who is a member of or participant in more than one
self-regulatory organization, relieve any self-regulatory organization of any
responsibility—
“(i) to receive regulatory reports from the person;
“(ii) to examine the person for compliance; or
“(iii) to carry out other specified regulatory functions with respect to the
person; and
“(B) allocate among self-regulatory organizations the authority to adopt rules with
respect to matters as to which, in the absence of the allocation, such self-regulatory
organizations share authority.
“(2) CONSIDERATIONS.—
“(A) IN GENERAL.—In making a rule, or entering an order, under paragraph (1), the
appropriate commission shall take into consideration the regulatory capabilities and
procedures of the applicable self-regulatory organizations, availability of staff,
convenience of location, unnecessary regulatory duplication, and all other factors
applicable to customer protection, cooperation and coordination among self-regulatory
organizations, and the development of a healthy digital asset market, which may
include providing for the acceptance of examination reports prepared by a
self-regulatory organization under this chapter with respect to a digital asset
intermediary for which digital asset activities constitute a majority of business, in lieu
of examinations conducted by other self-regulatory organizations.
 “(B) NOTIFICATION REQUIREMENT.—The Securities and Exchange Commission or
Commodity Futures Trading Commission, by rule or order, may require that a
self-regulatory organization relieved of any responsibility under this paragraph, and
any person with respect to which such responsibility relates, to take such steps as are
specified in any rule or order to notify customers of, and persons doing business with,
the person of the limited nature of such self-regulatory organization’s responsibility for
such person’s acts, practices, and course of business.
“(d) Missing and Stolen Digital Assets.—Each member of a self-regulatory organization or
other financial institution conducting digital asset transactions shall report to the Financial
Crimes Enforcement Network of the Department of the Treasury such information as may be
required by rule relating to digital asset theft or missing private keys for the possession or control
of digital assets.
“(e) Confidentiality.—
“(1) IN GENERAL.—Section 24 of the Securities Exchange Act of 1934 (15 U.S.C. 78x)
shall apply to the sharing of information by the Securities and Exchange Commission and
Commodity Futures Trading Commission in accordance with this subsection. The
commissions and a self-regulatory organization shall ensure that all confidential information
is not inappropriately disclosed.
“(2) APPROPRIATE DISCLOSURE NOT PROHIBITED.—Nothing in this subsection may be
construed to authorize the Securities and Exchange Commission and Commodity Futures
Trading Commission or a self-regulatory organization to—
“(A) withhold information from Congress; or
“(B) prevent the commissions or an organization from complying with—
“(i) a request for information from any Federal or State department or agency
requesting the information for purposes within the scope of its jurisdiction; or
“(ii) an order of a court of the United States in an action brought by the United
States or the commissions.
“(f) Best Execution.—A self-regulatory organization, in consultation with members of the
organization, the Securities and Exchange Commission, and the Commodity Futures Trading
Commission, shall develop rules governing the best execution of digital asset transactions.
“(g) Initial Determination of Legal Character.—
“(1) IN GENERAL.—
“(A) INITIAL DETERMINATION.—A self-regulatory organization may make an initial
determination of the legal character of a digital asset as a security (as defined in section
3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))), an ancillary asset (as
defined in section 41(a) of the Securities Exchange Act of 1934), a commodity (as
defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a)), or as otherwise
provided by law, upon the written request of a member of the organization.
“(B) CONSULTATION; HEARINGS.—Upon receipt of a request under subparagraph (A), a
self-regulatory organization—
 “(i) shall consult with the commissions and make an initial determination
regarding the request, after public notice and comment, not later than 45 days
after the date on which the organization receives the request; and
“(ii) may hold a public hearing with respect to an initial determination
described in clause (i) if—
“(I) the matter is of significant precedential value or complex; or
“(II) holding such a hearing is otherwise in the public interest.
“(2) PUBLICATION.—A self-regulatory organization shall publish all determinations made
under paragraph (1) on the website of the organization.
“(h) Objection to Initial Determination.—
“(1) IN GENERAL.—
“(A) DEADLINE FOR OBJECTION.—Not later than 30 days after the date on which an
initial determination is made under subsection (g), the Securities and Exchange
Commission or Commodity Futures Trading Commission may object to the initial
determination of the self-regulatory organization by issuing an order, after public
notice, comment, and a hearing.
“(B) EFFECT OF OBJECTION.—Upon an objection under subparagraph (A), the initial
determination to which the objection applies shall be held in abeyance.
“(2) ORDER.—
“(A) IN GENERAL.—Not later than 60 days after the date on which a commission
objects under paragraph (1), the commissions shall, after public notice and comment of
not less than 30 days, issue an order resolving the objection and the status of the digital
asset, as described in subsection (g)(1)(A), which may include joint responsibility of
the commissions.
“(B) FAILURE TO ISSUE.—If the Securities and Exchange Commission and the
Commodity Futures Trading Commission fail to issue a joint order under subparagraph
(A), the determination of the self-regulatory organization under subsection (g) shall
become final, unless an action is brought in an appropriate district court of the United
States of competent jurisdiction.”.
(b) Technical and Conforming Amendment.—The table of sections for chapter 98 of title 31,
United States Code, as amended by section 803(b) of this Act, is amended by adding at the end
the following:
“9807. Duties and powers of self-regulatory organizations.”.