,,ii #aagth ,,congress #b;d ,session ,s4 #dcef ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #g1 #bjbb,ms4 ,lummis 7for herself and ,mrs4 ,gillibrand7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to provide for responsible financial innovation and to bring digital assets within the regulatory perimeter4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,lummis-,gillibrand ,responsible ,financial ,innovation ,act4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4,sec4 #b4 ,definitions4,,title ,i--,definitions,sec4 #aja4 ,definitions4,,title ,,ii--,responsible taxation of digital assets,sec4 #bja4 ,gain from disposition of digital assets4,sec4 #bjb4 ,information reporting requirements imposed on brokers with respect to digital assets4,sec4 #bjc4 ,sources of income4,sec4 #bjd4 ,decentralized autonomous organizations4,sec4 #bje4 ,tax treatment of digital asset lending agreements and related matters4,sec4 #bjf4 ,implementing effective ,,irs guidance4,sec4 #bjg4 ,analysis of retirement investing in digital assets4,sec4 #bjh4 ,digital asset mining and staking4,sec4 #bji4 ,conforming amendments4,,title ,,iii--,responsible securities innovation,sec4 #cja4 ,securities offerings involving certain intangible assets4,sec4 #cjb4 ,termination of specified periodic disclosure requirements4,sec4 #cjc4 ,guidance relating to satisfactory control location4,sec4 #cjd4 ,custody and customer protection rules4,,title ,,iv--,responsible ,commodities ,innovation,sec4 #dja4 ,definitions4,sec4 #djb4 ,reporting and recordkeeping4,sec4 #djc4 ,,cftc jurisdiction over digital asset transactions4,sec4 #djd4 ,registration of digital asset exchanges4,sec4 #dje4 ,violations4,sec4 #djf4 ,market reports4,sec4 #djg4 ,bankruptcy treatment of digital assets4,sec4 #djh4 ,identified banking products4,sec4 #dji4 ,financial institutions definition4,sec4 #daj4 ,offsetting the costs of digital asset regulation4,,title ,v--,responsible consumer protection,sec4 #eja4 ,responsible consumer protection4,sec4 #ejb4 ,source code version of digital assets4,sec4 #ejc4 ,settlement finality4,sec4 #ejd4 ,notice to customers2 enforcement4,sec4 #eje4 ,right to individual management of digital assets4,sec4 #ejf4 ,technical and conforming amendments4,,title ,,vi--,responsible payments innovation,sec4 #fja4 ,issuance of payment stablecoins4,sec4 #fjb4 ,sanctions compliance responsibilities of payment stablecoin issuers4,sec4 #fjc4 ,use of the official digital currency of the ,people's ,republic of ,china on ,government devices4,sec4 #fjd4 ,certificate of authority to commence banking4,sec4 #fje4 ,holding company supervision of covered depository institutions4,sec4 #fjf4 ,implementation rules to preserve adequate competition in payment stablecoins4,sec4 #fjg4 ,financial ,crimes ,enforcement ,network ,innovation ,laboratory4,,title ,,vii--,responsible banking innovation,sec4 #gja4 ,study on use of distributed ledger technology for reduction of risk in depository institutions4,sec4 #gjb4 ,eligibility for ,federal ,reserve services to depository institutions4,sec4 #gjc4 ,routing transit number issuance4,sec4 #gjd4 ,clarifying application review times with respect to the ,federal banking agencies4,sec4 #gje4 ,examination standards for digital asset activities4,sec4 #gjf4 ,asset custody for depository institutions and certain other entities4,sec4 #gjg4 ,reputation risk2 requirements for account termination requests and orders4,sec4 #gjh4 ,conforming amendments4,,title ,,viii--,responsible interagency coordination,sec4 #hja4 ,timeline for interpretive guidance issued by ,federal financial agencies4,sec4 #hjb4 ,interstate sandbox activities4,sec4 #hjc4 ,state money transmission coordination relating to digital assets4,sec4 #hjd4 ,information sharing among ,federal and ,state financial regulators4,sec4 #hje4 ,analysis of decentralized finance markets and technologies4,sec4 #hjf4 ,analysis of energy consumption in digital asset markets4,sec4 #hjg4 ,analysis of self-regulation and registered digital asset associations4,sec4 #hjh4 ,cybersecurity standards for digital asset intermediaries4,sec4 #hji4 ,advisory ,committee on ,financial ,innovation4 #b4 ,definitions ,in this ,act3 7#a7 ,commodity ,the term commodity has the meaning given the term in section #a;a of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a;a74 7#b7 ,digital asset2 digital asset intermediary2 distributed ledger technology2 payment stablecoin2 smart contract2 virtual currency ,the terms digital asset1 digital asset intermediary1 distributed ledger technology1 payment stablecoin1 smart contract1 and virtual currency have the meanings given the terms in section #ihja of title #ca1 ,united ,states ,code1 as added by section #aja of this ,act4 7#c7 ,security ,except as otherwise expressly provided1 the term security has the meaning given the term in section #c7;a7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a774 ,i ,definitions #aja4 ,definitions 7a7 ,in general ,subtitle ,,vi of title #ca1 ,united ,states ,code1 is amended by adding after chapter #ig the following3 #ih ,digital assets ,sec4 #ihja4 ,definitions4 #ihja4 ,definitions ,in this chapter3 7#a7 ,depository institution ,the term depository institution has the meaning given the term in section #ai7;b77#a7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #dfa7;b77#a774 7#b7 ,digital asset ,the term digital asset-- 7,a7 means a natively electronic asset that-- 7i7 confers economic1 proprietary1 or access rights or powers2 and 7ii7 is recorded using cryptographically secured distributed ledger technology1 or any similar analogue2 and 7,b7 includes-- 7i7 virtual currency and ancillary assets in accordance with section #b7;c77#b77;,f7 of the ,commodity ,exchange ,act2 7ii7 payment stablecoins in accordance with section #djc of the ,commodity ,futures ,modernization ,act of #bjjj 7#g ,u4,s4,c4 #bg;a72 and 7iii7 any other security or commodity that meets the requirements of subparagraph 7,a74 7#c7 ,digital asset intermediary ,the term digital asset intermediary-- 7,a7 means-- 7i7 a person who holds a license1 registration1 or other similar authorization1 as specified by this chapter1 the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a et seq471 the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 the ,corporation of ,foreign ,bondholders ,act1 #aicc 7#ae ,u4,s4,c4 #gg;bb et seq471 the ,trust ,indenture ,act of #aici 7#ae ,u4,s4,c4 #gg;aaa et seq471 the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq471 the ,securities ,investor ,protection ,act of #aigj 7#ae ,u4,s4,c4 #gh;aaa et seq471 the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq471 the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#a71 and the ,omnibus ,small ,business ,capital ,formation ,act of #aihj 7#ae ,u4,s4,c4 #hj;c71 that may conduct market activities relating in digital assets2 or 7ii7 a person who is required by law to hold a license1 registration1 or other similar authorization described in clause 7i72 7,b7 includes-- 7i7 a person who holds a license1 registration1 or other similar authorization under ,state or ,federal law that issues a payment stablecoin2 and 7ii7 a person who is required by law to hold a license1 registration1 or other similar authorization described in clause 7i72 and 7,c7 does not include a depository institution4 7#d7 ,distributed ledger technology ,the term distributed ledger technology means technology that enables the operation and use of a ledger that-- 7,a7 is shared across a set of distributed nodes that participate in a network and store a complete or partial replica of the ledger2 7,b7 is synchronized between the nodes2 7,c7 has data appended to the ledger by following the specified consensus mechanism of the ledger2 7,d7 may be accessible to anyone or restricted to a subset of participants2 and 7,e7 may require participants to have authorization to perform certain actions or require no authorization4 7#e7 ,payment stablecoin ,the term payment stablecoin means a digital asset that is-- 7,a7 redeemable1 on demand1 on a #a-to-#a basis for instruments denominated in ,united ,states dollars2 7,b7 defined as legal tender under section #eajc or under the laws of a foreign country 7excluding digital assets72 7,c7 issued by a business entity2 7,d7 accompanied by a statement from the issuer that the asset is redeemable1 as specified in subparagraph 7,a71 from the issuer or another identified person2 7,e7 backed by #a or more financial assets 7excluding other digital assets71 consistent with subparagraph 7,a72 and 7,f7 intended to be used as a medium of exchange4 7#f7 ,person who provides digital asset services ,the term person who provides digital asset services means-- 7,a7 a digital asset intermediary2 7,b7 a financial institution1 as defined in section #a;a of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a;a72 7,c7 any other person conducting digital asset activities pursuant to a ,federal or ,state charter1 license1 registration1 or other similar authorization2 and 7,d7 any person who is required by law to hold a license1 registration1 or other similar authorization described in subparagraph 7,c74 7#g7 ,security ,the term security has the meaning given the term in section #c7;a7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a774 7#h7 ,smart contract ,the term smart contract-- 7,a7 means-- 7i7 computer code deployed to a distributed ledger technology network that executes an instruction based on the occurrence or nonoccurrence of specified conditions2 or 7ii7 any similar analogue2 and 7,b7 includes taking possession or control of a digital asset and transferring the asset or issuing executable instructions for these actions4 7#i7 ,source code version ,the term source code version-- 7,a7 means the source code version comprising a digital asset2 and 7,b7 does not include software used to manage or facilitate transactions in a digital asset4 7#aj7 ,virtual currency ,the term virtual currency-- 7,a7 means a digital asset that-- 7i7 is used primarily as a medium of exchange1 unit of account1 store of value1 or any combination of such functions2 7ii7 is not legal tender1 as described in section #eajc2 and 7iii7 does not derive value from or is backed by an underlying financial asset 7except other digital assets72 and 7,b7 includes a digital asset1 consistent with subparagraph 7,a7 that is accompanied by a statement from the issuer that a denominated or pegged value will be maintained and be available upon redemption from the issuer or other identified person1 based solely on a smart contract4 4 7b7 ,technical and conforming amendment ,the table of contents for subtitle ,,vi of title #ca1 ,united ,states ,code1 is amended by adding at the end the following3 #ih4 ,digital assets#ihja 4 ,,ii ,responsible taxation of digital assets #bja4 ,gain from disposition of digital assets 7a7 ,in general ,part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #aci;,i the following new section3 #aci;,j4 ,gain or loss from sale or exchange of virtual currency 7a7 ,in general ,gross income shall not include gain or loss from the sale or exchange of virtual currency in a personal transaction 7as defined in section #ihh7;e77#c77 for goods and services4 7b7 ,limitation 7#a7 ,in general ,the amount of gain or loss excluded from gross income under subsection 7a7 with respect to a sale or exchange shall not exceed #bjj4 7#b7 ,aggregation rule ,for purposes of this subsection1 all sales or exchanges which are part of the same transaction 7or a series of related transactions7 shall be treated as one sale or exchange4 7c7 ,other sales or exchanges ,subsection 7a7 shall not apply to sales or exchanges in which virtual currency is sold or exchanged for cash1 cash equivalents1 digital assets 7as defined in section #ihja of title #ca1 ,united ,states ,code71 or other securities or commodities4 7d7 ,virtual currency ,for purposes of this section1 the term virtual currency has the meaning given such term in section #ihja of title #ca1 ,united ,states ,code4 7e7 ,inflation adjustment ,in the case of any taxable year beginning in a calendar year after #bjbc1 the dollar amount in subsection 7b7 shall be increased by an amount equal to-- 7#a7 such dollar amount1 multiplied by 7#b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjbb for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 ,any increase determined under the preceding sentence shall be rounded to the nearest multiple of #ej4 4 7b7 ,clerical amendment ,the table of sections for part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to section #aci;,i the following new item3 ,sec4 #aci;,j4 ,gain or loss from sale or exchange of virtual currency4 4 7c7 ,reporting of gains or losses ,the ,secretary shall issue regulations providing for information returns on virtual currency transactions for which gain or loss is recognized4 7d7 ,effective date ,the amendments made by this section shall apply to transactions entered into after ,december #ca1 #bjbb4 #bjb4 ,information reporting requirements imposed on brokers with respect to digital assets 7a7 ,clarification of definition of broker ,section #fjde7;c77#a77;,d7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7,d7 any person who 7for consideration7 stands ready in the ordinary course of a trade or business to effect sales of digital assets at the direction of their customers4 4 7b7 ,reporting of digital assets 7#a7 ,brokers 7,a7 ,definition of digital asset ,section #fjde7;g77#c77;,d7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7,d7 ,digital asset ,the term digital asset has the meaning given such term in section #ihja of title #ca1 ,united ,states ,code4 4 7,b7 ,applicable date ,section #fjde7;g77#c77;,c77iii7 of such ,code is amended to read as follows3 7iii7 ,january #a1 #bjbe1 in the case of any specified security which is a digital asset1 and 4 7#b7 ,furnishing of information ,section #fjde;,a7d7 of such ,code is amended to read as follows3 7d7 ,return requirement for certain transfers of digital assets not otherwise subject to reporting ,any broker1 with respect to any transfer 7which is not part of a sale or exchange executed by such broker7 during a calendar year of a covered security which is a digital asset from an account wholly controlled and maintained by such broker to an account which is not maintained by1 or an address not associated with1 a person that such broker knows or has reason to know is also a broker1 shall make a return for such calendar year1 in such form as determined by the ,secretary1 showing the information otherwise required to be furnished with respect to transfers subject to subsection 7a74 ,information reported by brokers under this section shall be limited to customer information that is voluntarily provided by the customer and held by the broker for a legitimate business purpose4 4 7c7 ,effective dates ,the amendments made by this section shall apply to returns required to be filed and statements required to be furnished after ,december #ca1 #bjbe4 #bjc4 ,sources of income 7a7 ,in general ,paragraph 7#b7 of section #hfd7;b7 of the ,internal ,revenue ,code of #aihf is amended by redesignating subparagraph 7,c7 as subparagraph 7,d7 and by inserting after subparagraph 7,b7 the following new subparagraph3 7,c7 ,digital assets 7i7 ,in general ,trading in digital assets through a resident broker1 commission agent1 custodian1 digital asset exchange1 or other independent agent4 7ii7 ,trading for taxpayer's own account ,trading in digital assets for the taxpayer's own account1 whether by the taxpayer or the taxpayer's employees or through a resident broker1 commission agent1 custodian1 digital asset exchange1 or other agent1 and whether or not any such employee or agent has discretionary authority to make decisions in effecting the transactions4 ,this clause shall not apply in the case of a dealer in digital assets4 7iii7 ,definitions ,for purposes of this subparagraph-- 7,i7 ,digital asset exchange ,the term digital asset exchange means a centralized or decentralized platform which facilitates the transfer of digital assets4 7,,ii7 ,digital asset ,the term digital asset has the meaning given such term in section #ihja of title #ca1 ,united ,states ,code4 7iv7 ,limitation ,this subparagraph shall apply only if the digital assets are of a kind customarily dealt in on a digital asset exchange and if the transaction is of a kind customarily consummated at such exchange4 4 7b7 ,conforming amendment ,subparagraph 7,d7 of section #hfd7;b77#b7 of the ,internal ,revenue ,code of #aihf1 as redesignated by subsection 7a71 is amended by striking 7,a77i7 and 7,b77i7 and inserting 7,a77i71 7,b77i71 and 7,c77i74 7c7 ,effective date ,the amendments made by this section shall apply to sales and exchanges after ,december #ca1 #bjbb4 #bjd4 ,decentralized autonomous organizations 7a7 ,in general ,section #ggja7;a7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#ea7 ,decentralized autonomous organizations 7,a7 ,in general ,the default classification of a decentralized autonomous organization shall be as a business entity which is not a disregarded entity4 7,b7 ,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 #eja7;c77#g73 7i7 ,treasury management1 including mining and staking of digital assets 7as defined in section #ihja of title #ca1 ,united ,states ,code74 7ii7 ,raising funds for a charitable purpose4 7,c7 ,decentralized autonomous organization ,the term decentralized autonomous organization means an organization-- 7i7 which utilizes smart contracts 7as defined in section #ihja of title #ca1 ,united ,states ,code7 to effectuate collective action for a business1 commercial1 charitable1 or similar entity1 7ii7 governance of which is achieved primarily on a distributed basis1 and 7iii7 which is properly incorporated or organized under the laws of a ,state or foreign jurisdiction as a decentralized autonomous organization1 cooperative1 foundation1 or any similar entity4 4 7b7 ,effective date ,except as provided by subsection 7c71 the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbb4 #bje4 ,tax treatment of digital asset lending agreements and related matters 7a7 ,in general ,subsection 7a7 of section #ajeh of the ,internal ,revenue ,code of #aihf is amended by striking 7as defined in section #abcf7;c774 7b7 ,fixed term ,paragraph 7#a7 of subsection 7b7 of section #ajeh of the ,internal ,revenue ,code of #aihf is amended by inserting 1 including a fixed-term transfer that occurs in the ordinary course of a securities lending or investment management business after transferred4 7c7 ,basis ,subsection 7c7 of section #ajeh of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following3 ,all appropriate basis adjustments to an agreement under subsection 7b7 shall be made1 as determined by the ,secretary1 including upon the return of the lent securities to the taxpayer44 7d7 ,securities ,section #ajeh of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsections3 7d7 ,securities ,for purposes of this section1 the term securities has the meaning given such term by section #abcf7;c71 except that such term includes any digital asset 7as defined in section #ihja of title #ca1 ,united ,states ,code7 and1 with respect to a digital asset1 does not require a call option4 7e7 ,income ,an amount equal to the income which would otherwise accrue to the lender but for a lending transaction under this section shall be included in gross income of the lender4 4 7e7 ,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 #aicc 7#ae ,u4,s4,c4 #gg;a et seq47 or the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq474 7f7 ,rulemaking authority ,the ,secretary of the ,treasury 7or the ,secretary's delegate7 may adopt rules to implement this section1 including the application of this section to forks1 airdrops1 and similar subsidiary value4 7g7 ,effective date ,the amendments made by this section shall apply to sales and exchanges after ,december #ca1 #bjbb4 #bjf4 ,implementing effective ,,irs guidance 7a7 ,in general ,not later than #a year after the date of the enactment of this ,act1 the ,secretary of the ,treasury 7or the ,secretary's delegate7 shall adopt guidance relating to the following3 7#a7 ,classification of forks1 airdrops1 and similar subsidiary value as taxable1 contingent upon the affirmative claim and disposition of the subsidiary value by a taxpayer4 ,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 claim and disposition of1 or disclaimer of1 subsidiary value4 7#b7 ,merchant acceptance of digital assets and the tax treatment of payments and receipts1 consistent with the amendments made by section #hjfjc of the ,infrastructure ,investment and ,jobs ,act1 as amended by section #bjc4 7#c7 ,treatment of digital asset mining and staking1 including mining and staking rewards1 in which income is not realized until disposition of the assets produced or received in connection with such activity1 in accordance with section #dea7l7 of the ,internal ,revenue ,code of #aihf 7as added by this ,act74 7#d7 ,classification of charitable contributions greater than #e1jjj of digital assets which are traded on established financial markets as contributions of readily valued property not requiring a qualified appraisal for purposes of section #agj7;f77#aa77;,a7 of the ,internal ,revenue ,code of #aihf1 as amended by this ,act4 7#e7 ,characterization of payment stablecoins 7as defined in section #ihja of title #ca1 ,united ,states ,code7 as indebtedness4 7b7 ,effective date ,the guidance adopted under this section shall be applicable on a prospective basis for taxable years beginning after ,december #ca1 #bjbc4 #bjg4 ,analysis of retirement investing in digital assets 7a7 ,not later than ,march #a1 #bjbc1 the ,comptroller ,general of the ,united ,states shall conduct a study and provide a report to the entities specified in subsection 7b7 regarding the following issues relating to retirement investing in digital assets3 7#a7 ,potential benefits to diversification and return of an investor's retirement portfolio4 7#b7 ,appropriate asset allocations1 including among other alternative investments4 7#c7 ,consumer education1 financial literacy and investment advisor training relating to digital assets4 7#d7 ,risk4 7#e7 ,legal and operational barriers to effective retirement investing in digital assets4 7#f7 ,any other topic determined to be material by the ,comptroller ,general relating to retirement investing in digital assets4 7b7 ,the ,comptroller ,general shall provide the report required by subsection 7a7 to the following3 7#a7 ,the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate4 7#b7 ,the ,committee on ,finance of the ,senate4 7#c7 ,the ,committee on ,health1 ,education1 ,labor1 and ,pensions of the ,senate4 7#d7 ,the ,committee on ,financial ,services of the ,house of ,representatives4 7#e7 ,the ,committee on ,ways and ,means of the ,house of ,representatives4 7#f7 ,the ,committee on ,education and ,labor of the ,house of ,representatives4 7#g7 ,the ,secretary of the ,treasury4 7#h7 ,the ,secretary of ,labor4 #bjh4 ,digital asset mining and staking 7a7 ,in general ,section #dea of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7l7 ,deferral of income recognition for digital asset activities ,in the case of a taxpayer who conducts digital asset mining or staking activities1 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 activities4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years beginning after ,december #ca1 #bjbb4 #bji4 ,conforming amendments 7a7 ,charitable contributions 7#a7 ,in general ,subclause 7,i7 of section #agj7;f77#aa77;,a77ii7 of the ,internal ,revenue ,code of #aihf is amended by inserting 1 digital assets 7as defined in section #ihja of title #ca1 ,united ,states ,code7 after #fjej,l7a77#b77;,b774 7#b7 ,effective date ,the amendment made by this subsection shall apply to taxable years beginning after ,december #ca1 #bjbb4 7b7 ,other conforming amendments 7#a7 ,in general ,title #ca1 ,united ,states ,code1 is amended-- 7,a7 in section #ecab7;a77#b7-- 7i7 by redesignating subparagraphs 7,a7 through 7,z7 as clauses 7i7 through 7xxvi71 respectively2 7ii7 in the matter preceding clause 7i71 as so designated1 by striking institution means-- and inserting institution-- 7,a7 means-- 2 7iii7 in clause 7xxvi71 as so designated1 by striking the period at the end and inserting 2 and2 and 7iv7 by adding at the end the following3 7,b7 does not include a decentralized autonomous organization1 as defined in section #ggja7;a7 of the ,internal ,revenue ,code of #aihf4 2 and 7,b7 in section #eccf7;a77#aa77;,b77#b7-- 7i7 by redesignating clause 7xxv7 as clause 7xxvi72 and 7ii7 by adding after clause 7xxv7 the following3 7xxv7 ,a decentralized autonomous organization1 as defined in section #ggja7;a7 of the ,internal ,revenue ,code of #aihf2 and 4 7#b7 ,anti-,money ,laundering ,act of #bjbj ,section #faaj7;a7 of the ,anti-,money ,laundering ,act of #bjbj 7division ,f of ,public ,law #aaf-bhc7 is amended by striking paragraph 7#a7 and inserting the following3 7,a7 by redesignating clauses 7xxv7 and 7xxvi7 as clauses 7xxvi7 and 7xxvii71 respectively1 and adjust the margins accordingly2 and 7,b7 by inserting after clause 7xxiv7 the following3 7,y7 a person engaged in the trade of antiquities1 including an advisor1 consultant1 or any other person who engages as a business in the solicitation or the sale of antiquities1 subject to regulations prescribed by the ,secretary2 4 4 ,,iii ,responsible securities innovation #cja4 ,securities offerings involving certain intangible assets ,title ,i of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq47 is amended by adding at the end the following3 #da4 ,securities offerings involving certain intangible assets 7a7 ,definitions ,in this section3 7#a7 ,ancillary asset 7,a7 ,in general ,the term ancillary asset means an intangible1 fungible asset that is offered1 sold1 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 contract1 as that term is used in section #b7;a77#a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#a774 7,b7 ,exclusion ,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 entity3 7i7 ,a debt or equity interest in that entity4 7ii7 ,liquidation rights with respect to that entity4 7iii7 ,an entitlement to an interest or dividend payment from that entity4 7iv7 ,a profit or revenue share in that entity solely from the entrepreneurial or managerial efforts of others4 7v7 ,any other financial interest in that entity4 7#b7 ,foreign private issuer ,the term foreign private issuer means a foreign issuer1 other than a foreign government1 except that the term does not include a foreign issuer that1 as of the last business day of the most recently completed fiscal quarter of the issuer1 satisfies the following conditions3 7,a7 ,more than #ej percent of the outstanding voting securities of the issuer are directly or indirectly owned by residents of the ,united ,states4 7,b7 ,any of the following3 7i7 ,the majority of the executive officers or directors of the issuer are citizens or residents of the ,united ,states4 7ii7 ,more than #ej percent of the assets of the issuer are located in the ,united ,states4 7iii7 ,the business of the issuer is principally administered in the ,united ,states4 7b7 ,disclosure requirements 7#a7 ,initial compliance with specified periodic disclosure requirements ,subject to paragraphs 7#d7 and 7#e71 an issuer engaged in business in or affecting interstate commerce1 or that is organized outside of the ,united ,states and is not a foreign private issuer1 that offers1 sells1 or otherwise provides a security through an arrangement or scheme that constitutes an investment contract1 as that term is used in section #b7;a77#a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#a771 and that provides or proposes to provide any holder of the security with an ancillary asset1 shall be subject to the periodic disclosure requirements under subsection 7c7 for the #a-year period beginning on the date that is #ahj days after the first date on which the security is offered1 sold1 or otherwise provided by the issuer1 if-- 7,a7 the average daily aggregate value of all ancillary assets offered1 sold1 or otherwise provided by the issuer in relation to the offer1 sale1 or provision of the security in all spot markets open to the public in the ,united ,states 7based on the knowledge of the issuer after due inquiry7 is greater than #e1jjj1jjj for the #ahj-;day period immediately succeeding the date of that first offer1 sale1 or provision2 and 7,b7 during the #ahj-;day period described in subparagraph 7,a71 the issuer1 or any person owning not less than #aj percent of any class of equity securities of the issuer1 engaged in entrepreneurial or managerial efforts that primarily determined the value of the ancillary asset4 7#b7 ,ongoing compliance with specified periodic disclosure requirements ,subject to paragraphs 7#d7 and 7#e71 an issuer that is engaged in business in or affecting interstate commerce1 or that is organized outside of the ,united ,states and is not a foreign private issuer1 that offers1 sells1 or otherwise provides a security through an arrangement or scheme that constitutes an investment contract1 as that term is used in section #b7;a77#a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#a771 and that provides the holder of the security with an ancillary asset in connection with the acquisition of the security1 shall be subject to the periodic disclosure requirements under subsection 7c7 for a given fiscal year of that issuer1 if1 in the immediately preceding fiscal year of the issuer 7or any portion thereof7-- 7,a7 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 #e1jjj1jjj1 based on the knowledge of the issuer after due inquiry2 and 7,b7 the issuer1 or any person owning not less than #aj percent of any class of equity securities of the issuer1 engaged in entrepreneurial or managerial efforts that primarily determined the value of the ancillary asset4 7#c7 ,transition rule ,subject to paragraphs 7#d7 and 7#e71 an issuer that is engaged in business in or affecting interstate commerce1 or that is organized outside of the ,united ,states and is not a foreign private issuer1 that offers1 sells1 or otherwise provides a security through an arrangement or scheme that constitutes an investment contract1 as that term is used in section #b7;a77#a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#a771 and that provides the holder of the security with an ancillary asset before ,january #a1 #bjbc1 in connection with the acquisition of the security shall be subject to the periodic disclosure requirements under subsection 7c7 beginning in the first fiscal year of the issuer that begins on or after that date1 if1 in the immediately preceding fiscal year of the issuer-- 7,a7 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 #e1jjj1jjj1 based on the knowledge of the issuer after due inquiry2 and 7,b7 the issuer1 or any person owning not less than #aj percent of any class of equity securities of the issuer1 engaged in entrepreneurial or managerial efforts that primarily determined the value of the ancillary asset4 7#d7 ,treatment of ancillary assets 7,a7 ,in general ,notwithstanding any other provision of law1 if an issuer issues a security through an arrangement or scheme that constitutes an investment contract1 as that term is used in section #b7;a77#a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#a771 is subject to paragraph 7#a71 7#b71 or 7#c71 and is in compliance with the periodic disclosure requirements under subsection 7c71 an ancillary asset provided directly or indirectly by the issuer shall be presumed-- 7i7 to be a commodity1 consistent with section #b7;c77#b77;,f7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #b7;c77#b77;,f772 and 7ii7 not to be a security under-- 7,i7 section #c7;a72 7,,ii7 such section #b7;a77#a72 7,,iii7 section #b7;a7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#b7;a772 7,,iv7 section #bjb7;a7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a772 or 7,v7 any applicable provision of ,state law4 7,b7 ,other persons ,a person who is not an issuer1 an entity controlled by an issuer 7including a person that acquires an ancillary asset from such an issuer for the purpose of resale or distribution of the ancillary asset71 or a person acting at the direction or on the behalf of an issuer shall be not required to treat an ancillary asset provided by an issuer as a security under this ,act or any provision of law described in subparagraph 7,a77ii74 7,c7 ,exception 7i7 ,in general ,subparagraph 7,a7 shall not apply to an ancillary asset if a court of the ,united ,states of competent jurisdiction1 after an appropriate proceeding1 issues an order finding that there is not a substantial basis for the presumption that the ancillary asset is a commodity and not a security under subparagraph 7,a74 7ii7 ,rules of construction ,nothing in this subparagraph shall be construed to preclude the ,commission from entering into a settlement agreement relating to violations or alleged violations of this section4 ,compliance under this section shall not be used in any administrative or judicial proceeding that an ancillary asset is a security4 7#e7 ,calculation ,for the purposes of paragraphs 7#a71 7#b71 and 7#c71 the calculation of daily aggregate value shall be based on data disclosed by spot markets or otherwise available to the public for inspection4 7c7 ,specified periodic disclosure requirements ,if an issuer is subject to paragraph 7#a71 7#b71 or 7#c7 of subsection 7b71 the issuer shall furnish1 or cause the relevant affiliate to furnish1 to the ,commission1 on a semi-annual basis1 information that the ,commission may1 by rule1 require relating to the issuer and any relevant ancillary asset1 as necessary or appropriate in the public interest or for the protection of investors1 which shall be exclusively comprised of the following3 7#a7 ,basic corporate information regarding the issuer1 including the following3 7,a7 ,the experience of the issuer in developing assets similar to the ancillary asset4 7,b7 ,if the issuer has previously provided ancillary assets to purchasers of securities1 information on the subsequent history of those previously provided ancillary assets1 including price history1 if the information is publicly available4 7,c7 ,the activities that the issuer has taken in the relevant disclosure period1 and is projecting to take in the #a-year period following the submission of the disclosure1 with respect to promoting the use1 value1 or resale of the ancillary asset 7including 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 asset74 7,d7 ,the anticipated cost of the activities of the issuer in subparagraph 7,c7 and whether the issuer has unencumbered1 liquid funds equal to that amount4 7,e7 ,to the extent the ancillary asset involves the use of a particular technology1 the experience of the issuer with the use of that technology4 7,f7 ,the backgrounds of the board of directors 7or equivalent body71 senior management1 and key employees of the issuer1 the experience or functions of whom are material to the value of the ancillary asset1 as well as any personnel changes relating to the issuer during the period covered by the disclosure4 7,g7 ,a description of the assets and liabilities of the issuer1 to the extent material to the value of the ancillary asset4 7,h7 ,a description of any legal proceedings in which the issuer is engaged 7including inquiries by governmental agencies into the activities of the issuer71 to the extent material to the value of the ancillary asset4 7,i7 ,risk factors relating to the impact of the issuer on1 or unique knowledge relating to1 the value of the ancillary asset4 7,j7 ,information relating to ownership of the ancillary asset by-- 7i7 persons owning not less than #aj percent of any class of equity security of the issuer2 and 7ii7 the management of the issuer4 7,k7 ,information relating to transactions involving the ancillary asset by the issuer with related persons1 promoters1 and control persons4 7,l7 ,recent sales or similar dispositions of ancillary assets by the issuer and affiliates of the issuer4 7,m7 ,purchases or similar dispositions of ancillary assets by the issuer and affiliates of the issuer4 7,n7 ,a going concern statement from the chief financial officer of the issuer or equivalent official1 signed under penalty of perjury1 stating whether the issuer maintains the financial resources to continue business as a going concern for the #a-year period following the submission of the disclosure1 absent a material change in circumstances4 7#b7 ,information relating to the ancillary asset1 including the following3 7,a7 ,a general description of the ancillary asset1 including the standard unit of measure with respect to the ancillary asset1 the intended or known functionality and uses of the ancillary asset1 the market for the ancillary asset1 other assets or services that may compete with the ancillary asset1 and the total supply of the ancillary asset or the manner and rate of the ongoing production or creation of the ancillary asset4 7,b7 ,if ancillary assets have been offered1 sold1 or otherwise provided by the issuer to investors1 intermediaries1 or resellers1 a description of the amount of assets offered1 sold1 or provided1 the terms of each such transaction1 and any contractual or other restrictions on the resale of the assets by intermediaries4 7,c7 ,if ancillary assets were distributed without charge1 a description of each distribution1 including the identity of any recipient that received more than #e percent of the total amount of the ancillary assets in any such distribution4 7,d7 ,the amount of ancillary assets owned by the issuer4 7,e7 ,for the #a-year period following the submission of the disclosure1 a description of the plans of the issuer to support 7or to cease supporting7 the use or development of the ancillary asset1 including markets for the ancillary asset and each platform or system that uses the ancillary asset4 7,f7 ,each third party not affiliated with the issuer1 the activities of which may have a material impact on the value of the ancillary asset4 7,g7 ,risk factors known to the issuer that may limit demand for1 or interest in1 the ancillary asset4 7,h7 ,the names and locations of the markets in which the ancillary asset is known by the issuer to be available for sale or purchase4 7,i7 ,to the extent available to the issuer1 the average daily price for a constant unit of value of the ancillary asset during the relevant reporting period1 as well as the #ab-month high and low prices for the ancillary asset4 7,j7 ,if applicable1 information relating to any external audit of the code and functionality of the ancillary asset1 including the entity performing the audit and the experience of the entity in conducting similar audits4 7,k7 ,if applicable1 any third-party valuation report or economic analysis regarding the ancillary asset or the projected market of the ancillary asset1 which shall include the entity performing the valuation or analysis and the experience of the entity in conducting similar reports or analyses4 7,l7 ,if the ancillary asset is intangible1 information relating to custody by the owner of the ancillary asset or a third party4 7,m7 ,information on intellectual property rights claimed or disputed relating to the ancillary asset4 7,n7 ,a description of the technology underlying the ancillary asset4 7,o7 ,any material tax considerations applicable to owning1 storing1 using1 or trading the ancillary asset4 7,p7 ,any material legal or regulatory considerations applicable to owning1 storing1 using1 or trading the ancillary asset1 including any legal proceeding that may impact the value of the ancillary asset4 7,q7 ,any other material factor or information that may impact the value of the ancillary asset and about which the issuer is reasonably aware4 7d7 ,application to successor entities and certain affiliates 7#a7 ,in general ,if an issuer would otherwise be subject to specified periodic disclosure requirements under subsection 7c7 and is no longer in operation1 any successor entity that directly or indirectly received not less than #ej percent of the proceeds raised by the sale of the related securities of that issuer1 and that is engaged in entrepreneurial or managerial efforts that primarily determine the value of the applicable ancillary asset1 shall furnish1 or cause to be furnished1 to the ,commission the information required under that subsection4 7#b7 ,certain affiliates ,if an entity controlled by an issuer is subject to specified periodic disclosure requirements under subsection 7c7 and is engaged in entrepreneurial or managerial efforts that primarily determine the value of an ancillary asset1 the entity may furnish to the ,commission the information required under that subsection4 7e7 ,voluntary disclosure ,an issuer that is not subject to the specified periodic disclosure requirements under subsection 7c7 and that offers or sells a security through an arrangement or scheme that constitutes an investment contract1 as that term is used in section #b7;a77#a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#a771 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 future4 7f7 ,exemptions ,the ,commission may1 by order1 exempt an ancillary asset from the specified periodic disclosure requirements under subsection 7c7 if the ,commission determines that the public policy goals of disclosure and consumer protection are not satisfied by requiring disclosures relating to an ancillary asset4 7g7 ,rule of construction ,if an issuer fails to comply with a provision of this section1 an ancillary asset provided by the issuer shall not be presumed to be a security under a provision of law described in subsection 7b77#d77;,a77ii71 solely because of such failure4 7h7 ,rules ,the ,commission may adopt rules and guidance to implement this section1 consistent with the statutory intent of this section4 4 #cjb4 ,termination of specified periodic disclosure requirements ,section #da of the ,securities ,exchange ,act of #aicd1 as added by section #cja of this ,act1 is amended by adding at the end the following3 7i7 ,termination of specified periodic disclosure requirements 7#a7 ,in general ,the obligation of an issuer to furnish the information required under subsection 7c7 shall terminate on the date that is #ij days1 or such shorter period as the ,commission may determine1 after the date on which the issuer files a certification described in paragraph 7#b74 7#b7 ,certification 7,a7 ,in general ,a certification filed under paragraph 7#a7 shall be supported by reasonable evidence1 based on the knowledge of the issuer filing the certification1 after due inquiry1 that-- 7i7 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 #ab-month period preceding the date on which the certification is filed was not greater than #e1jjj1jjj2 or 7ii7 during the #ab-month period preceding the date on which the certification is filed1 neither the applicable issuer1 nor any entity controlled by the applicable issuer1 engaged in entrepreneurial or managerial efforts that primarily determined the value of the ancillary asset4 7,b7 ,denial 7i7 ,in general ,subject to subparagraph 7,c77ii71 the ,commission may1 by majority vote and after notice and opportunity for hearing1 deny a certification filed under paragraph 7#a7 if the ,commission finds that the certification is not supported by substantial evidence4 7ii7 ,effect ,the denial1 under clause 7i71 of a certification filed under paragraph 7#a7-- 7,i7 shall terminate the certification so filed2 and 7,,ii7 shall not prevent the applicable issuer from filing another certification under paragraph 7#a71 if the re-filed certification is filed not earlier than #ahj days after the date on which the original certification is denied4 7,c7 ,pending status 7i7 ,in general ,termination of the disclosure requirements described in paragraph 7#a7 applicable to an issuer that has filed a certification under that paragraph shall be deferred pending review by the ,commission of the evidence supporting the certification4 7ii7 ,effect of delay ,if1 as of the date that is #ij days after receiving a certification filed under paragraph 7#a71 the ,commission has not requested additional evidence with respect to the certification from the applicable issuer1 the disclosure obligations that are the subject of the certification shall terminate4 4 #cjc4 ,guidance relating to satisfactory control location ,not later than #ahj days after the date of the enactment of this ,act1 the ,securities and ,exchange ,commission 7referred to in this title as the ,commission7 shall issue guidance relating to section #bdj4ae;c#c-c of title #ag1 ,code of ,federal ,regulations1 or any successor regulation1 providing that the requirement to designate a satisfactory control location for a digital asset that is1 or may represent ownership of1 a security may be satisfied by protecting the digital asset through commercially reasonable cybersecurity practices to maintain control of sufficient private key material to transfer control of the digital asset to another person1 or to cause another person to obtain control of the digital asset1 including by means of a smart contract that generates private key material without the involvement of a natural person4 #cjd4 ,custody and customer protection rules 7a7 ,in general 7#a7 ,modernization of existing rules and adoption of new rules ,not later than #ah months after the date of enactment of this ,act1 the ,commission shall-- 7,a7 complete the multi-year study of the ,commission with respect to the modernization of the rules of the ,commission relating to customer protection 7section #bdj4ae;c#c-c of title #ag1 ,code of ,federal ,regulations7 and custody of securities1 digital assets1 and client funds 7section #bge4bjf7d7-b of title #ag1 ,code of ,federal ,regulations72 and 7,b7 consistent with the results of the study described in subparagraph 7,a71 adopt final rules relating to the issues described in paragraph 7#b74 7#b7 ,contents ,the final rules adopted under paragraph 7#a77;,b7 shall address the following concepts3 7,a7 ,investor protection and education with respect to digital assets4 7,b7 ,digital assets1 distributed ledger technology1 and use of collaborative custody or multi-signature arrangements1 including distribution of private key material and resulting obligations4 7,c7 ,changes in market structure and asset characteristics1 including disuse of physical securities and assets and appropriate custodial methods for electronically native assets4 7,d7 ,reduction of regulatory burden4 7,e7 ,use of technology to facilitate regulatory compliance and risk management4 7,f7 ,parity of ,state- and nationally chartered banks1 as defined in section #bjb7;a7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a771 with respect to asset custody in a manner consistent with that ,act 7#ae ,u4,s4,c4 #hj;b-#a et seq47 and other existing law4 7,g7 ,standards under which an issuer of an unregistered digital asset that is1 or may represent ownership of1 a security is not required to utilize a registered transfer agent4 7,h7 ,specification of the digital assets which constitute client funds under section #bge4bjf7d7-b of title #ag1 ,code of ,federal ,regulations4 7b7 ,digital assets and securities ,not later than #bgj days after the date of enactment of this ,act1 the ,commission shall adopt final guidance permitting1 for the purposes of section #bdj4ae;c#c-c7;b7 of title #ag1 ,code of ,federal ,regulations1 a broker or a dealer to perform1 within the same legal entity1 both trading and custodial activities relating to fully paid and excess margin digital assets1 including virtual currency and digital assets that are securities or may represent ownership of securities1 in addition to traditional securities1 client funds1 and other assets permitted by the ,commission to be within the control of a broker or dealer4 ,,iv ,responsible ,commodities ,innovation #dja4 ,definitions ,section #a;a of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a;a7 is amended-- 7#a7 in paragraph 7#i71 by striking and frozen concentrated orange juice and inserting frozen concentrated orange juice1 and a digital asset 7consistent with section #b7;c77#b77;,f772 7#b7 by inserting after paragraph 7#ae7 the following3 7#ae;,a7 ,digital asset 7,a7 ,in general ,except as provided in subparagraph 7,b71 the term digital asset has the meaning given the term in section #ihja of title #ca1 ,united ,states ,code4 7,b7 ,exclusion ,the term digital asset does not include an asset that provides the holder of the asset with any of the following rights in a business entity3 7i7 ,a debt or equity interest in that entity4 7ii7 ,liquidation rights with respect to that entity4 7iii7 ,an entitlement to an interest or dividend payment from that entity4 7iv7 ,a profit or revenue share in that entity derived solely from the entrepreneurial or managerial efforts of others4 7v7 ,any other financial interest in that entity4 7#ae;,b7 ,digital asset exchange ,the term digital asset exchange means a trading facility that lists for trading at least #a digital asset4 2 7#c7 in paragraph 7#bh77;,a77i7-- 7,a7 in subclause 7,i7-- 7i7 in item 7aa7-- 7,i7 in subitem 7,,ee71 by striking or at the end2 and 7,,ii7 by adding at the end the following3 7,,gg7 the purchase or sale of a digital asset that is traded on or subject to the rules of a registered entity2 2 7ii7 in item 7bb71 by striking and and inserting or2 and 7iii7 by adding at the end the following3 7cc7 acting as a counterparty to any cash or spot agreement1 contract1 or transaction involving a digital asset with a person who is not an eligible contract participant1 unless the activity is-- 7,,aa7 conducted in compliance with the laws of the ,state in which the activity occurs2 7,,bb7 subject to regulation by another ,federal authority2 or 7,,cc7 separately regulated under this ,act2 and 2 and 7,b7 in subclause 7,,ii71 by striking items 7aa7 or 7bb7 and inserting item 7aa71 7bb71 or 7cc72 7#d7 by inserting after paragraph 7#ci7 the following3 7#ci;,a7 ,registered digital asset exchange ,the term registered digital asset exchange means a digital asset exchange registered under section #e;i4 2 and 7#e7 in paragraph 7#dj7-- 7,a7 in subparagraph 7,e71 by striking and at the end2 7,b7 by redesignating subparagraph 7,f7 as subparagraph 7,g72 and 7,c7 by inserting after subparagraph 7,e7 the following3 7,f7 a registered digital asset exchange2 and 4 #djb4 ,reporting and recordkeeping ,section #d;g of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #f;g7 is amended-- 7#a7 in subsection 7a71 by inserting digital assets or before commodities2 and 7#b7 in subsection 7d71 in the second sentence1 by striking commodity futures4 and inserting commodities44 #djc4 ,,cftc jurisdiction over digital asset transactions 7a7 ,commission jurisdiction over retail digital asset transactions 7#a7 ,in general ,section #b7;c77#b7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #b7;c77#b77 is amended-- 7,a7 in subparagraph 7,d77ii7-- 7i7 in subclause 7,,iii71 in the matter preceding item 7aa71 by inserting of a commodity1 other than a digital asset1 before that2 7ii7 by redesignating subclauses 7,,iv7 and 7,v7 as subclauses 7,v7 and 7,,vi71 respectively2 and 7iii7 by inserting after subclause 7,,iii7 the following3 7,,iv7 a contract of sale of a digital asset that-- 7aa7 results in actual delivery within #b days or such other period as the ,commission may determine by rule based upon the typical commercial practice in cash or spot markets for the digital asset involved2 or 7bb7 is executed on or subject to the rules of a registered digital asset exchange or with a registered futures commission merchant2 2 and 7,b7 by adding at the end the following3 7,f7 ,commission jurisdiction over digital asset transactions 7i7 ,in general 7,i7 ,jurisdiction ,subject to sections #f;d and #ab7;e7 and section #djc of the ,commodity ,futures ,modernization ,act of #bjjj 7#g ,u4,s4,c4 #bg;a71 the ,commission shall have exclusive jurisdiction over any agreement1 contract1 or transaction involving a contract of sale of a digital asset in interstate commerce1 including ancillary assets 7consistent with section #da7;b77#d7 of the ,securities ,exchange ,act of #aicd71 except that specified periodic reporting requirements made by an issuer which provided the holder of the security with an ancillary asset under that section1 and the security that constitutes an investment contract 7within the meaning of section #b7;a77#a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#a7771 shall remain within the jurisdiction of the ,securities and ,exchange ,commission4 7,,ii7 ,fungibility requirement ,the ,commission shall only exercise jurisdiction over an agreement1 contract1 or transaction involving a contract of sale of a digital asset that is fungible1 which shall not include digital collectibles and other unique digital assets4 7ii7 ,withholding of rulemaking authority over certain transactions ,notwithstanding clause 7i71 this subparagraph shall not be interpreted to permit the ,commission to issue any rule regarding any agreement1 contract1 or transaction that is not offered1 solicited1 traded1 facilitated1 executed1 cleared1 reported1 or otherwise dealt in-- 7,i7 on or subject to the rules of a registered entity2 or 7,,ii7 by any other entity registered by the ,commission4 7iii7 ,limitation ,clause 7i7 shall not apply to custodial activities with respect to a digital asset of an entity supervised or regulated by a ,state or other ,federal regulatory agency4 4 7#b7 ,conforming amendment ,section #b7;a77#a77;,a7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #b7;a77#a77;,a77 is amended1 in the first sentence1 by striking section #ai of this ,act and inserting subsection 7c77#b77;,f7 or section #ai4 7b7 ,segregation of digital assets ,section #d;d of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #f;d7 is amended by adding at the end the following3 7i7 ,segregation of digital assets 7#a7 ,holding of customer assets 7,a7 ,in general ,each futures commission merchant shall hold customer money1 assets1 and property in a manner to minimize the customer's risk of loss of1 or unreasonable delay in the access to1 the money1 assets1 and property4 7,b7 ,custodian ,a futures commission merchant shall hold the property of a customer of the futures commission merchant with a licensed1 chartered1 or registered entity subject to regulation by #a of the following agencies3 7i7 ,the ,commission4 7ii7 ,the ,securities and ,exchange ,commission4 7iii7 ,an appropriate ,federal banking agency 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac774 7iv7 ,a ,state bank supervisor 7as defined in that section74 7v7 ,an appropriate foreign governmental authority in the home country of the custodian4 7#b7 ,segregation of funds 7,a7 ,definition of digital asset customer ,in this paragraph1 the term digital asset customer means a customer involved in a cash or spot1 leveraged1 margined1 or financed digital asset transaction in which the futures commission merchant is acting as the counterparty4 7,b7 ,requirements 7i7 ,in general ,a futures commission merchant shall treat and deal with all money1 assets1 and property of any digital asset customer received as belonging to the customer4 7ii7 ,commingling prohibited ,money1 assets1 and property of a digital asset customer described in clause 7i7-- 7,i7 shall be separately accounted for2 and 7,,ii7 shall not be-- 7aa7 commingled with the funds of the futures commission merchant2 or 7bb7 used to margin1 secure1 or guarantee any trades or accounts of any customer or person other than the person for whom the money1 assets1 or property are held4 7,c7 ,exceptions 7i7 ,use of funds 7,i7 ,in general ,notwithstanding subparagraph 7,b71 money1 assets1 and property of a digital asset customer may1 for convenience1 be commingled and deposited in the same account or accounts with an entity described in paragraph 7#a77;,b74 7,,ii7 ,withdrawal ,notwithstanding subparagraph 7,b71 the share of the money1 assets1 and property described in subclause 7,i7 as in the normal course of business is necessary to margin1 guarantee1 secure1 transfer1 adjust1 or settle a digital asset transaction with a registered entity may be withdrawn and applied to those purposes1 including the payment of commissions1 brokerage1 interest1 taxes1 storage1 and other charges1 lawfully accruing in connection with the digital asset transaction4 7ii7 ,commission action ,notwithstanding subparagraph 7,b71 in accordance with such terms and conditions as the ,commission may prescribe by rule or order1 any money1 assets1 or property of a digital asset customer may be commingled and deposited in customer accounts with any other money1 assets1 or property received by the futures commission merchant and required by the ,commission to be separately accounted for and treated and dealt with as belonging to the digital asset customer4 7,d7 ,permitted investments ,money of a digital asset customer may be invested-- 7i7 in-- 7,i7 obligations of the ,united ,states2 7,,ii7 general obligations of any ,state or of any political subdivision of a ,state2 7,,iii7 obligations fully guaranteed as to principal and interest by the ,united ,states2 or 7,,iv7 any other investment that the ,commission may by rule prescribe2 and 7ii7 in accordance with such rules and subject to such conditions as the ,commission may prescribe4 7,e7 ,prohibition ,it shall be unlawful for any person1 including any derivatives clearing organization or depository institution1 that has received any money1 assets1 or property for deposit in a separate account or accounts as required by subparagraph 7,b7 to hold1 dispose of1 or use any of the money1 assets1 or property that belongs to the depositing futures commission merchant or any person other than the digital asset customer of the futures commission merchant4 7#c7 ,customer right to opt out 7,a7 ,in general ,a customer shall have the right to waive any requirement under this subsection by affirmatively electing1 in writing to the futures commission merchant1 to waive the requirement4 7,b7 ,limitations ,the ,commission may1 by rule1 establish notice and disclosure requirements1 segregation requirements1 investment limitations1 and other rules relating to the waiving of any requirement under this subsection that are reasonably necessary to protect customers1 including eligible contract participants1 non-eligible contract participants1 and any other class of customers4 4 7c7 ,limitation on futures commission merchants acting as a counterparty in digital asset transactions ,section #d;d of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #f;d7 7as amended by subsection 7b77 is amended by adding at the end the following3 7j7 ,limitation on futures commission merchants acting as a counterparty in digital asset transactions ,a registered futures commission merchant shall not act as a counterparty in any agreement1 contract1 or transaction involving a digital asset that has not been listed for trading on a registered digital asset exchange4 4 7d7 ,common provisions applicable to registered entities ,section #e;c of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #g;a-#b7 is amended-- 7#a7 in subsection 7a77#a71 by striking #e7;d7 and #e;b7c77#b7 and inserting #e7;d71 #e;b7c77#b71 and #e;i7c72 7#b7 in subsection 7b71 by inserting registered digital asset exchange1 before derivatives each place it appears2 and 7#c7 in subsection 7c7-- 7,a7 in paragraph 7#b71 by inserting or participants before 7in a2 7,b7 in paragraph 7#d77;,b71 by striking #a;a7#aj7 and inserting #a;a7#i72 and 7,c7 in paragraph 7#e71 by adding at the end the following3 7,d7 ,special rules for the listing of certain digital assets 7i7 ,in general ,in the case of listing for trading a digital asset that has not previously been listed for trading on another registered entity-- 7,i7 paragraphs 7#b7 and 7#c7 shall apply as if the listing were a rule2 and 7,,ii7 paragraph 7#b7 shall be applied by substituting #bj business days for #aj business days4 7ii7 ,transitional extension ,during the #a-year period beginning on the date of the registration of the first digital asset exchange1 the ,commission shall have an additional #bj business days to review any certification under clause 7i74 7iii7 ,consideration of comments ,in conducting a review under clause 7i71 the ,commission shall consider any comments provided by the ,securities and ,exchange ,commission with respect to the legal classification of a digital asset4 4 #djd4 ,registration of digital asset exchanges 7a7 ,in general ,the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a et seq47 is amended by inserting after section #e;h the following3 #e;i4 ,registration of digital asset exchanges 7a7 ,definition of customer ,in this section1 the term customer means any person that maintains an account for the trading of digital assets directly with a registered digital asset exchange 7other than a person that is owned or controlled1 directly or indirectly1 by the registered digital asset exchange7 on behalf of the person or any other person4 7b7 ,registration 7#a7 ,in general ,any trading facility that offers or seeks to offer a market in digital assets may register with the ,commission as a digital asset exchange by submitting to the ,commission an application in such form and containing such information as the ,commission may require for the purpose of making the determinations required for approval under subsections 7d7 and 7f74 7#b7 ,deemed registration ,a registered designated contract market or registered swap execution facility that fulfills the requirements of this section may elect to be considered a registered digital asset exchange1 in such form and manner as the ,commission shall prescribe4 7#c7 ,additional registration ,a registered digital asset exchange shall be registered with the ,secretary of the ,treasury as a money services business4 7c7 ,trading 7#a7 ,in general ,a registered digital asset exchange may make available for trading any digital asset that is not readily susceptible to manipulation1 subject to this subsection4 7#b7 ,rules governing margined or leveraged trading ,the ,commission may make1 promulgate1 and enforce such additional rules governing margined1 leveraged1 or financed transactions as are reasonably necessary to protect market participants and promote the orderly settlement of transactions with respect to-- 7,a7 disclosure2 7,b7 recordkeeping2 7,c7 capital1 margin1 and other financial resources2 7,d7 reporting2 7,e7 business conduct2 7,f7 documentation2 and 7,g7 such other matters as the ,commission determines to be necessary4 7#c7 ,prohibition on trading derivatives products ,registration as a digital asset exchange shall not permit a trading facility to offer any contract of sale of a commodity for future delivery1 option1 or swap for trading without also being registered as a designated contract market or swap execution facility4 7d7 ,core principles for digital asset exchanges 7#a7 ,compliance with core principles 7,a7 ,in general ,to be registered1 and maintain registration1 as a digital asset exchange1 the registered digital asset exchange shall comply with-- 7i7 the core principles described in this subsection2 and 7ii7 any requirement that the ,commission may impose by rule pursuant to section #h;a7#e74 7,b7 ,reasonable discretion of digital asset exchange ,unless otherwise determined by the ,commission by rule1 a registered digital asset exchange described in subparagraph 7,a7 shall have reasonable discretion in establishing the manner in which the registered digital asset exchange complies with the core principles described in this subsection4 7#b7 ,compliance with rules ,a registered digital asset exchange shall-- 7,a7 establish and enforce compliance with #a or more rules of the registered digital asset exchange1 including-- 7i7 the terms and conditions of the trades traded or processed on or through the registered digital asset exchange2 and 7ii7 any limitation on access to the registered digital asset exchange2 7,b7 establish and enforce compliance with trading1 trade processing1 and participation rules that will deter abuses and have the capacity to detect1 investigate1 and enforce violations of those rules1 including means-- 7i7 to provide market participants with impartial access to the market2 and 7ii7 to capture information that may be used in establishing whether rule violations have occurred2 and 7,c7 establish rules governing the operation of the registered digital asset exchange1 including rules specifying trading procedures to be used in entering and executing orders traded or posted on the registered digital asset exchange4 7#c7 ,digital assets not readily susceptible to manipulation 7,a7 ,in general ,a registered digital asset exchange shall permit trading only in assets that are not readily susceptible to manipulation4 7,b7 ,listing restrictions ,a registered digital asset exchange shall not permit trading in a digital asset if it is reasonably likely that-- 7i7 the transaction history of the digital asset can be fraudulently altered by any person or group of persons acting collectively2 or 7ii7 the functionality or operation of the digital asset can be materially altered by any person or group of persons under common control4 7,c7 ,considerations ,in assessing a digital asset under this paragraph1 a registered digital asset exchange shall consider-- 7i7 the purpose and use of the digital asset2 7ii7 the creation or release process of the digital asset2 7iii7 the consensus mechanism of the digital asset2 7iv7 the governance structure of the digital asset2 7v7 the participation and distribution of the digital asset2 7vi7 the current and proposed functionality of the digital asset2 7vii7 the legal classification of the digital asset2 and 7viii7 any other factor required by the ,commission4 7#d7 ,treatment of customer assets 7,a7 ,required standards and procedures ,a registered digital asset exchange shall establish standards and procedures that are designed to protect and ensure the safety of customer money1 assets1 and property4 7,b7 ,holding of customer assets 7i7 ,in general ,a registered digital asset exchange shall hold customer money1 assets1 and property in a manner to minimize the customer's risk of loss of1 or unreasonable delay in the access to1 the money1 assets1 and property4 7ii7 ,segregation of funds 7,i7 ,in general ,a registered digital asset exchange shall treat and deal with all money1 assets1 and property of any customer received as belonging to the customer4 7,,ii7 ,commingling prohibited ,money1 assets1 and property of a customer described in subclause 7,i7-- 7aa7 shall be separately accounted for2 and 7bb7 shall not be-- 7,,aa7 commingled with the funds of the registered digital asset exchange2 or 7,,bb7 used to margin1 secure1 or guarantee any trades or accounts of any customer or person other than the person for whom the money1 assets1 or property are held4 7iii7 ,exceptions 7,i7 ,use of funds 7aa7 ,in general ,notwithstanding clause 7ii71 money1 assets1 and property of customers of a registered digital asset exchange may1 for convenience1 be commingled and deposited with an entity described in section #d;d7i77#a77;,b74 7bb7 ,withdrawal ,notwithstanding clause 7ii71 the share of the money1 assets1 and property described in item 7aa7 as in the normal course of business is necessary to margin1 guarantee1 secure1 transfer1 adjust1 or settle a digital asset transaction with a registered entity may be withdrawn and applied to those purposes1 including the payment of commissions1 brokerage1 interest1 taxes1 storage1 and other charges1 lawfully accruing in connection with the digital asset transaction4 7,,ii7 ,commission action ,notwithstanding clause 7ii71 in accordance with such terms and conditions as the ,commission may prescribe by rule or order1 any money1 assets1 or property of the customers of a registered digital asset exchange may be commingled and deposited in customer accounts with any other money1 assets1 or property received by the registered digital asset exchange and required by the ,commission to be separately accounted for and treated and dealt with as belonging to the customer of the registered digital asset exchange4 7,c7 ,permitted investments ,money described in subparagraph 7,b77ii77,i7 may be invested-- 7i7 in-- 7,i7 obligations of the ,united ,states2 7,,ii7 general obligations of any ,state or of any political subdivision of a ,state2 7,,iii7 obligations fully guaranteed as to principal and interest by the ,united ,states2 or 7,,iv7 any other investment that the ,commission may by rule prescribe2 and 7ii7 in accordance with such rules and subject to such conditions as the ,commission may prescribe4 7,d7 ,misuse of customer property ,it shall be unlawful-- 7i7 for any registered digital asset exchange that has received any customer money1 assets1 or property for custody to dispose of1 or use any of the money1 assets1 or property as belonging to the registered digital asset exchange2 or 7ii7 for any other person1 including any other registered digital asset exchange or custodian that has received any customer money1 assets1 or property for deposit1 to hold1 dispose of1 or use any of the money1 assets1 or property as belonging to-- 7,i7 the registered digital asset exchange that deposited the money1 assets1 or property2 or 7,,ii7 any person other than the customers of the registered digital asset exchange4 7,e7 ,customer right to opt out 7i7 ,in general ,a customer shall have the right to waive any requirement under subparagraph 7,b7 by affirmatively electing1 in writing to the registered digital asset exchange1 to waive the requirement4 7ii7 ,limitations ,the ,commission may1 by rule1 establish notice and disclosure requirements1 segregation requirements1 investment limitations1 and other rules relating to the waiving of any requirement under this paragraph that is reasonably necessary to protect customers1 including eligible contract participants1 non-eligible contract participants1 or any other class of customers4 7#e7 ,monitoring of trading and trade processing 7,a7 ,in general ,a registered digital asset exchange shall provide a competitive1 open1 and efficient market and mechanism for executing transactions that protects the price discovery process of trading on the registered digital asset exchange4 7,b7 ,protection of markets and market participants ,a registered digital asset exchange shall establish and enforce compliance with rules-- 7i7 to protect markets and market participants from abusive practices committed by any party1 including abusive practices committed by a party acting as an agent for a participant2 and 7ii7 to promote fair and equitable trading on the registered digital asset exchange4 7,c7 ,procedures and monitoring ,a registered digital asset exchange shall-- 7i7 establish and enforce compliance with rules or terms and conditions defining1 or specifications detailing-- 7,i7 trading procedures to be used in entering and executing orders traded on or through the facilities of the registered digital asset exchange2 and 7,,ii7 procedures for trade processing of digital assets on or through the facilities of the registered digital asset exchange2 and 7ii7 monitor trading in digital assets to prevent manipulation1 price distortion1 and disruptions of the delivery or cash settlement process through surveillance1 and compliance1 including methods for conducting real-time monitoring of trading and comprehensive and accurate trade reconstructions4 7#f7 ,ability to obtain information ,a registered digital asset exchange shall-- 7,a7 establish and enforce rules that will allow the registered digital asset exchange to obtain any necessary information to perform any of the functions described in this section2 7,b7 provide the information to the ,commission on request2 and 7,c7 have the capacity to carry out such international information-sharing agreements as the ,commission may require4 7#g7 ,emergency authority ,a registered digital asset exchange shall adopt rules to provide for the exercise of emergency authority1 in consultation or cooperation with the ,commission or a registered entity1 as is necessary and appropriate1 including the authority to facilitate the liquidation or transfer of open positions in any digital asset or to suspend or curtail trading in a digital asset4 7#h7 ,reporting requirements 7,a7 ,in general ,a registered digital asset exchange shall provide to the ,commission information that is determined by the ,commission to be necessary to perform any responsibility of the ,commission under this ,act4 7,b7 ,timely publication of trading information 7i7 ,in general 7,i7 ,publication ,a registered digital asset exchange shall make public timely information on price1 trading volume1 and other trading data on digital assets to the extent prescribed by the ,commission4 7,,ii7 ,accessibility ,a registered digital asset exchange may make trading data freely accessible to the public under rules established by the ,commission4 7ii7 ,capacity of digital asset exchange ,a registered digital asset exchange shall be required to have the capacity to electronically capture and transmit trade information with respect to transactions executed on the registered digital asset exchange4 7#i7 ,recordkeeping and reporting 7,a7 ,in general ,a registered digital asset exchange shall-- 7i7 maintain records of all activities relating to the business of the registered digital asset exchange1 including a complete audit trail1 in a form and manner acceptable to the ,commission for a period of #e years2 7ii7 report to the ,commission1 in a form and manner acceptable to the ,commission1 such information as the ,commission determines to be necessary or appropriate for the ,commission to perform the duties of the ,commission under this ,act2 and 7iii7 keep any records relating to ancillary assets open to inspection and examination by the ,securities and ,exchange ,commission4 7,b7 ,information-sharing ,subject to section #h1 and on request1 the ,commission shall share information collected under subparagraph 7,a7 with-- 7i7 a self-regulatory organization2 7ii7 the ,securities and ,exchange ,commission2 7iii7 an appropriate ,federal banking agency 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac772 7iv7 a ,state bank supervisor 7as defined in that section72 7v7 a ,state securities or commodities regulator2 7vi7 the ,financial ,stability ,oversight ,council2 7vii7 the ,department of ,justice2 and 7viii7 any other person that the ,commission determines to be appropriate1 including-- 7,i7 foreign financial supervisors 7including foreign futures authorities72 7,,ii7 foreign central banks2 and 7,,iii7 foreign ministries4 7,c7 ,confidentiality agreement ,before the ,commission may share information with any entity described in subparagraph 7,b71 the ,commission shall receive a written agreement from each entity stating that the entity shall abide by the confidentiality requirements described in section #h relating to the information on digital asset transactions that is provided4 7,d7 ,providing information ,each registered digital asset exchange shall provide to the ,commission 7including any designee of the ,commission7 information under subparagraph 7,a7 in such form and at such frequency as is required by the ,commission4 7#aj7 ,antitrust considerations ,unless necessary or appropriate to achieve the purposes of this ,act1 a registered digital asset exchange shall not-- 7,a7 adopt any rules or take any actions that result in any unreasonable restraint of trade2 or 7,b7 impose any material anticompetitive burden on trading4 7#aa7 ,conflicts of interest ,a registered digital asset exchange shall-- 7,a7 establish and enforce rules to minimize conflicts of interest in the decision-making process of the registered digital asset exchange2 and 7,b7 establish a process for resolving conflicts of interest described in subparagraph 7,a74 7#ab7 ,financial resources 7,a7 ,in general ,a registered digital asset exchange shall have adequate financial1 operational1 and managerial resources1 as determined by the ,commission1 to discharge each responsibility of the registered digital asset exchange4 7,b7 ,minimum amount of financial resources ,a registered digital asset exchange shall possess financial resources that1 at a minimum1 exceed the total amount that would enable the registered digital asset exchange to conduct an orderly wind-down of the activities of the registered digital asset exchange4 7,c7 ,additional financial resources for leverage trading ,the ,commission may require such additional financial resources as are necessary to enable a registered digital asset exchange that offers margined1 leveraged1 or financed transactions to fulfill the customer obligations of the registered digital asset exchange4 7#ac7 ,governance fitness standards 7,a7 ,governance arrangements ,a registered digital asset exchange shall establish governance arrangements that are transparent to fulfill public interest requirements4 7,b7 ,fitness standards ,a registered digital asset exchange shall establish and enforce appropriate fitness standards for-- 7i7 directors2 7ii7 any individual or entity with direct access to the settlement activities of the registered digital asset exchange2 7iii7 any individual or entity with direct access to any custodian affiliated with the registered digital asset exchange2 7iv7 any entity offering affiliated services for the registered digital asset exchange2 and 7v7 any party affiliated with any individual or entity described in clauses 7i7 through 7iv74 7#ad7 ,system safeguards ,a registered digital asset exchange shall-- 7,a7 establish and maintain a program of risk analysis and oversight to identify and minimize sources of operational and security risks1 through the development of appropriate controls and procedures and automated systems that-- 7i7 are reliable and secure2 and 7ii7 have adequate scalable capacity2 7,b7 establish and maintain emergency procedures1 backup facilities1 and a plan for disaster recovery that allow for-- 7i7 the timely recovery and resumption of operations2 and 7ii7 the fulfillment of the responsibilities and obligations of the registered digital asset exchange2 and 7,c7 periodically conduct tests to verify that the backup resources of the registered digital asset exchange are sufficient to ensure continued-- 7i7 order processing and trade matching2 7ii7 price reporting2 7iii7 market surveillance2 and 7iv7 maintenance of a comprehensive and accurate audit trail4 7e7 ,appointment of trustee 7#a7 ,in general ,if a proceeding under section #e;e results in the suspension or revocation of the registration of a digital asset exchange1 or if a digital asset exchange withdraws from registration1 the ,commission1 after providing notice to the digital asset exchange1 may apply to the district court of the ,united ,states for the judicial district in which the digital asset exchange is located for the appointment of a trustee4 7#b7 ,assumption of jurisdiction ,if the ,commission applies to a court for appointment of a trustee under paragraph 7#a7-- 7,a7 the court may take exclusive jurisdiction over-- 7i7 the digital asset exchange2 and 7ii7 the records and assets of the digital asset exchange1 wherever those records and assets are located2 and 7,b7 if the court takes jurisdiction under subparagraph 7,a71 the court shall appoint the ,commission1 or a person designated by the ,commission1 as trustee with power to take possession and continue to operate or terminate the operations of the digital asset exchange in an orderly manner for the protection of customers1 subject to such terms and conditions as the court may prescribe4 7f7 ,custodian ,a registered digital asset exchange shall deposit with an entity described in section #d;d7i77#a77;,b7 each digital asset that is-- 7#a7 the property of a customer of the registered digital asset exchange2 7#b7 required to be held by the registered digital asset exchange under subsection 7c77#b7 or 7d77#ab72 or 7#c7 otherwise required by the ,commission to be so held to reasonably protect customers or promote the public interest4 7g7 ,exemptions 7#a7 ,in general ,to promote responsible economic or financial innovation and fair competition1 or protect customers1 the ,commission may exempt1 either unconditionally or on stated terms or conditions or for stated periods1 and retroactively1 prospectively1 or both1 a registered digital asset exchange from the requirements of this section1 if the ,commission determines that-- 7,a7 the exemption-- 7i7 will be consistent with the public interest and the purposes of this ,act2 and 7ii7 will not have a material adverse effect on the ability of the ,commission or the registered digital asset exchange to discharge duties under this ,act2 or 7,b7 the registered digital asset exchange is subject to comparable1 comprehensive regulation by the appropriate government authorities in the home country of the registered digital asset exchange4 7#b7 ,process ,the ,commission may grant an exemption under paragraph 7#a7-- 7,a7 on the initiative of the ,commission2 or 7,b7 after receiving an application for the exemption by the registered digital asset exchange4 7h7 ,jurisdiction ,notwithstanding any other provision of law1 the ,commission shall have exclusive jurisdiction over the regulation and all other activities of a registered digital asset exchange4 7i7 ,implementation ,the ,commission may prescribe rules to implement this section4 4 7b7 ,certain digital asset exchange functions not sufficient ,to trigger requirement ,to register as futures commission merchant ,section #d;f7c7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #f;f7c77 is amended by adding at the end the following3 7#ab7 ,clarification of scope of registration requirement ,a registered digital asset exchange shall not be required to register as a futures commission merchant for any activity for which the registered digital asset exchange is regulated under section #e;i4 4 #dje4 ,violations ,section #i of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #ac7 is amended-- 7#a7 in subsection 7a77#b71 by striking subsection #d;c and inserting section #d;c2 and 7#b7 in subsection 7e7-- 7,a7 in paragraph 7#a71 by inserting contracts for the sale of digital assets1 after options thereon12 and 7,b7 in paragraph 7#b71 by inserting or contracts for the sale of digital assets after options thereon4 #djf4 ,market reports ,section #af7;a7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #bj7;a77 is amended-- 7#a7 in the first sentence1 by striking which are the subject of futures contracts1 and inserting under the jurisdiction of the ,commission12 and 7#b7 in the second sentence1 by striking futures markets4 and inserting markets under the jurisdiction of the ,commission44 #djg4 ,bankruptcy treatment of digital assets 7a7 ,in general ,section #bj7;a7 of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #bd7;a77 is amended in paragraphs 7#a7 and 7#b7 by inserting digital assets1 after securities1 each place it appears4 7b7 ,commodity broker definition ,section #aja7f7 of title #aa1 ,united ,states ,code1 is amended by inserting registered digital asset exchange1 as defined in section #a;a of the ,commodity ,exchange ,act1 before foreign4 7c7 ,commodities contracts ,section #eef of title #aa1 ,united ,states ,code1 is amended by inserting a registered digital asset exchange1 as defined in section #a;a of the ,commodity ,exchange ,act1 before a contract4 7d7 ,contractual rights ,section #efa of title #aa1 ,united ,states ,code1 is amended by inserting registered digital asset exchange1 as defined in section #a;a of the ,commodity ,exchange ,act1 after designated under the ,commodity ,exchange ,act each place it appears4 7e7 ,definitions ,section #gfa of title #aa1 ,united ,states ,code1 is amended-- 7#a7 in paragraph 7#d7-- 7,a7 in subparagraph 7,a71 by inserting digital asset or a before commodity2 7,b7 in subparagraph 7,i71 by striking or at the end2 7,c7 in subparagraph 7,j71 by adding or at the end2 and 7,d7 by adding at the end the following3 7,k7 a contract for the sale of a digital asset by a registered digital asset exchange2 2 and 7#b7 in paragraph 7#aj7-- 7,a7 in the matter preceding subparagraph 7,a7-- 7i7 by inserting a digital asset1 after a security12 and 7ii7 by inserting digital asset1 after cash1 security12 7,b7 in subparagraph 7,a7-- 7i7 in clause 7vi71 by inserting a digital asset1 after a security12 and 7ii7 in clause 7vii7-- 7,i7 by inserting or a digital asset before held as property2 7,,ii7 by inserting or digital asset after such security2 and 7,,iii7 by inserting or digital asset after based on a security2 and 7,c7 in subparagraph 7,b7-- 7i7 by striking not including property and inserting 8not including-- 7i7 property 2 7ii7 in clause 7i71 as so designated1 by adding and at the end2 and 7iii7 by adding at the end the following3 7ii7 money1 assets1 or property with respect to which any requirement under subsection 7i7 of section #d;d of the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #f;d7 is waived pursuant to paragraph 7#c7 of that subsection1 or any requirement under subparagraph 7,b7 of paragraph 7#d7 of section #e;i7d7 of that ,act is waived pursuant to subparagraph 7,e7 of that paragraph2 4 7f7 ,voidable transfers ,section #gfd7;b77#a7 of title #aa1 ,united ,states ,code1 is amended by inserting 1 digital assets before 1 or other property4 7g7 ,treatment of customer property ,section #gff of title #aa1 ,united ,states ,code1 is amended-- 7#a7 in subsection 7b77#a71 by striking physical commodity underlying and inserting commodity underlying2 7#b7 in subsection 7c71 by inserting digital asset1 before or commodity contract each place the term appears2 7#c7 in subsection 7d71 by inserting digital asset1 before or commodity contract each place the term appears2 7#d7 in subsection 7f7-- 7,a7 in striking and other property and inserting digital assets1 and other property2 and 7,b7 by striking or property and inserting 1 digital assets1 or property2 7#e7 in subsection 7g71 by striking security or property and inserting security1 digital asset1 or property2 and 7#f7 in subsection 7h77#b71 by inserting digital assets1 after customer securities14 #djh4 ,identified banking products ,section #bjf7;a7 of the ,gramm-,leach-,bliley ,act 7#ae ,u4,s4,c4 #gh;c note7 is amended-- 7#a7 in paragraph 7#e77;,b77ii71 by striking or at the end2 7#b7 in paragraph 7#f71 by striking the period at the end and inserting 2 or2 and 7#c7 by adding at the end the following3 7#g7 a payment stablecoin issued by a depository institution under section #gbb;,a4 4 #dji4 ,financial institutions definition ,section #ecab7;c77#a7 of title #ca1 ,united ,states ,code1 is amended by adding at the end the following3 7,b7 ,a registered digital asset exchange1 as defined in section #a;a of the ,commodity ,exchange ,act4 4 #daj4 ,offsetting the costs of digital asset regulation ,the ,commodity ,exchange ,act 7#g ,u4,s4,c4 #a et seq47 is amended by adding at the end the following3 #bd4 ,offsetting the costs of digital asset regulation 7a7 ,recovery of certain costs of annual appropriation 7#a7 ,in general ,effective beginning ,october #a1 #bjbc1 the ,commission may1 by rule1 collect fees-- 7,a7 to fund expenses relating to regulation of digital asset cash and spot markets2 and 7,b7 that are designed to recover the costs to the ,federal ,government of the annual appropriation to the ,commission by ,congress4 7#b7 ,registered entities ,fees under paragraph 7#a7 shall only be imposed-- 7,a7 on registered entities engaged in cash or spot digital asset activities2 and 7,b7 in relation to the regulation of those activities under this ,act4 7#c7 ,fee rates ,fees under paragraph 7#a7 shall-- 7,a7 be strictly related to the cost to the ,commission of the regulation of digital asset cash and spot markets2 7,b7 be reduced for newly registered entities with less than #ajj1jjj1jjj in daily trading volume2 and 7,c7 7i7 minimize negative impacts on market liquidity2 and 7ii7 maintain the efficiency1 competitiveness1 and financial integrity of digital asset markets4 7#d7 ,collection of fees ,the ,commission shall collect fees under this subsection in such manner and within such time as may be specified by the ,commission by rule4 7b7 ,fee rate orders 7#a7 ,in general ,not later than #fj days after the date on which a law providing a regular appropriation to the ,commission for a fiscal year is enacted1 the ,commission shall adopt an order setting rates for fees to be collected under subsection 7a7 for that fiscal year4 7#b7 ,publication ,the ,commission shall publish in the ,federal ,register the order adopted under paragraph 7#a71 including-- 7,a7 projections on which the fees are based2 and 7,b7 an explanation of the method used for calculating applicable fee rates4 7c7 ,deposit of fees 7#a7 ,offsetting collections ,fees collected under subsection 7a7 for any fiscal year-- 7,a7 shall be deposited and credited as offsetting collections to the account providing appropriations to the ,commission2 and 7,b7 shall not be collected or available for obligation for any fiscal year except to the extent provided in advance in appropriation ,acts4 7#b7 ,general revenues prohibited ,no fees collected under subsection 7a7 shall be deposited and credited as general revenue of the ,treasury4 7d7 ,lapse of appropriations ,if a regular appropriation to the ,commission has not been enacted on the first day of a fiscal year1 the ,commission shall continue to collect fees under this section at the rates in effect on ,september #cj of the preceding fiscal year4 7e7 ,limitations 7#a7 ,leveraged1 margined1 or financed transactions ,nothing in this section authorizes the imposition of fees on a registered entity relating to leveraged1 margined1 or financed transactions under this ,act1 including those activities relating to digital assets4 7#b7 ,other appropriations ,notwithstanding any other provision of law1 the ,commission may use appropriations otherwise made available by law to fund expenses relating to the regulation of digital asset cash and spot markets4 7f7 ,ceiling on ,fees ,unless otherwise provided by law1 fees collected under this section shall not exceed #cj1jjj1jjj4 7g7 ,authorization required ,the authority under this section to impose and collect fees shall only be in effect during a period that a legislative authorization of the ,commission is in effect1 as otherwise provided by law4 4 ,v ,responsible consumer protection #eja4 ,responsible consumer protection ,chapter #ih of title #ca1 ,united ,states ,code1 as added by section #aja7;a7 of this ,act1 is amended by adding at the end the following3 #ihjb4 ,consumer protection standards for digital assets 7a7 ,in general ,a person or protocol that provides digital asset services shall ensure that the scope of permissible transactions that may be undertaken with customer digital assets is disclosed clearly in a customer agreement4 7b7 ,notice ,a person who provides digital asset services shall provide clear notice to each customer1 and require acknowledgment1 of the following3 7#a7 ,prior to the implementation of any updates1 material source code version changes relating to digital assets1 except in emergencies1 which may include security vulnerabilities4 7#b7 ,whether customer digital assets are segregated from other customer assets and the manner of segregation4 7#c7 ,how the assets of the customer would be treated in a bankruptcy or insolvency scenario and the risks of loss4 7#d7 ,the time period and manner in which the person is obligated to return the digital asset of the customer upon the request of the customer4 7#e7 ,applicable fees4 7#f7 ,the dispute resolution process of the person4 7c7 ,subsidiary proceeds 7#a7 ,definitions ,in this subsection3 7,a7 ,subsidiary proceeds ,the term subsidiary proceeds includes forks1 airdrops1 staking1 and other gains that accrue to a digital asset through market transactions1 use as a financial asset1 or being held in custody or safekeeping by a person who provides digital asset services4 7,b7 ,terms of service ,the term agreement includes the standard terms of service of the person who provides digital asset services4 7#b7 ,accrual to customer ,except as otherwise specified by an agreement with a customer1 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 7#c74 7#c7 ,election ,a person who provides digital asset services may elect not to collect certain subsidiary proceeds if the election is disclosed in an agreement with the customer4 7#d7 ,withdrawal ,a customer may withdraw digital assets in a method that permits the collection of the subsidiary proceeds4 7#e7 ,agreement ,a person who provides digital asset services shall enter into an agreement with a customer1 if desired by the customer1 regarding the manner in which to invest subsidiary proceeds or other gains attributable to the digital assets of the customer4 7d7 ,lending arrangements ,a person who provides digital asset services shall ensure any lending arrangements relating to digital assets are-- 7#a7 clearly disclosed to customers before any lending services take place2 7#b7 subject to the affirmative consent of the customer2 7#c7 fully enforceable as a matter of commercial law2 7#d7 accompanied by full disclosures of applicable terms and risks1 yield1 and the manner in which the yield is calculated2 7#e7 accompanied by appropriate disclosures relating to collateral requirements and policies1 including-- 7,a7 haircuts and overcollateralization requirements2 7,b7 collateral the person accepts when calling for additional collateral from a customer1 including collateral substitution2 7,c7 whether customer collateral is commingled with the collateral of other customers or of the person2 and 7,d7 how customer collateral is invested1 and whether the yield belongs to the customer or to the person2 7#f7 accompanied by disclosures of mark-to-market and monitoring arrangements1 including-- 7,a7 the frequency of mark-to-market monitoring and how frequently the person will call for additional collateral from a customer2 7,b7 the time period in which the customer must supply additional collateral to the person after a collateral call2 and 7,c7 whether the person permits failures to deliver such collateral1 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 closed2 and 7#g7 compliant with all applicable ,federal and ,state laws4 7e7 ,rehypothecation 7#a7 ,definition ,in this subsection1 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 person4 7#b7 ,rehypothecation ,before rehypothecating a digital asset1 a person who provides digital asset services to a customer shall clearly disclose policies on rehypothecation to customers1 including a clear definition of rehypothecation that is accessible to consumers4 ,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 rehypothecation3 7,a7 ,the liquidity and volatility of a digital asset4 7,b7 ,past failures to deliver a particular digital asset4 7,c7 ,concentration risk4 7,d7 ,whether an issuer or lender of last resort relating to a digital asset exists1 including for virtual currency with a finite supply4 7,e7 ,the capital1 leverage and market position of the person4 7,f7 ,the legal obligations of the person to customers and other persons in the market who provide digital asset services4 4 #ejb4 ,source code version of digital assets ,chapter #ih of title #ca1 ,united ,states ,code1 as amended by section #eja of this ,act1 is amended by adding at the end the following3 #ihjc4 ,source code version of digital assets 7a7 ,in general ,a customer and a person who provides digital asset services shall1 at the initiation of a contractual relationship1 agree in writing regarding the source code version the person will use for each digital asset and the treatment of each asset under the law1 including securities and commodities laws and the ,uniform ,commercial ,code applicable to the transaction4 7b7 ,determination ,a person who provides digital asset services-- 7#a7 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 agreement1 including in circumstances where it is not possible to predict in advance whether utilization of the different source code version will be in the best interests of the customer2 7#b7 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 customers2 7#c7 shall not be required to support digital assets and source code versions that the person has not entered into an agreement with customers to support2 and 7#d7 shall not capriciously redefine a digital asset or the corresponding source code or alter customer agreements with respect to this subsection4 7c7 ,standards ,a person who provides digital asset services-- 7#a7 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 agreement1 which shall include customer notice and approval1 as appropriate based on the circumstances2 and 7#b7 may specify differing standards based on source code changes which occur as the result of emergencies1 including security vulnerabilities4 4 #ejc4 ,settlement finality ,chapter #ih of title #ca1 ,united ,states ,code1 as amended by section #ejb of this ,act1 is amended by adding at the end the following3 #ihjd4 ,settlement finality ,to promote legal certainty and customer protection1 a person who provides digital asset services and a customer shall agree on the terms of settlement finality for all transactions1 including the following3 7#a7 ,the conditions under which a digital asset may be deemed fully transferred1 provided that these legal conditions may diverge from operational conditions under which digital assets are considered transferred1 based on the distributed and probabilistic nature of digital assets4 7#b7 ,the exact moment of transfer of a digital asset4 7#c7 ,the discharge of any obligations upon transfer of a digital asset4 7#d7 ,conformity to applicable provisions of the ,uniform ,commercial ,code4 4 #ejd4 ,notice to customers2 enforcement ,chapter #ih of title #ca1 ,united ,states ,code1 as amended by section #ejc of this ,act1 is amended by adding at the end the following3 #ihje4 ,notice to customers2 enforcement 7a7 ,in general ,in providing disclosures and carrying out other duties under this chapter1 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 customer4 7b7 ,enforcement of standards ,the standards under this chapter shall be enforced in an appropriate manner1 commensurate with other customer protection standards-- 7#a7 in the case of a digital asset intermediary1 by the ,federal or ,state licensing1 registration1 or chartering authority of the intermediary2 and 7#b7 in the case of a depository institution or other financial institution1 by the appropriate ,state or ,federal banking supervisor4 4 #eje4 ,right to individual management of digital assets ,chapter #ih of title #ca1 ,united ,states ,code1 as amended by section #ejd of this ,act1 is amended by adding at the end the following3 #ihjf4 ,right to individual management of digital assets 7a7 ,in general ,except as otherwise required by law1 no person shall be required to use an intermediary for the safekeeping of digital assets legally owned1 and possessed or controlled1 by that person4 7b7 ,rule of construction ,this section shall not be construed to-- 7#a7 permit a person to engage in market activity for which authorization is required under ,federal or ,state law2 or 7#b7 restrict a person from freely entering into an agreement for digital asset services with a third party4 4 #ejf4 ,technical and conforming amendments ,the table of sections of chapter #ih1 as added by section #aja7;a7 of this ,act1 is amended by adding at the end the following3 #ihjb4 ,consumer protection standards for digital assets4 #ihjc4 ,source code version of digital assets4 #ihjd4 ,settlement finality4 #ihje4 ,notice to customers2 enforcement4 #ihjf4 ,right to individual management of digital assets4 4 ,,vi ,responsible payments innovation #fja4 ,issuance of payment stablecoins ,subtitle ,c of title ,,vii of the ,gramm-,leach-,bliley ,act 7,public ,law #ajf-ajb2 #aac ,stat4 #adgj7 is amended by adding at the end the following3 #gbb;,a4 ,issuance of payment stablecoins 7a7 ,in general ,a depository institution may issue1 redeem1 and conduct all incidental activities relating to payment stablecoins in accordance with this section4 7b7 ,required payment stablecoin assets ,a depository institution shall maintain high-quality liquid assets under this section equal to not less than #ajj percent of the face amount of the liabilities of the institution on payment stablecoins issued by the institution4 ,in the case of an insured depository institution described in subsection 7m77#a77;,a7 that engages in on-balance sheet lending activities1 assets under this subsection shall equal not less than #ajj percent of the face amount of the liabilities of the institution on payment stablecoins issued by the institution1 with the assets held in balances at a ,federal ,reserve bank 7which may include a segregated balance account71 or1 in the case of foreign withdrawable reserves1 at a foreign central bank1 in a special1 custodial1 or trust account1 other off-balance sheet account1 or in another equivalent manner that ensures the segregation of the assets in the event of receivership4 ,an insured depository institution may segregate the issuance and management of payment stablecoins into a separate depository institution affiliate under the same holding company structure4 ,eligible high-quality liquid assets under this section shall be comprised of the following3 7#a7 ,united ,states coins and currency and any other instrument that is legal tender1 as defined in section #eajc of title #ca1 ,united ,states ,code4 7#b7 ,demand deposits at a depository institution1 except that deposits in an insured depository institution shall not exceed the limit of deposit or share insurance available for that account1 which may include pass through insurance1 or shall be maintained in a special1 custodial1 or trust account or other off-balance sheet account held by the insured depository institution4 7#c7 ,balances held at a ,federal ,reserve bank1 which may be held in a master account or segregated balance account4 7#d7 ,foreign withdrawable reserves1 as defined in section #bdi4c of title #ab1 ,code of ,federal ,regulations1 consistent with any foreign unit of account in which the payment stablecoin is denominated or pegged4 7#e7 ,a security that is issued by1 or unconditionally guaranteed as to the timely payment of principal and interest by1 the ,department of the ,treasury1 with an original maturity of #a year or less4 7#f7 ,a reserve repurchase agreement relating to a security described in paragraph 7#e74 7#g7 ,any other high-quality1 liquid asset determined to be consistent with safe and sound banking practices1 as determined by the appropriate ,federal banking agency or ,state bank supervisor4 7c7 ,disclosures ,not later than #aj business days after the end of each month1 a depository institution shall disclose1 in a publicly accessible manner1 a summary description of the assets backing the payment stablecoin1 the value of the assets1 and the number of outstanding payment stablecoins1 as of the last day of the month4 ,such explanation shall be filed with the appropriate ,federal banking agency or ,state bank supervisor under penalty of perjury by the chief financial officer of the institution4 ,the depository institution shall also report on the summary description any instances in which the institution failed to comply with any requirement of subsection 7b74 ,as applicable1 the appropriate ,federal banking agency or ,state bank supervisor shall1 as part of a regular examination of the depository institution1 at the frequency otherwise required by law1 verify the composition of the assets and the accuracy of the summary descriptions made under this subsection and reports under subsection 7d74 7d7 ,call report ,as applicable1 the appropriate ,federal banking agency or ,state bank supervisor shall require a depository institution that issues a payment stablecoin to report1 in detail1 on the composition of the assets in each periodic report of condition1 or in an alternative format approved by the ,federal ,financial ,institutions ,examination ,council1 at the frequency otherwise required by law4 7e7 ,permission ,a depository institution shall1 as applicable1 obtain permission from the appropriate ,federal banking agency or ,state bank supervisor1 with an application submitted not less than #f months before intended issuance of the payment stablecoin1 but which may be submitted as part of a charter application4 ,as part of an application under this section1 a depository institution shall develop a tailored recovery and resolution plan1 consistent with the standards adopted under subsection 7k77#a77;,f71 that would permit the orderly resumption of a safe and sound operation or the orderly wind-down of operations in the event of distress1 including the redemption of all outstanding payment stablecoins4 ,the application shall also contain a draft customer agreement1 flow of funds explanation1 a robust information technology plan and operational design of the payment stablecoin4 ,as applicable1 the appropriate ,federal banking agency or ,state bank supervisor shall render a decision on the application within #d months of the date of filing1 and shall approve the application unless-- 7#a7 the payment stablecoin activities are not likely to be able to operate in a safe and sound manner2 7#b7 the depository institution does not have the required resources and expertise to manage the operation of the payment stablecoin1 commensurate with the size and scale of projected operations2 or 7#c7 the depository institution does not have required policies and procedures relating to material areas of the operation of the payment stablecoin activities4 7f7 ,redemption of payment stablecoins ,upon the demand of a customer1 a depository institution shall redeem an outstanding payment stablecoin at par in the coins1 currency1 or other instruments that are legal tender1 as defined in section #eajc of title #ca1 ,united ,states ,code1 or the similar laws of the jurisdiction of the unit of account in which the payment stablecoin is denominated or to which the value of the payment stablecoin is pegged4 ,a depository institution may redeem a payment stablecoin issued by another depository institution at par1 upon demand4 ,the ,board of ,governors of the ,federal ,reserve ,system1 through the ,federal ,reserve banks1 shall provide for the clearing and settlement of payment stablecoin liabilities among depository institutions under this section and shall ensure competitive equality in all clearing1 settlement and related services4 ,a depository institution shall also assess its ability to fulfill large redemptions without placing downward pressure on the market value of the payment stablecoin4 7g7 ,collateral availability in the capital markets ,the appropriate ,federal banking agencies1 in consultation with ,state bank supervisors1 the ,securities and ,exchange ,commission1 and ,commodity ,futures ,trading ,commission1 shall monitor use of the high-quality liquid assets authorized under subsection 7b7 and the impact on collateral availability and the efficient functioning of the capital markets4 7h7 ,receivership priority ,in the event of the receivership of a depository institution that has issued a payment stablecoin under this section1 a person that has a valid claim on a payment stablecoin issued by that institution shall have priority over all other claims on the institution with respect to any required payment stablecoin assets1 including claims with respect to insured deposits1 other than administrative costs incurred by the appropriate ,federal banking agency or ,state bank supervisor1 as applicable1 relating to the receivership of the institution1 if applicable4 ,consistent with subsection 7f71 a depository institution that redeems a payment stablecoin issued by a depository institution in receivership shall be considered to have a valid claim1 with corresponding priority under this subsection1 on a payment stablecoin issued by the institution in receivership4 7i7 ,incidental activities ,a depository institution may conduct all incidental activities relating to the issuance and redemption of payment stablecoins1 which shall include the following3 7#a7 ,management of required payment stablecoin assets in accordance with subsection 7b74 7#b7 ,making a market in payment stablecoins4 7#c7 ,custodial services4 7#d7 ,settlement and clearing4 7#e7 ,post-trade services4 7#f7 ,all other activities consistent with a safe and sound operation1 as determined by the appropriate ,federal banking agency or ,state bank supervisor4 7j7 ,applicability of ,gramm-,leach-,bliley data privacy provisions ,title ,v of the ,gramm-,leach-,bliley ,act 7#ab ,u4,s4,c4 #fhja et seq47 shall apply to the payment stablecoin activities of a depository institution under this section4 7k7 ,rules 7#a7 ,in general ,the appropriate ,federal banking agencies1 in consultation with ,state bank supervisors1 shall adopt rules to implement this section1 including-- 7,a7 capital treatment for depository institutions described in subsection 7m77#a7 in accordance with paragraph 7#b72 7,b7 liquidity1 leverage1 and interest rate risk2 7,c7 third-party service provider activities-- 7i7 including custodial wallet providers2 and 7ii7 not including licensing or capital requirements for third-party service providers2 7,d7 management practices with respect to required payment stablecoin assets2 7,e7 appropriate operational1 compliance1 and information technology risk management2 7,f7 tailored recovery and resolution standards relating to payment stablecoins2 and 7,g7 any other material topic4 7#b7 ,significant differences ,in accordance with section #eafi7;c77#c77;,a7 of the ,revised ,statutes1 in determining capital and leverage requirements applicable to a depository institution that has no material assets other than required payment stablecoin assets under this section-- 7,a7 the depository institution shall not be subject to section #aga of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecga72 and 7,b7 the appropriate ,federal banking agencies shall take into account the significant differences between the risks of the assets of the institution and those of depository institutions with assets that consist primarily of commercial or consumer loans4 7l7 ,non-,depository institution payment stablecoin issuers ,nothing in this section shall be construed to prohibit an entity operating under a ,state or ,federal charter or license that is not a depository institution from issuing and redeeming a payment stablecoin and conducting all activities related to the management of such payment stablecoin consistent with a safe and sound operation1 as determined by the appropriate regulator of the entity4 ,the entity shall-- 7#a7 be subject to the requirements of subsections 7b7 and 7c72 and 7#b7 redeem an outstanding payment stablecoin at par in the coins1 currency1 or other instruments that are legal tender1 as defined in section #eajc1 or the similar laws of the jurisdiction of the unit of account in which the payment stablecoin is denominated or to which the value of the payment stablecoin is pegged4 7m7 ,definitions ,in this section3 7#a7 ,depository institution ,the term depository institution has the meaning given the term in section #ai7;b77#a7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #dfa7;b77#a77 and includes-- 7,a7 an insured depository institution2 or 7,b7 a depository institution operating under subsection 7c7 of section #eafi of the ,revised ,statutes 7#ab ,u4,s4,c4 #bg71 or a substantially similar ,state law1 which is exclusively engaged in issuing payment stablecoins1 providing safekeeping1 trust or custodial services1 or activities incidental to the foregoing4 7#b7 ,payment stablecoin ,the term payment stablecoin has the meaning given the term in section #ihja of title #ca1 ,united ,states ,code4 7#c7 ,segregated balance account ,the term segregated balance account includes an account of a depository institution with a ,federal ,reserve bank or a foreign central bank to which only required payment stablecoin assets are credited4 4 #fjb4 ,sanctions compliance responsibilities of payment stablecoin issuers ,not later than #abj days after the date of the enactment of this ,act1 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 issuer4 #fjc4 ,use of the official digital currency of the ,people's ,republic of ,china on ,government devices 7a7 ,definitions ,in this section-- 7#a7 the term digital yuan means the official central bank digital currency of the ,people's ,republic of ,china2 7#b7 the term executive agency has the meaning given that term in section #acc of title #da1 ,united ,states ,code2 and 7#c7 the term information technology has the meaning given that term in section #aaaja of title #dj1 ,united ,states ,code4 7b7 ,use of digital yuan ,not later than #fj days after the date of enactment of this ,act1 the ,director of the ,office of ,management and ,budget1 in consultation with the ,administrator of ,general ,services1 the ,director of the ,cybersecurity and ,infrastructure ,security ,agency1 the ,director of ,national ,intelligence1 and the ,secretary of ,defense1 and consistent with the information security requirements under subchapter ,,ii of chapter #ce of title #dd1 ,united ,states ,code1 shall develop standards and guidelines for executive agencies which require adequate security measures for use of the digital yuan on ,government information technology devices4 #fjd4 ,certificate of authority to commence banking ,section #eafi of the ,revised ,statutes 7#ab ,u4,s4,c4 #bg7 is amended-- 7#a7 in subsection 7a71 in the third sentence1 by striking to those of a trust company and activities related thereto4 and inserting the following3 to-- 7#a7 those of a trust company and fiduciary activities related thereto2 or 7#b7 those of a depository institution required to maintain assets valued at not less than #ajj percent of the deposits of the institution1 for the purposes of issuing a payment stablecoin 7as defined in section #ihja of title #ca1 ,united ,states ,code7 and activities related thereto consistent with subsection 7c7 of this section and without the requirement to maintain deposit insurance under the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahaa et seq474 2 and 7#b7 by adding at the end the following3 7c7 7#a7 ,notwithstanding any other provision of law1 a ,national ,bank ,association described in subsection 7a7 may not engage in maturity transformation or facilitate consumer lending through third parties4 7#b7 ,restrictions on affiliate transactions applicable for insured depository institutions shall apply to such depository institutions4 7#c7 ,the ,comptroller of the ,currency1 in close consultation with the ,board of ,governors of the ,federal ,reserve ,system and ,state bank supervisors1 shall develop the following3 7,a7 ,a simplified capital framework based on the following3 7i7 ,payment system risk4 7ii7 ,the greater of-- 7,i7 all projected costs of receivership2 or 7,,ii7 #c years of projected operating expenses4 7,b7 ,appropriate standards for the depository institution to develop a community contribution plan1 which may include consumer education1 financial literacy1 charitable donations1 volunteerism1 job training and internships or similar involvement4 7,c7 ,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 distress4 7,d7 ,tailored holding company supervision1 as specified by section #ae of the ,bank ,holding ,company ,act of #aief4 7#d7 ,in designing the simplified capital framework required by paragraph 7#c77;,a71 the ,comptroller of the ,currency-- 7,a7 shall not subject depository institutions to the standards of section #aga of the ,financial ,stability ,act of #bjaj 7#ab ,u4,s4,c4 #ecga72 and 7,b7 shall take into account the significant differences between the risks of the assets of the institution and those of depository institutions with assets that consist primarily of commercial or consumer loans4 7d7 ,the ,comptroller of the ,currency may promulgate rules to carry out this section4 4 #fje4 ,holding company supervision of covered depository institutions ,the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahda et seq47 is amended-- 7#a7 in section #b7;c7 7#ab ,u4,s4,c4 #ahda7;c771 by striking paragraph 7#b7 and by inserting the following3 7#b7 ,exceptions ,the term bank does not include a covered depository institution subject to tailored holding company supervision under section #ae4 2 and 7#b7 by adding at the end the following3 #ae4 ,tailored holding company supervision for covered depository institutions 7a7 ,definitions ,in this section3 7#a7 ,appropriate banking supervisor ,the term appropriate banking supervisor means the ,comptroller of the ,currency1 a ,state bank supervisor1 in the case of a ,state member bank1 the ,board1 or in the case of an insured bank1 the ,federal ,deposit ,insurance ,corporation1 as applicable4 7#b7 ,controlling interest ,the term controlling interest means a circumstance when a person1 directly or indirectly1 or acting through or in concert with #a or more persons-- 7,a7 owns1 controls1 or has the power to vote #be percent or more of any class of voting securities of a covered depository institution2 7,b7 controls in any manner the election of a majority of the directors of the covered depository institution2 or 7,c7 has the power to exercise a controlling influence over the management or policies of the covered depository institution4 7#c7 ,covered depository institution ,the term covered depository institution means a depository institution operating under subsection 7c7 of section #eafi of the ,revised ,statutes 7#ab ,u4,s4,c4 #bg71 or a substantially similar ,state law1 other than a bank1 as defined in section #b of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahda71 or an insured depository institution1 as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac71 which is exclusively engaged in issuing payment stablecoins1 providing safekeeping1 trust or custodial services1 or activities incidental to the foregoing4 7b7 ,controlling interest ,a person with a controlling interest in a covered depository institution shall-- 7#a7 submit annual audited financial statements and other information as otherwise reasonably required by the appropriate banking supervisor2 and 7#b7 provide a description of all affiliated or parent entities and their relationships with the institution1 including annual updates4 7c7 ,tax allocation agreement ,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-- 7#a7 expressly states that an agency relationship exists between the person and the institution with respect to tax assets generated by the institution1 and that the assets are held in trust by the person for the benefit of the institution and will be promptly remitted to the institution2 and 7#b7 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 taxpayer4 7d7 ,prohibition on controlling interests ,a person that is a commercial firm1 as defined in section #fjb of the ,bank and ,savings ,association ,holding ,company and ,depository ,institution ,regulatory ,improvements ,act of #bjaj 7#ab ,u4,s4,c4 #ahae note71 may not obtain a controlling interest in a covered depository institution4 7e7 ,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 institution1 the supervisor may-- 7#a7 conduct an examination of a legal entity with a controlling interest in a covered depository institution or otherwise require information from the person2 and 7#b7 require a person with a controlling interest in a covered depository institution to divest or sever their relationship with the institution1 if necessary to maintain safety and soundness4 4 #fjf4 ,implementation rules to preserve adequate competition in payment stablecoins 7a7 ,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 obtain1 which was chartered or issued under the laws of a ,state or the ,national ,bank ,act before the date of enactment of this ,act1 to receive a charter as a depository institution and to operate under subsection 7c7 of section #eafi of the ,revised ,statutes 7#ab ,u4,s4,c4 #bg71 as added by section #fjd of this ,act1 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 ,act4 7b7 ,application ,the application of a covered depository institution1 as defined in section #ae7;a7 of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahec7;a771 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 #aa;,a of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #bdh;a7 shall be decided upon by the ,board of ,governors of the ,federal ,reserve ,system1 or a ,federal ,reserve bank1 as applicable1 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 ,act4 7c7 ,decision ,the applications described in subsections 7a7 and 7b7 of this section shall be decided upon by the appropriate ,federal banking agency 7as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac77 or ,federal ,reserve bank1 as applicable1 before an insured depository institution in operation before the enactment date of this ,act may issue a payment stablecoin in accordance with section #gbb;,a of the ,gramm-,leach-,bliley ,act1 as added by section #fja of this ,act4 #fjg4 ,financial ,crimes ,enforcement ,network ,innovation ,laboratory ,section #caj of title #ca1 ,united ,states ,code1 is amended by adding at the end the following3 7m7 ,innovation laboratory 7#a7 ,in general ,there is established within the ,financial ,crimes ,enforcement ,network an ,innovation ,laboratory to promote regulatory dialogue1 data sharing between the ,financial ,crimes ,enforcement ,network and financial companies1 and an assessment of potential changes in law1 rules1 or policies to facilitate the appropriate supervision of financial technology and the laws under the jurisdiction of the agency4 7#b7 ,chief innovation officer ,the innovation officer appointed under section #fbjh of the ,anti-,money ,laundering ,act of #bjbj 7#ca ,u4,s4,c4 #ecaa note7 by the ,director of the ,financial ,crimes ,enforcement ,network shall manage the ,innovation ,laboratory4 7#c7 ,duties ,the ,innovation ,laboratory1 as appropriate1 shall study changes in financial technology and make recommendations to ,congress1 the ,secretary1 and the ,director for appropriate changes in laws1 rules1 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 ,network1 including digital assets1 distributed ledger technology and decentralized finance4 7#d7 ,pilot projects ,the ,innovation ,laboratory1 as appropriate1 shall conduct pilot projects with financial companies to more effectively facilitate the supervision of financial technology1 consistent with applicable law4 4 ,,vii ,responsible banking innovation #gja4 ,study on use of distributed ledger technology for reduction of risk in depository institutions ,not later than #ahj days after the date of enactment of this ,act1 the ,board of ,governors of the ,federal ,reserve ,system shall complete a study and submit to the ,committee on ,banking1 ,housing1 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 institutions1 as defined in section #ai7;b77#a7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #dfa7;b77#a771 including settlement risk1 operational risk and capital requirements4 #gjb4 ,eligibility for ,federal ,reserve services to depository institutions 7a7 ,findings ,congress finds the following3 7#a7 ,final settlement of transactions in central bank money reduces risk in the financial system1 including through the reduction of counterparty exposure4 7#b7 ,digital assets settle with finality in seconds or minutes1 whereas traditional financial transactions may take days to settle4 7#c7 ,this mismatch in the settlement window of digital assets and traditional financial assets creates risk in the economy that may be reduced through the ability of depository institutions to simultaneously conduct digital asset transactions and settle1 with finality1 the ,united ,states dollar component of these transactions4 7#d7 ,the ,federal ,reserve ,act specifies that a depository institution1 as defined in section #ai7;b77#a7 of that ,act 7#ab ,u4,s4,c4 #dfa7;b77#a771 upon receiving a charter from the ,office of the ,comptroller of the ,currency1 ,national ,credit ,union ,administration or ,state bank supervisor1 is required to be made available services from ,federal ,reserve banks under section #aa;,a of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #bdh;a71 including currency and coin services1 wire transfer services1 automated clearinghouse services and settlement services4 7#e7 ,numerous ,federal courts have found that the provision of services to depository institutions under section #aa;,a of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #bdh;a7 is a ministerial duty imposed by ,congress with respect to all depository institutions4 7#f7 ,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 institutions1 noting that it has a duty to ensure the provision of payment services to all depository institutions on an equitable basis1 and to do so in an atmosphere of competitive fairness4 7#g7 ,the ,federal ,reserve banks have1 on occasion1 provided services to non-depository1 non-insured institutions without appropriate statutory authority4 7#h7 ,certain novel legal positions that conflict with or frustrate these precedents are not in the best traditions of the ,federal ,reserve ,act1 our dual banking system1 and the imperatives of ,congress4 7#i7 ,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 ,congress4 7#aj7 ,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 basis1 and to do so in an atmosphere of competitive fairness4 7b7 ,pricing of services ,section #aa;,a of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #bdh;a7 is amended by adding at the end the following3 7f7 ,a ,federal ,reserve bank shall provide a segregated balance account to a depository institution upon the request of any institution that receives services under this section4 4 7c7 ,deposits2 exchange and collection2 member and nonmember banks or other depository institutions2 charges ,section #ac of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #cdb7 is amended to read as follows3 ,any ,federal ,reserve bank shall receive from any of its member banks or other depository institutions1 and from the ,united ,states1 deposits of current funds in lawful money1 national-bank notes1 ,federal reserve notes1 or checks1 and drafts1 payable upon presentation or other items1 and also1 for collection1 maturing notes and bills2 or1 solely for purposes of exchange or of collection1 shall receive from other ,federal ,reserve banks deposits of current funds in lawful money1 national-bank notes1 or checks upon other ,federal ,reserve banks1 and checks and drafts1 payable upon presentation within its district or other items1 and maturing notes and bills payable within its district2 or1 solely for the purposes of exchange or of collection1 shall receive from any nonmember bank or trust company or other depository institution deposits of current funds in lawful money1 national-bank notes1 ,federal reserve notes1 checks and drafts payable upon presentation or other items1 or maturing notes and bills3 ,provided1 ,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 transit1 services provided by the ,federal ,reserve bank1 and other factors as the ,board may deem appropriate3 ,provided further1 ,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 charges1 to be determined and regulated by the ,board of ,governors1 but in no case to exceed #aj cents per #ajj or fraction thereof1 based on the total of checks and drafts presented at any one time1 for collection or payment of checks and drafts and remission therefor by exchange or otherwise2 but no such charges shall be made against the ,federal ,reserve banks4 4 #gjc4 ,routing transit number issuance ,not later than #b years after the date of enactment of this ,act1 the ,board of ,governors of the ,federal ,reserve ,system shall assume responsibility for issuing routing transit numbers to depository institutions for all purposes relating to the clearing of transactions and the services required to be made available to all depository institutions under section #aa;,a of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #bdh;a74 #gjd4 ,clarifying application review times with respect to the ,federal banking agencies ,section #cdc of the ,riegle ,community ,development and ,regulatory ,improvement ,act of #aiid 7#ab ,u4,s4,c4 #dhjg7 is amended by striking subsection 7a7 and inserting the following3 7a7 ,final action 7#a7 ,definition ,in this subsection1 the term completed application-- 7,a7 means the information requested by the ,federal banking agency at the outset of an application through application forms or similar means2 and 7,b7 does not include supplemental information requested by the agency after filing of an application4 7#b7 ,action ,each ,federal banking agency1 including ,federal ,reserve banks1 shall take final action on any application to the agency before the end of the #a-year period beginning on the date on which a completed application is received by the agency4 7b7 ,report ,each ,federal banking agency1 including the ,federal ,reserve banks1 shall annually report to ,congress a list of the applications that have been pending for #i months or longer since the date of the initial application filed by an applicant4 ,such list-- 7#a7 shall disclose the reason why the application has not yet been approved or denied by the ,federal banking agency2 and 7#b7 shall not contain confidential supervisory information4 4 #gje4 ,examination standards for digital asset activities 7a7 ,in general ,not later than #ah months after the date of enactment of this ,act1 the ,federal ,financial ,institutions ,examination ,council1 in consultation with the ,financial ,crimes ,enforcement ,network1 shall publish final guidance and examiner handbooks for depository institutions1 as defined in section #ai7;b77#a7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #dfa7;b77#a771 on the following topics related to digital assets3 7#a7 ,anti-money laundering1 customer identification1 beneficial ownership1 and sanctions compliance1 including with respect to payment stablecoin activities and subsidiary value 7as defined in section #ihjb7;c7 of title #ca1 ,united ,states ,code74 7#b7 ,custody4 7#c7 ,fiduciary and capital markets activities4 7#d7 ,information technology standards4 7#e7 ,payment system risk4 7#f7 ,consumer protection4 7b7 ,final guidance ,not later than #ah months after the date of enactment of this ,act1 ,securities and ,exchange ,commission and ,commodity ,futures ,trading ,commission1 in consultation with the ,financial ,crimes ,enforcement ,network1 shall publish final guidance and examiner handbooks relating to digital asset intermediaries regarding the topics described in paragraphs 7#a7 and 7#d7 of subsection 7a74 #gjf4 ,asset custody for depository institutions and certain other entities 7a7 ,findings ,congress finds the following3 7#a7 ,the laws surrounding custody of financial assets is largely customary1 uncodified1 and poorly understood4 7#b7 ,lack of uniformity amongst various jurisdictions' laws relating to custody has largely not been addressed by regulators1 can contribute to risk1 and is producing uncertainty for innovators4 7#c7 ,codifying basic principles around custody of financial assets will reduce systemic risk1 clearly define the rights and duties of both custodian and customer1 and contribute to a more uniform and effective banking system4 7b7 ,definition ,in this section1 the term custody means the safekeeping1 servicing and management of customer financial assets1 including currency1 securities and commodities1 on an off-balance sheet basis4 7c7 ,custody 7#a7 ,in general ,except as provided in paragraph 7#b71 custody of financial assets is accomplished by a bailment and established by a written customer agreement4 ,custody shall not be a fiduciary or trust activity unless the custodian is providing substantial discretionary services with respect to an account1 including through investment advice or investment discretion1 and the custodian owes a customer a higher standard of care or duty with respect to the customer of that account4 7#b7 ,exception ,a custodian and customer may establish a legal relationship other than a bailment pursuant to a written customer agreement4 7d7 ,proper documentation ,a custodial account shall be properly documented in a customer agreement1 with a clearly defined legal relationship between the custodian and customer4 ,custodial assets shall be properly identified and segregated from the assets of the custodian1 with proper documentation of asset segregation4 7e7 ,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 basis1 including for the purpose of accounting treatment for the custodian and the customers of the custodian1 notwithstanding the form in which the assets are maintained4 7f7 ,applicability ,this section shall apply to depository institutions1 as defined in section #ai7;b77#a7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #dfa7;b77#a771 and non-depository trust companies chartered under section #eafi of the ,revised ,statutes 7#ab ,u4,s4,c4 #bg74 #gjg4 ,reputation risk2 requirements for account termination requests and orders 7a7 ,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 order1 consistent with subsections 7b7 and 7c74 7b7 ,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 risk1 including through the examinations and ratings of the depository institution4 7c7 ,treatment of national security threats ,if an appropriate ,federal banking agency believes a specific customer or group of customers is1 or acting as a conduit for1 an entity which-- 7#a7 poses a threat to national security2 7#b7 is involved in terrorist financing2 7#c7 is an agency of the ,government of ,iran1 ,north ,korea1 ,syria1 or any country listed from time to time on the ,state ,sponsors of ,terrorism list2 7#d7 is located in1 or is subject to the jurisdiction of1 any country specified in paragraph 7#c72 or 7#e7 does business with any entity described in paragraph 7#c7 or 7#d71 unless the appropriate ,federal banking agency determines that the customer or group of customers has used due diligence to avoid doing business with that entity1 such belief shall satisfy the requirement under subsection 7a74 7d7 ,notice requirement 7#a7 ,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 accounts1 the agency shall-- 7,a7 provide such request or order to the institution in writing2 and 7,b7 accompany such request or order with a written justification for why such termination is needed1 including any specific laws or rules the agency believes are being violated by the customer or group of customers4 7#b7 ,justification requirement ,consistent with subsection 7b71 the justification described in paragraph 7#a77;,b7 may not be based on reputation risk to the depository institution4 7e7 ,customer notice 7#a7 ,notice required ,except as provided under paragraph 7#b7 or as otherwise prohibited from being disclosed by law1 if an appropriate ,federal banking agency orders a depository institution to terminate a specific customer account or a group of customer accounts1 the depository institution shall inform the specific customer or group of customers of the justification for the customer's account termination described under subsection 7b74 7#b7 ,notice prohibited 7,a7 ,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 security1 or are otherwise described under subsection 7a77#b71 neither the depository institution nor the appropriate ,federal banking agency may inform the customer or customers of the justification for the customer's account termination4 7,b7 ,notice prohibited in other cases ,if an appropriate ,federal banking agency determines that the notice required under paragraph 7#a7 may interfere with an authorized criminal investigation1 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 termination4 7f7 ,reporting requirement ,each appropriate ,federal banking agency shall issue an annual report to ,congress stating-- 7#a7 the aggregate number of specific customer accounts that the agency requested or ordered a depository institution to terminate during the previous year2 and 7#b7 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 authority4 7g7 ,definitions ,in this section3 7#a7 ,appropriate federal banking agency ,the term appropriate ,federal banking agency means-- 7,a7 the appropriate ,federal banking agency1 as defined in section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac72 and 7,b7 the ,national ,credit ,union ,administration1 in the case of an insured credit union4 7#b7 ,depository institution ,the term depository institution has the meaning given the term in section #ai7;b77#a7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #dfa7;b77#a77;,a774 #gjh4 ,conforming amendments 7a7 ,federal deposit insurance act ,section #ab of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahbb7 is amended by adding at the end the following3 7g7 ,appointment of receiver 7#a7 ,definition ,in this subsection1 the term covered depository institution has the meaning given the term in section #ae7;a7 of the ,bank ,holding ,company ,act of #aief4 7#b7 ,appointment ,the ,corporation may be appointed as receiver of a covered depository institution1 as defined in section #ae7;a7 of the ,bank ,holding ,company ,act of #aief4 7#c7 ,premiums ,a covered depository institution may not be charged deposit insurance premiums for the purpose of this subsection1 but the ,corporation may use the capital of the covered depository institution to fund the costs of the receivership4 7#d7 ,rules ,the ,corporation may promulgate rules to carry out this subsection1 which shall-- 7,a7 be substantially consistent with the rules for receivership of an insured depository institution2 and 7,b7 account for the limited activities1 capital1 and the required tailored recovery and resolution plan of the covered depository institution4 4 7b7 ,federal ,reserve ,act ,the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #bba et seq47 is amended-- 7#a7 in section #ai7;b77#a77;,a7 7#ab ,u4,s4,c4 #dfa7;b77#a77;,a77-- 7,a7 in clause 7vi71 by striking and at the end2 7,b7 in clause 7vii71 by striking the period at the end and inserting 2 and2 and 7,c7 by adding at the end the following3 7viii7 a covered depository institution1 as defined in section #ae7;a7 of the ,bank ,holding ,company ,act of #aief4 2 and 7#b7 in the first undesignated paragraph of section #i 7#ab ,u4,s4,c4 #cba71 in the first sentence1 by inserting 1 covered depository institutions1 as defined in section #ae7;a7 of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahec7;a771 after ,plan banks4 ,,viii ,responsible interagency coordination #hja4 ,timeline for interpretive guidance issued by ,federal financial agencies 7a7 ,in general ,title #ca1 ,united ,states ,code1 is amended by adding after chapter #ih1 as added by section #aja7;a7 of this ,act1 the following3 #ii ,responsible interagency coordination ,sec4 #iija4 ,timeline for interpretive guidance issues by ,federal financial agencies4 #iijb4 ,interstate sandbox activities4 #iija4 ,timeline for interpretive guidance issues by ,federal financial agencies 7a7 ,in general ,in this section3 7#a7 ,federal financial regulator ,the term ,federal financial regulator means-- 7,a7 ,board of ,governors of the ,federal ,reserve ,system and the ,federal ,reserve banks2 7,b7 ,commodity ,futures ,trading ,commission2 7,c7 ,department of the ,treasury2 7,d7 ,federal ,deposit ,insurance ,corporation2 7,e7 ,federal ,housing ,finance ,agency2 7,f7 ,national ,credit ,union ,administration2 7,g7 ,office of the ,comptroller of the ,currency2 7,h7 ,consumer ,financial ,protection ,bureau2 and 7,i7 ,securities and ,exchange ,commission4 7#b7 ,requesting person ,the term requesting person-- 7,a7 means any entity that is required to be chartered1 licensed1 supervised or registered by that agency2 and 7,b7 includes ,state agencies and self-regulatory organizations4 7b7 ,response ,not later than #ahj days after filing a written request for individualized interpretive guidance with respect to the application of a statute1 rule or policy under the jurisdiction of a ,federal financial regulator1 the agency shall provide a final1 complete and written response to the requesting person4 ,this subsection shall not apply to requests for guidance that the ,federal financial regulator determine lack substance4 7c7 ,other matters ,with respect to matters delegated or otherwise under the jurisdiction of self-regulatory organizations1 including national securities exchanges1 boards of trade1 and similar entities1 the self-regulatory organization shall be subject to the same requirements as a ,federal financial regulator under this section4 4 #hjb4 ,interstate sandbox activities 7a7 ,in general ,chapter #ii of title #ca1 ,united ,states ,code1 as added by section #gja of this ,act1 is amended by adding at the end the following3 #iijb4 ,interstate sandbox activities 7a7 ,definitions ,in this section3 7#a7 ,federal financial regulator ,the term ,federal financial regulator means the ,federal agency described in section #iija7;a77#a7 that would typically exercise jurisdiction over the product or service made available in the ,state financial regulatory sandbox1 or the ,department of the ,treasury1 in the case of a matter only within the jurisdiction of a ,state4 7#b7 ,financial company ,the term financial company means a business entity primarily engaged in activities that are financial in nature1 as described in section #d7k77#d7 of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahdc7k77#d774 7#c7 ,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 ,state4 7#d7 ,innovative ,the term innovative means new or emerging technology1 or new uses of existing technology1 that-- 7,a7 provides a financial product1 service1 business model1 or delivery mechanism to the public2 and 7,b7 has no substantially comparable1 widely available analogue in common use in the ,united ,states4 7#e7 ,state financial regulator ,the term ,state financial regulator includes ,state agencies that regulate1 supervise1 or license banks1 trust companies1 credit unions1 consumer credit1 consumer protection1 money transmission1 securities1 commodities1 and similar areas4 7#f7 ,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 dialogue1 data sharing amongst regulators and financial companies1 and to promote an assessment of potential changes in law1 rule1 or policy to facilitate the appropriate supervision of financial technology4 7b7 ,business conducted ,upon joint approval under subsection 7d71 a financial company in good standing in a ,state financial regulatory sandbox and operating for not less than #f months in that sandbox program1 may do business across ,state lines under the standards of this section4 ,if approved1 the ,state financial regulator and the ,federal financial regulator may agree upon reasonable adjustments to the number of customers that may be served1 increased bonding or collateral requirements1 and similar conditions which may be appropriate for conducting business nationally4 7c7 ,state sandbox requirements ,a ,state financial regulatory sandbox shall contain the following components for financial companies to be eligible to do business across ,state lines under this section3 7#a7 ,a limited sandbox period of not more than #bd months4 7#b7 ,consumer protection requirements1 which may include disclosures1 bonding1 insurance requirements1 and financial literacy programs for specified consumers4 7#c7 ,authority to conduct examinations of the financial company4 7#d7 ,a background investigation of the financial company and its officers1 directors1 members1 managers and key employees1 prior to commencing business4 7d7 ,decision ,upon submission of an application by a financial company to conduct business across ,state lines under subsection 7b71 the ,state financial regulator and ,federal financial regulator shall jointly issue a decision within #abj days with respect to that application1 irrespective of any supplemental information with respect to the application that may be requested after initial filing4 ,the ,federal financial regulator shall have the authority to conduct a joint examination of any financial company doing business under this section4 7e7 ,factors ,the ,state financial regulator and ,federal financial regulator shall consider the following factors in rendering a decision on the application3 7#a7 ,whether the product or service offered may be offered in a safe and sound manner across ,state lines4 7#b7 ,whether the management and capital of the financial company is commensurate with the scale of the company4 7#c7 ,risk management plans of the financial company4 7#d7 ,conduct of the financial company to date in the ,state regulatory sandbox1 and any past regulatory actions1 including actions against officers1 directors1 members1 managers and key employees4 7#e7 ,plans for consumer education and financial literacy1 including partnerships with local educational institutions and community colleges to provide financial literacy classes or resources4 7#f7 ,other factors determined by the ,state and ,federal financial regulators to be material4 7f7 ,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 ,state4 7g7 ,innovative ,a product or service made available under this section through a ,state financial regulatory sandbox shall be innovative4 7h7 ,rules of construction ,this section shall not be construed to extend to permit-- 7#a7 a financial company to engage in any activities for which a charter1 license1 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 company1 except to the extent the financial company would be required to obtain a charter1 license or other authorization required in a host ,state2 7#b7 failure to comply with any applicable portion of ,state law required by the ,state financial regulatory sandbox1 or failure to comply with any applicable portion of ,federal law1 unless authorized on a limited basis by the ,federal financial regulator to achieve the purposes of this section and the ,state financial regulatory sandbox2 or 7#c7 lending activities in excess of the maximum statutory rate of interest permissible in a ,state4 4 7b7 ,technical and conforming amendment ,the table of contents for subtitle ,,vi of title #ca1 ,united ,states ,code1 as amended by section #aja7;b7 of this ,act1 is amended by adding at the end the following3 #ii4 ,responsible interagency coordination#iija 4 #hjc4 ,state money transmission coordination relating to digital assets 7a7 ,in general ,in order to increase uniformity1 reduce regulatory burden1 and enhance consumer protection1 the ,states1 through the ,conference of ,state ,bank ,supervisors and the ,money ,transmission ,regulators ,association1 shall1 not later than #b years after the date of enactment of this ,act1 ensure uniform treatment of digital assets for the purposes of ,state money transmission laws on the following matters3 7#a7 ,whether digital assets are subject to money transmission licensing requirements1 as appropriate1 which shall include the exchange of digital assets for legal tender4 7#b7 ,treatment of payment stablecoins4 7#c7 ,non-applicability to persons or software that engage in validation of transactions1 non-custodial wallet providers1 or software or hardware development4 7#d7 ,tangible net worth and permissible investment requirements4 7#e7 ,disclosures1 reporting1 and recordkeeping4 7#f7 ,common examination and examiner training standards1 including common customer identification1 anti-money laundering1 and sanctions best practices developed in consultation with the ,financial ,crimes ,enforcement ,network and the ,office of ,foreign ,assets ,control4 7b7 ,regulations ,if the ,director of the ,bureau of ,consumer ,financial ,protection determines that a ,state does not have the requirements of subsection 7a7 in effect by law 7including regulations7 that are substantively consistent with the requirements of the several ,states on the date that is #b years after the date of enactment of this section1 the ,director shall adopt rules applicable to that ,state that achieve the purposes of subsection 7a7 and that are consistent with the standards adopted in the ,states that have the requirements of subsection 7a7 in effect4 ,the ,director may extend the deadline under this section for not more than #a year if a ,state has shown a good faith effort towards implementation4 ,the ,director may promulgate regulations to monitor ,state compliance with this subsection4 #hjd4 ,information sharing among ,federal and ,state financial regulators ,subtitle ,c of title ,,vii of the ,gramm-,leach-,bliley ,act 7,public ,law #ajf-ajb2 #aac ,stat4 #adgj71 as amended by section #fja of this ,act1 is amended by adding at the end the following3 #gbb;,b4 ,information sharing among ,federal and ,state financial regulators 7a7 ,confidentiality ,notwithstanding any other provision of law1 any requirement under ,federal or ,state law regarding the privacy or confidentiality of any information or materials exchanged among financial regulators and any privilege arising under ,federal or ,state law 7including the rules of any ,federal or ,state court7 with respect to such information or material1 shall continue to apply to such information or material after the information or material has been disclosed to any ,state or ,federal financial regulator4 7b7 ,non-,applicability of certain requirements ,information or material that is subject to privilege or confidentiality under subsection 7a7 shall not be subject to-- 7#a7 disclosure under any ,federal or ,state law governing the disclosure to the public of information held by an officer or an agency of the ,federal ,government or the respective ,state2 or 7#b7 subpoena or discovery1 or admission into evidence1 in any private civil action or administrative process1 unless with respect to any privilege held by the ,nationwide ,mortgage ,licensing ,system and ,registry or the ,director with respect to such information or material1 the person to whom such information or material pertains waives that privilege1 in whole or in part1 based on the discretion of such person4 7c7 ,coordination with other law ,any ,state or ,federal law1 including any ,state open records law1 relating to the disclosure of confidential supervisory information or any information or material described in subsection 7a7 that is inconsistent with subsection 7a7 shall be superseded by the requirements of such provision to the extent the ,state or ,federal law provides less confidentiality or a weaker privilege4 7d7 ,conference of ,state ,bank ,supervisors ,the ,conference of ,state ,bank ,supervisors shall be considered the agent of the ,state financial regulators for the purposes of sharing information under this provision4 7e7 ,definition ,in this section1 the term financial regulator means-- 7#a7 the ,board of ,governors of the ,federal ,reserve ,system and the ,federal ,reserve banks2 7#b7 the ,commodity ,futures ,trading ,commission2 7#c7 the ,department of the ,treasury1 including the ,financial ,crimes ,enforcement ,network and the ,office of ,foreign ,assets ,control2 7#d7 the ,federal ,deposit ,insurance ,corporation2 7#e7 the ,federal ,housing ,finance ,agency2 7#f7 the ,national ,credit ,union ,administration2 7#g7 the ,office of the ,comptroller of the ,currency2 7#h7 the ,bureau of ,consumer ,financial ,protection2 7#i7 the ,securities and ,exchange ,commission2 and 7#aj7 ,state agencies that regulate1 supervise1 or license banks1 trust companies1 credit unions1 consumer credit1 consumer protection1 money transmission1 securities1 commodities1 and similar areas4 4 #hje4 ,analysis of decentralized finance markets and technologies ,not later than #a year after the date of enactment of this ,act1 the ,secretary of the ,treasury1 in consultation with the ,commodity ,futures ,trading ,commission1 ,securities and ,exchange ,commission1 and private sector developers and participants in decentralized protocols1 digital assets1 and digital asset exchanges1 shall-- 7#a7 analyze the market position of decentralized finance technologies with respect to digital assets2 and 7#b7 submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs and the ,committee on ,agriculture1 ,nutrition1 and ,forestry of the ,senate and the ,committee on ,financial ,services and the ,committee on ,agriculture of the ,house of ,representatives a report on-- 7,a7 current development and use of decentralized finance protocols in the ,united ,states and other countries2 7,b7 opportunities1 benefits1 and challenges relating to decentralized finance protocols and self-custody of digital assets2 7,c7 a comparison of operational friction1 fees1 liquidity and trading opportunities in decentralized finance protocols1 digital asset markets1 and traditional markets2 7,d7 transparency1 prevention of manipulation1 and customer protection2 7,e7 cybersecurity and resiliency2 and 7,f7 ensuring the accuracy of information regarding the underlying smart contracts of a decentralized finance protocol and the transactions facilitated by such contracts1 as the information appears on a website or other similar means relating to the protocol4 #hjf4 ,analysis of energy consumption in digital asset markets 7a7 ,in general ,each year1 the ,federal ,energy ,regulatory ,commission1 in consultation with the ,commodity ,futures ,trading ,commission and ,securities and ,exchange ,commission1 shall analyze the following topics with respect to digital asset markets3 7#a7 ,energy consumption for mining and staking of digital asset transactions4 7#b7 ,the effect of energy consumption described in paragraph 7#a7 on national1 regional1 and local energy prices4 7#c7 ,the effects of mining and staking of digital asset transactions on baseload power levels4 7#d7 ,the use of renewable energy sources1 including use of nonrenewable sources that would otherwise be wasted1 and a comparison of digital asset market energy consumption with the financial services industry and economy as a whole4 7#e7 ,the sources and reliability of the data used under this subsection4 7#f7 ,a process for regulated entities to make information publicly available regarding energy consumption1 including sources of energy and amount1 and1 if appropriate1 recommendations to ,congress to establish such a process4 7b7 ,report ,not later than ,december #ca of each year1 the ,federal ,energy ,regulatory ,commission shall submit to the ,committee on ,energy and ,natural ,resources and the ,committee on ,environment and ,public ,works of the ,senate and the ,committee on ,energy and ,commerce and the ,committee on ,natural ,resources of the ,house of ,representatives a report containing the analysis required by subsection 7a74 #hjg4 ,analysis of self-regulation and registered digital asset associations 7a7 ,in general ,not later than #ahj days after the date of enactment of this ,act1 the ,commodity ,futures ,trading ,commission and ,securities and ,exchange ,commission1 in consultation with digital asset intermediaries1 as defined in section #ihja of title #ca1 ,united ,states ,code1 as added by section #aja of this ,act1 and standard-setting associations representing the digital asset industry1 shall conduct a study and submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs and the ,committee on ,agriculture1 ,nutrition1 and ,forestry of the ,senate and the ,committee on ,financial ,services and the ,committee on ,agriculture of the ,house of ,representatives a report setting forth principles for self-regulation for digital asset markets and a proposal for the establishment of registered digital asset associations for digital asset markets based on delegated authority from the ,commodity ,futures ,trading ,commission and ,securities and ,exchange ,commission to facilitate innovative1 efficient1 and orderly markets for digital assets in accordance with this ,act1 and the amendments made by this ,act1 including-- 7#a7 standard setting1 corporate transparency requirements1 and rulemaking relating to digital asset market conduct2 7#b7 regular consultation between the ,commodity ,futures ,trading ,commission and ,securities and ,exchange ,commission with respect to rules governing digital asset market conduct and the governance of registered digital asset associations2 7#c7 appropriate investigatory and disciplinary powers of registered digital asset associations and registered digital asset exchanges1 respectively2 7#d7 the authority of digital asset intermediaries to conduct activities relating to traditional assets2 7#e7 consumer education and financial literacy2 7#f7 professional accreditation and education2 7#g7 market surveillance and oversight1 including use of technology to facilitate shared trade practices and market surveillance2 7#h7 risk-based examination authority2 7#i7 dispute resolution and arbitration2 7#aj7 membership of registered digital asset association members in other self-regulatory organizations and mutual recognition and acceptance of rules and examination reports amongst self-regulatory organizations2 7#aa7 voluntary and compulsory membership structures2 7#ab7 the initial determination of the legal classification of a digital asset by a registered digital asset association1 subject to oversight by the ,commodity ,futures ,trading ,commission and ,securities and ,exchange ,commission2 and 7#ac7 the funding of registered digital asset associations based on fees4 7b7 ,interim rule ,not later than ,august #a1 #bjbb1 the ,commodity ,futures ,trading ,commission and ,securities and ,exchange ,commission shall jointly adopt an interim final rule specifying the scope of the study under subsection 7a71 including topics of discussion and questions for digital asset intermediaries and associations representing the digital asset industry1 and setting forth not fewer than #c public meetings for staff of the ,commodity ,futures ,trading ,commission and the ,securities and ,exchange ,commission to receive public comment4 ,the interim final rule shall establish a comment period of not less than #abj days prior to publication of the report under subsection 7a7 and contain draft legislative text for the creation of registered digital asset associations by ,congress4 #hjh4 ,cybersecurity standards for digital asset intermediaries 7a7 ,definition ,in this section1 the term digital asset intermediary has the meaning given the term in section #ihja of title #ca1 ,united ,states ,code1 as added by section #aja of this ,act4 7b7 ,requirement ,not later than #ah months after the date of enactment of this ,act1 the ,commodity ,futures ,trading ,commission and the ,securities and ,exchange ,commission1 in consultation with the ,secretary of the ,treasury and the ,director of the ,national ,institute of ,standards and ,technology1 shall develop comprehensive1 principles-based guidance relating to cybersecurity for digital asset intermediaries that account for1 with respect to such a digital asset intermediary-- 7#a7 the internal governance1 and organizational culture1 of the cybersecurity program of the digital asset intermediary2 7#b7 security operations of the digital asset intermediary1 including threat identification1 incident response1 and mitigation2 7#c7 risk identification and measurement by the digital asset intermediary2 7#d7 the mitigation of risk by the digital asset intermediary1 including policies of the digital asset intermediary1 controls implemented by the digital asset intermediary1 change management with respect to the digital asset intermediary1 and the supply chain integrity of the digital asset intermediary2 7#e7 assurance provided by1 and testing conducted by1 the digital asset intermediary1 including penetration testing and independent audits so conducted2 and 7#f7 the potential for digital asset intermediaries to be used to facilitate illicit activities1 including sanctions avoidance4 #hji4 ,advisory ,committee on ,financial ,innovation 7a7 ,establishment ,there is established the ,advisory ,committee on ,financial ,innovation 7in this section referred to as the ,committee74 7b7 ,membership 7#a7 ,composition ,the ,committee shall be composed of #aj members1 as follows3 7,a7 #b members appointed by the ,president from the financial technology industry4 7,b7 #d members appointed by the ,president with specializations in consumer protection1 consumer education1 financial literacy1 or financial inclusion4 7,c7 ,a commissioner from the ,securities and ,exchange ,commission1 as designated by the ,chair of the ,commission4 7,d7 ,a commissioner from the ,commodity ,futures ,trading ,commission1 as designated by the ,chair of the ,commission4 7,e7 ,a member of the ,board of ,governors of the ,federal ,reserve ,system1 as designated by the ,chair of the ,board4 7,f7 ,a ,state financial regulator1 as jointly designated by the ,national ,association of ,state ,securities ,administrators and the ,conference of ,state ,bank ,supervisors4 7#b7 ,political affiliation ,not more than #d of the members of the ,committee shall be from the same political party4 7#c7 ,appointment date ,the appointments of the members of the ,committee shall be made not later than #fj days after the date of enactment of this ,act4 7#d7 ,period of appointment2 vacancies 7,a7 ,in general ,a member of the ,committee shall be appointed for a term of #d years4 7,b7 ,vacancies ,a vacancy in the ,committee-- 7i7 shall not affect the powers of the ,committee2 and 7ii7 shall be filled in the same manner as the original appointment4 7#e7 ,meetings 7,a7 ,initial meeting ,not later than #fj days after the date on which all members of the ,committee have been appointed1 the ,committee shall hold its first meeting4 7,b7 ,frequency ,the ,committee shall meet at the call of the ,chair4 7,c7 ,quorum ,a majority of the members of the ,committee shall constitute a quorum1 but a lesser number of members may hold hearings4 7#f7 ,chairperson ,the members described in subparagraphs 7,c7 and 7,d7 of paragraph 7#a7 shall alternate1 on a yearly basis1 as ,chairperson of the ,committee1 with the member described in such subparagraph 7,d7 serving as the ,chair for the #a-year period following establishment of the ,committee4 7c7 ,duties 7#a7 ,matters studied ,the matters studied by the ,committee shall include-- 7,a7 digital assets2 7,b7 consumer education and financial literacy2 7,c7 market structure in the securities and commodities markets2 7,d7 banking1 payments and settlement2 7,e7 consumer credit2 7,f7 financial inclusion1 including reducing the cost of financial services for all people of the ,united ,states and promoting access to those services2 7,g7 efficiency in the financial system2 7,h7 reduction of systemic risk2 7,i7 competition in financial services2 and 7,j7 the ,state-,federal partnership in financial services regulation4 7#b7 ,report ,on an annual basis1 or as otherwise determined necessary by the ,chair of the ,committee1 the ,committee shall report to the ,president and to ,congress on1 and provide recommendations for legislation1 regulation1 and supervision relating to innovation in1 the matters studied under paragraph 7#a74 7d7 ,powers 7#a7 ,hearings ,the ,committee shall hold not less than #b hearings per calendar year to hear from interested parties and to discuss the work of the ,committee4 7#b7 ,information from ,federal agencies 7,a7 ,in general ,the ,committee may secure directly from a ,federal department or agency such information as the ,committee considers necessary to carry out this section4 7,b7 ,furnishing information ,on request of the ,chair of the ,committee1 the head of the department or agency shall furnish the information to the ,committee4 7#c7 ,postal services ,the ,committee may use the ,united ,states mails in the same manner and under the same conditions as other departments and agencies of the ,federal ,government4 7e7 ,compensation 7#a7 ,in general ,all members of the ,committee shall serve without compensation in addition to that received for their services as officers or employees of the ,united ,states1 and all other members of the ,committee shall serve without compensation4 7#b7 ,travel expenses ,each member of the ,committee may be allowed travel expenses1 including per diem in lieu of subsistence1 in accordance with sections #egjb and #egjc of title #e1 ,united ,states ,code1 while away from their homes or regular places of business in performance of services for the ,council4 7f7 ,staff 7#a7 ,in general ,the ,chair of the ,committee may1 without regard to the civil service laws 7including regulations71 appoint and terminate an executive director and such other additional personnel as may be necessary to enable the ,committee to perform its duties1 except that the employment of an executive director shall be subject to confirmation by the ,committee4 7#b7 ,compensation ,the ,chair of the ,committee may fix the compensation of the executive director and other personnel without regard to chapter #ea and subchapter ,,iii of chapter #ec of title #e1 ,united ,states ,code1 relating to classification of positions and ,general ,schedule pay rates1 except that the rate of pay for the executive director and other personnel may not exceed the rate payable for level ,v of the ,executive ,schedule under section #ecaf of that title4 7g7 ,detail of government employees ,a ,federal ,government employee may be detailed to the ,committee without reimbursement1 and such detail shall be without interruption or loss of civil service status or privilege4 7h7 ,procurement of temporary and intermittent services ,the ,chair of the ,committee may procure temporary and intermittent services under section #caji7;b7 of title #e1 ,united ,states ,code1 at rates for individuals that do not exceed the daily equivalent of the annual rate of basic pay prescribed for level ,v of the ,executive ,schedule under section #ecaf of that title4 7i7 ,termination ,section #ad of the ,federal ,advisory ,committee ,act 7#e ,u4,s4,c4 ,app47 shall not apply to the ,committee4 7j7 ,authorization of appropriations ,there is authorized to be appropriated to the ,committee to carry out this section #b1jjj1jjj for fiscal year #bjbc1 to remain available through fiscal year #bjbd4