H.R. 3633, Digital Asset Market Clarity Act of 2025, Engrossed in House (Part 2 of 2)
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Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.
GENIUS Act, by striking the second sentence; and
(2) in section 2(a)(1)(A) (7 U.S.C. 2(a)(1)(A)), in the 1st
sentence, by inserting ``subparagraphs (F) and (G) of
subsection (c)(2) of this section or'' before ``section 19''.
SEC. 402. REQUIRING FUTURES COMMISSION MERCHANTS TO USE QUALIFIED
DIGITAL ASSET CUSTODIANS.
Section 4d of the Commodity Exchange Act (7 U.S.C. 6d) is amended--
(1) in subsection (a)(2)--
(A) in the 1st proviso, by striking ``any bank or
trust company'' and inserting ``any bank, trust
company, or qualified digital asset custodian, as
applicable,''; and
(B) by inserting ``: Provided further, That any
such property that is a digital asset shall be held in
a qualified digital asset custodian'' before the period
at the end; and
(2) in subsection (f)(3)(A)(i), by striking ``any bank or
trust company'' and inserting ``any bank, trust company, or
qualified digital asset custodian''.
SEC. 403. TRADING CERTIFICATION AND APPROVAL FOR DIGITAL COMMODITIES.
Section 5c of the Commodity Exchange Act (7 U.S.C. 7a-2) is
amended--
(1) in subsection (a), by striking ``5(d) and 5b(c)(2)''
and inserting ``5(d), 5b(c)(2), and 5i(c)'';
(2) in subsection (b)--
(A) in each of paragraphs (1) and (2), by inserting
``digital commodity exchange,'' before ``derivatives'';
and
(B) in paragraph (3), by inserting ``digital
commodity exchange,'' before ``derivatives'' each place
it appears;
(3) in subsection (c)--
(A) in paragraph (2), by inserting ``or
participants'' before ``(in a'';
(B) in paragraph (4)(B), by striking ``1a(10)'' and
inserting ``1a(9)''; and
(C) in paragraph (5), by adding at the end the
following:
``(D) Special rules for digital commodity
contracts.--In certifying any new rule or rule
amendment, or listing any new contract or instrument,
in connection with a contract of sale of a commodity
for future delivery, option, swap, or other agreement,
contract, or transaction, that is based on or
references a digital commodity, a registered entity
shall make or rely on a certification under subsection
(d) for the digital commodity.''; and
(4) by inserting after subsection (c) the following:
``(d) Certifications for Digital Commodity Trading.--
``(1) In general.--Notwithstanding subsection (c), for the
purposes of listing or offering a digital commodity for trading
in a digital commodity cash or spot market, an eligible entity
shall submit a written certification to the Commission that the
digital commodity meets the requirements of this Act (including
the regulations prescribed under this Act).
``(2) Contents of the certification.--
``(A) In general.--In making a written
certification under this paragraph, the eligible entity
shall furnish to the Commission an analysis of how the
digital commodity meets the requirements of section
5i(c)(3).
``(B) Reliance on prior disclosures.--In making a
certification under this subsection, an eligible entity
may rely on the records and disclosures of any relevant
person registered with the Securities and Exchange
Commission or other State or Federal agency.
``(3) Modifications.--
``(A) In general.--An eligible entity shall modify
a certification made under paragraph (1) to--
``(i) account for significant changes in
any information provided to the Commission
under paragraph (2)(A)(ii); or
``(ii) permit or restrict trading in units
of a digital commodity held by a digital
commodity related person or a digital commodity
affiliated person.
``(B) Recertification.--Modifications required by
this subsection shall be subject to the same
disapproval and review process as a new certification
under paragraphs (4) and (5).
``(4) Disapproval.--
``(A) In general.--The written certification
described in paragraph (1) shall become effective
unless the Commission finds that the listing of the
digital commodity is inconsistent with the requirements
of this Act or the rules and regulations prescribed
under this Act.
``(B) Analysis required.--The Commission shall
include, with any findings referred to in subparagraph
(A), a detailed analysis of the factors on which the
decision was based.
``(C) Public findings.--The Commission shall make
public any disapproval decision, and any related
findings and analysis, made under this paragraph.
``(5) Review.--
``(A) In general.--Unless the Commission makes a
disapproval decision under paragraph (4), the written
certification described in paragraph (1) shall become
effective, pursuant to the certification by the
eligible entity and notice of the certification to the
public (in a manner determined by the Commission) on
the date that is--
``(i) 20 business days after the date the
Commission receives the certification (or such
shorter period as determined by the Commission
by rule or regulation), in the case of a
digital commodity that has not been certified
under this section or for which a certification
is being modified under paragraph (3); or
``(ii) 1 business day after the date the
Commission receives the certification (or such
shorter period as determined by the Commission
by rule or regulation) for any digital
commodity that has been certified under this
section.
``(B) Extensions.--The time for consideration under
subparagraph (A) may be extended through notice to the
eligible entity that there are novel or complex issues
that require additional time to analyze, that the
explanation by the submitting eligible entity is
inadequate, or of a potential inconsistency with this
Act--
``(i) once, for 30 business days, through
written notice to the eligible entity by the
Commission; and
``(ii) once, for an additional 30 business
days, through written notice to the eligible
entity from the Commission that includes a
description of any deficiencies with the
certification, including any--
``(I) novel or complex issues which
require additional time to analyze;
``(II) missing information or
inadequate explanations; or
``(III) potential inconsistencies
with this Act.
``(6) Prior approval before registration.--
``(A) In general.--A person applying for
registration with the Commission for the purposes of
listing or offering a digital commodity for trading in
a digital commodity cash or spot market may request
that the Commission grant prior approval for the person
to list or offer the digital commodity on being
registered with the Commission.
``(B) Request for prior approval.--A person seeking
prior approval under subparagraph (A) shall furnish the
Commission with a written certification that the
digital commodity meets the requirements of this Act
(including the regulations prescribed under this Act)
and the information described in paragraph (2).
``(C) Deadline.--The Commission shall take final
action on a request for prior approval not later than
90 business days after submission of the request,
unless the person submitting the request agrees to an
extension of the time limitation established under this
subparagraph.
``(D) Disapproval.--
``(i) In general.--The Commission shall
approve the listing of the digital commodity
unless the Commission finds that the listing is
inconsistent with this Act (including any
regulation prescribed under this Act).
``(ii) Analysis required.--The Commission
shall include, with any findings made under
clause (i), a detailed analysis of the factors
on which the decision is based.
``(iii) Public findings.--The Commission
shall make public any disapproval decision, and
any related findings and analysis, made under
this paragraph.
``(7) Eligible entity defined.--In this subsection, the
term `eligible entity' means a registered entity or group of
registered entities acting jointly.''.
SEC. 404. REGISTRATION OF DIGITAL COMMODITY EXCHANGES.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
inserting after section 5h the following:
``SEC. 5I. REGISTRATION OF DIGITAL COMMODITY EXCHANGES.
``(a) In General.--
``(1) Registration.--
``(A) In general.--A trading facility that offers
or seeks to offer a cash or spot market in at least 1
digital commodity shall register with the Commission as
a digital commodity exchange.
``(B) Application.--A person desiring to register
as a digital commodity exchange shall submit 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.
``(C) Exemptions.--A trading facility that offers
or seeks to offer a cash or spot market in at least 1
digital commodity shall not be required to register
under this section if the trading facility--
``(i) permits no more than a de minimis
amount of trading activity, as the Commission
may determine by rule or regulation, in a
digital commodity; or
``(ii) serves only customers in a single
State, territory, or possession of the United
States.
``(2) Additional registrations.--
``(A) With the commission.--In order to foster the
development of fair and orderly markets, protect
customers, and promote responsible innovation, the
Commission--
``(i) shall prescribe rules to exempt an
entity registered with the Commission under
more than 1 section of this Act from
duplicative, conflicting, or unduly burdensome
provisions of this Act and the rules under this
Act;
``(ii) shall prescribe rules to address
conflicts of interests and activities of the
entity; and
``(iii) may, after an analysis of the risks
and benefits, prescribe rules to provide for
portfolio margining.
``(B) With a registered futures association.--
``(i) In general.--A registered digital
commodity exchange shall become and remain a
member of a registered futures association and
comply with rules related to such activity, if
the registered digital commodity exchange
accepts customer funds required to be
segregated under subsection (d).
``(ii) Rulemaking required.--The Commission
shall require any registered futures
association with a digital commodity exchange
as a member to provide such rules as may be
necessary to further compliance with subsection
(d), protect customers, and promote the public
interest.
``(C) Registration required.--A person required to
be registered as a digital commodity exchange under
this section shall register with the Commission as such
regardless of whether the person is registered with
another State or Federal regulator.
``(b) Trading.--
``(1) Prohibition on certain trading practices.--
``(A) Section 4b shall apply to any agreement,
contract, or transaction in a digital commodity as if
the agreement, contract, or transaction were a contract
of sale of a commodity for future delivery.
``(B) Section 4c shall apply to any agreement,
contract, or transaction in a digital commodity as if
the agreement, contract, or transaction were a
transaction involving the purchase or sale of a
commodity for future delivery.
``(C) Section 4b-1 shall apply to any agreement,
contract, or transaction in a digital commodity as if
the agreement, contract, or transaction were a contract
of sale of a commodity for future delivery.
``(2) Prohibition on acting as a counterparty.--
``(A) In general.--A digital commodity exchange or
any affiliate of such an exchange shall not trade on or
subject to the rules of the digital commodity exchange
for its own account.
``(B) Exceptions.--Subject to any conditions,
requirements, or limitations imposed by the Commission
pursuant to subparagraph (C), a digital commodity
exchange may engage in trading on the exchange so long
as the trading is not solely for the purpose of the
profit of the exchange, including the following:
``(i) Customer direction.--A transaction
for, or entered into at the direction of, or
for the benefit of, an unaffiliated customer.
``(ii) Risk management.--A transaction to
manage the credit, market, and liquidity risks
associated with the digital commodity business
of the exchange.
``(iii) Operational needs.--A transaction
related to the operational needs of the
business of the digital commodity exchange or
its affiliate.
``(iv) Functional use.--A transaction
related to the functional operation of a
blockchain system.
``(C) Rulemaking.--The Commission may, by rule,
establish conditions, requirements, or other
limitations on the activities of a digital commodity
exchange and its affiliate permitted pursuant to
subparagraph (B) that are necessary for the protection
of customers, the promotion of innovation, or the
maintenance of fair, orderly, and efficient markets.
``(D) Notice requirement.--In order for a digital
commodity exchange or any affiliate of a digital
commodity exchange to engage in trading on the
affiliated exchange pursuant to subsection (B), notice
must be given to the Commission that shall enumerate
how any proposed activity is consistent with the
exceptions in subsection (B) and the purposes of this
Act.
``(c) Core Principles for Digital Commodity Exchanges.--
``(1) Compliance with core principles.--
``(A) In general.--To be registered, and maintain
registration, as a digital commodity exchange, a
digital commodity exchange shall comply with--
``(i) the core principles described in this
subsection; and
``(ii) any requirement that the Commission
may impose by rule or regulation pursuant to
section 8a(5).
``(B) Reasonable discretion of a digital commodity
exchange.--Unless otherwise determined by the
Commission by rule or regulation, a digital commodity
exchange described in subparagraph (A) shall have
reasonable discretion in establishing the manner in
which the digital commodity exchange complies with the
core principles described in this subsection.
``(2) Compliance with rules.--A digital commodity exchange
shall--
``(A) establish and enforce compliance with any
rule of the digital commodity exchange, including--
``(i) the terms and conditions of the
trades traded or processed on or through the
digital commodity exchange; and
``(ii) any limitation on access to the
digital commodity exchange;
``(B) establish and enforce trading, trade
processing, and participation rules that will deter
abuses and have the capacity to detect, investigate,
and enforce those rules, including means--
``(i) to provide market participants with
impartial access to the market; and
``(ii) to capture information that may be
used in establishing whether rule violations
have occurred; and
``(C) establish rules governing the operation of
the exchange, including rules specifying trading
procedures to be used in entering and executing orders
traded or posted on the facility.
``(3) Listing standards for digital commodities.--
``(A) In general.--A digital commodity exchange
shall establish policies and procedures to permit
trading in a digital commodity only if--
``(i) reports with respect to the digital
commodity required under, as applicable,
section 4B(b)(3) or 4B(b)(5)(C) of the
Securities Act of 1933 (or, with respect to a
digital commodity not issued in reliance on
section 4(a)(8) of the Securities Act of 1933,
a comparable set of reports, where required by
the Securities and Exchange Commission) have
been filed with the Securities and Exchange
Commission; or
``(ii) such other similar information as
the Commission may, by rule or regulation
require, that is related to the ongoing
development plan of the blockchain system and
is able to be publicly ascertained, has been
provided to the public.
``(B) Public information requirements.--
``(i) In general.--A digital commodity
exchange shall--
``(I) permit trading in a digital
commodity only if the digital commodity
exchange reasonably determines that the
information required by clause (ii) is
correct, current, and available to the
public; and
``(II) establish policies and
procedures to determine that the
information provided pursuant to clause
(ii) is correct, current, and available
to the public.
``(ii) Required information.--With respect
to a digital commodity and each blockchain
system to which the digital commodity relates
for which the digital commodity exchange will
make the digital commodity available to the
customers of the digital commodity exchange,
the following information:
``(I) Source code.--The source code
for any blockchain system to which the
digital commodity relates.
``(II) Transaction history.--A
description of the steps necessary to
independently access, search, and
verify the transaction history of any
blockchain system to which the digital
commodity relates, to the extent any
such independent access, search, and
verification activities are technically
feasible with respect to the blockchain
system.
``(III) Digital commodity
economics.--A narrative description of
the purpose of any blockchain system to
which the digital commodity relates and
the operation of any such blockchain
system, including--
``(aa) information
explaining the launch and
supply process, including the
number of digital assets to be
issued in an initial
allocation, the total number of
digital commodities to be
created, the release schedule
for the digital commodities,
and the total number of digital
commodities then outstanding;
``(bb) information
detailing any applicable
consensus mechanism or process
for validating transactions,
method of generating or mining
digital commodities, and any
process for burning or
destroying digital commodities
on the blockchain system;
``(cc) an explanation of
governance mechanisms for
implementing changes to the
blockchain system or forming
consensus among holders of the
digital commodities; and
``(dd) sufficient
information for a third party
to create a tool for verifying
the transaction history of the
digital asset.
``(IV) Trading volume and
volatility.--The trading volume and
volatility of the digital commodity on
the exchange.
``(V) Additional information.--Such
additional information as the
Commission may determine by rule to be
necessary for a customer to understand
the financial and operational risks of
a digital commodity, and to be
practically feasible to provide.
``(iii) Format.--The Commission shall
prescribe rules and regulations for the
standardization and simplification of
disclosures under clause (ii), including
requiring that disclosures--
``(I) be conspicuous;
``(II) use plain language
comprehensible to customers;
``(III) are not drafted in a way
that presumes the customer already has
a base knowledge, familiarity, or
understanding of the basic terminology,
operation, and function of blockchain
systems; and
``(IV) succinctly explain the
information that is required to be
communicated to the customer.
``(iv) Reliance on previous disclosures.--
In complying with this subparagraph, a digital
commodity exchange may rely on and make
available to the public relevant information
publicly disclosed to the Commission, the
Securities and Exchange Commission, or an
appropriate Federal banking agency.
``(C) Digital commodities held by related and
digital commodity affiliated persons.--A digital
commodity exchange shall establish policies and
procedures designed to permit the trading of a unit of
a digital commodity acquired from the issuer and held
by a digital commodity affiliated person or a digital
commodity related person, only in accordance with the
requirements of section 4C of the Securities Act of
1933.
``(4) Treatment of customer assets.--A digital commodity
exchange shall establish policies and procedures that are
designed to protect and ensure the safety of customer money,
assets, and property.
``(5) Monitoring of trading and trade processing.--
``(A) In general.--A digital commodity exchange
shall provide a competitive, open, and efficient market
and mechanism for executing transactions that protects
the price discovery process of trading on the exchange.
``(B) Protection of markets and market
participants.--A digital commodity exchange shall
establish and enforce rules--
``(i) to protect markets and market
participants from abusive practices committed
by any party, including abusive practices
committed by a party acting as an agent for a
participant; and
``(ii) to promote fair and equitable
trading on the exchange.
``(C) Trading procedures.--A digital commodity
exchange shall--
``(i) establish and enforce rules or terms
and conditions defining, or specifications
detailing--
``(I) trading procedures to be used
in entering and executing orders traded
on or through the facilities of the
digital commodity exchange; and
``(II) procedures for trade
processing of digital commodities on or
through the facilities of the digital
commodity exchange; and
``(ii) monitor trading in digital
commodities to prevent manipulation, price
distortion, and disruptions, through
surveillance, compliance, and disciplinary
practices and procedures, including methods for
conducting real-time monitoring of trading and
comprehensive and accurate trade
reconstructions.
``(6) Ability to obtain information.--A digital commodity
exchange shall--
``(A) establish and enforce rules that will allow
the facility to obtain any necessary information to
perform any of the functions described in this section;
``(B) provide the information to the Commission on
request; and
``(C) have the capacity to carry out such
international information-sharing agreements as the
Commission may require.
``(7) Emergency authority.--A digital commodity exchange
shall adopt rules to provide for the exercise of emergency
authority, in consultation or cooperation with the Commission
or a registered entity, as is necessary and appropriate,
including the authority to facilitate the liquidation or
transfer of open positions in any digital commodity or to
suspend or curtail trading in a digital commodity.
``(8) Timely publication of trading information.--
``(A) In general.--A digital commodity exchange
shall make public timely information on price, trading
volume, and other trading data on digital commodities
to the extent prescribed by the Commission.
``(B) Capacity of digital commodity exchange.--A
digital commodity exchange shall have the capacity to
electronically capture and transmit trade information
with respect to transactions executed on the exchange.
``(9) Recordkeeping and reporting.--
``(A) In general.--A digital commodity exchange
shall--
``(i) maintain records relating to the
business of the exchange, including a complete
audit trail, in a form and manner acceptable to
the Commission for a period of 5 years;
``(ii) report to the Commission, in a form
and manner acceptable to the Commission, such
information as the Commission determines to be
necessary or appropriate for the Commission to
perform the duties of the Commission under this
Act; and
``(iii) keep any such records of digital
commodities which relate to a security open to
inspection and examination by the Securities
and Exchange Commission.
``(B) Information-sharing.--Subject to section 8,
and on request, the Commission shall share information
collected under subparagraph (A) with--
``(i) the Board;
``(ii) the Securities and Exchange
Commission;
``(iii) each appropriate Federal banking
agency;
``(iv) each appropriate State bank
supervisor (within the meaning of section 3 of
the Federal Deposit Insurance Act);
``(v) the Financial Stability Oversight
Council;
``(vi) the Department of Justice; and
``(vii) any other person that the
Commission determines to be appropriate,
including--
``(I) foreign financial supervisors
(including foreign futures
authorities);
``(II) foreign central banks; and
``(III) foreign ministries.
``(C) Confidentiality agreement.--Before the
Commission may share information with any entity
described in subparagraph (B), the Commission shall
receive a written agreement from the entity stating
that the entity shall abide by the confidentiality
requirements described in section 8 relating to the
information on digital commodities that is provided.
``(D) Providing information.--A digital commodity
exchange shall provide to the Commission (including any
designee of the Commission) information under
subparagraph (A) in such form and at such frequency as
is required by the Commission.
``(10) Antitrust considerations.--Unless necessary or
appropriate to achieve the purposes of this Act, a digital
commodity exchange shall not--
``(A) adopt any rules or take any actions that
result in any unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on
trading.
``(11) Conflicts of interest.--The digital commodity
exchange shall establish and enforce rules--
``(A) to minimize conflicts of interest in the
decision making processes of the contract market; and
``(B) to establish a process for resolving
conflicts of interest referred to in subparagraph (A).
``(12) Financial resources.--
``(A) In general.--A digital commodity exchange
shall have adequate financial, operational, and
managerial resources, as determined by the Commission,
to discharge each responsibility of the digital
commodity exchange.
``(B) Minimum amount of financial resources.--A
digital commodity exchange shall possess financial
resources that, at a minimum, exceed the sum of--
``(i) the total amount that would enable
the digital commodity exchange to cover the
operating costs of the digital commodity
exchange for a 1-year period, as calculated on
a rolling basis; and
``(ii) the total amount necessary to meet
the financial obligations of the digital
commodity exchange to all customers of the
digital commodity exchange.
``(13) Disciplinary procedures.--A digital commodity
exchange shall establish and enforce disciplinary procedures
that authorize the digital commodity exchange to discipline,
suspend, or expel members or market participants that violate
the rules of the digital commodity exchange, or similar methods
for performing the same functions, including delegation of the
functions to third parties.
``(14) Governance fitness standards.--
``(A) Governance arrangements.--A digital commodity
exchange shall establish governance arrangements that
are transparent and designed to permit consideration of
the views of market participants.
``(B) Fitness standards.--A digital commodity
exchange shall establish and enforce appropriate
fitness standards for--
``(i) officers and directors; and
``(ii) any individual or entity with direct
access to, or control of, customer assets.
``(15) System safeguards.--A digital commodity exchange
shall--
``(A) establish and maintain a program of risk
analysis and oversight to identify and minimize sources
of operational and security risks, through the
development of appropriate controls and procedures, and
automated systems in accordance with industry
standards, that--
``(i) are reliable and secure; and
``(ii) have adequate scalable capacity;
``(B) establish and maintain emergency procedures,
backup resources, and a plan for disaster recovery that
allow for--
``(i) the timely recovery and resumption of
operations; and
``(ii) the fulfillment of the
responsibilities and obligations of the digital
commodity exchange; and
``(C) periodically conduct tests to verify that the
backup resources of the digital commodity exchange are
sufficient to ensure continued--
``(i) order processing and trade matching;
``(ii) price reporting;
``(iii) market surveillance; and
``(iv) maintenance of a comprehensive and
accurate audit trail.
``(d) Holding of Customer Assets.--
``(1) In general.--A digital commodity exchange shall hold
customer money, assets, and property in a manner to minimize
the risk of loss to the customer or unreasonable delay in
customer access to the money, assets, and property of the
customer.
``(2) Segregation of funds.--
``(A) In general.--A digital commodity exchange
shall treat and deal with all money, assets, and
property that is received by the digital commodity
exchange, or accrues to a customer as the result of
trading in digital commodities, as belonging to the
customer.
``(B) Commingling prohibited.--Money, assets, and
property described in subparagraph (A) shall be
separately accounted for and shall not be commingled
with the funds of the digital commodity exchange or be
used to margin, secure, or guarantee any trades or
accounts of any customer or person other than the
person for whom the same are held.
``(C) Exceptions.--
``(i) Use of funds.--
``(I) In general.--Notwithstanding
subparagraph (A), money, assets, and
property described in subparagraph (A)
may, for convenience, be commingled and
deposited in the same account or
accounts with any bank, trust company,
derivatives clearing organization, or
qualified digital asset custodian.
``(II) Withdrawal.--Notwithstanding
subparagraph (A), such share of the
money, assets, and property described
in subparagraph (A) as in the normal
course of business shall be necessary
to margin, guarantee, secure, transfer,
adjust, or settle a contract of sale of
a digital commodity with a registered
entity may be withdrawn and applied to
such purposes, including the payment of
commissions, brokerage, interest,
taxes, storage, and other charges,
lawfully accruing in connection with
the contract.
``(ii) Commission action.--Notwithstanding
subparagraph (A), in accordance with such terms
and conditions as the Commission may prescribe
by rule, regulation, or order, any money,
assets, or property of the customers of a
digital commodity exchange may be commingled
and deposited in customer accounts with any
other money, assets, or property received by
the digital commodity exchange and required by
the Commission to be separately accounted for
and treated and dealt with as belonging to the
customer of the digital commodity exchange.
``(3) Permitted investments.--Money described in paragraph
(2) may be invested in obligations of the United States, in
general obligations of any State or of any political
subdivision of a State, and in obligations fully guaranteed as
to principal and interest by the United States, or in any other
investment that the Commission may by rule or regulation
prescribe, and such investments shall be made in accordance
with such rules and regulations and subject to such conditions
as the Commission may prescribe.
``(4) Customer protection during bankruptcy.--
``(A) Customer property.--All assets held on behalf
of a customer by a digital commodity exchange, and all
money, assets, and property of any customer received by
a digital commodity exchange for trading or custody, or
to facilitate, margin, guarantee, or secure contracts
of sale of a digital commodity (including money,
assets, or property accruing to the customer as the
result of the transactions), shall be considered
customer property for purposes of section 761 of title
11, United States Code.
``(B) Transactions.--A transaction involving the
sale of a unit of a digital commodity occurring on or
subject to the rules of a digital commodity exchange
shall be considered a contract for the purchase or sale
of a commodity for future delivery, on or subject to
the rules of, a contract market or board of trade for
purposes of the definition of `commodity contract' in
section 761 of title 11, United States Code.
``(C) Exchanges.--A digital commodity exchange
shall be considered a futures commission merchant for
purposes of section 761 of title 11, United States
Code.
``(D) Assets removed from segregation.--Assets
removed from segregation due to a customer election
under paragraph (6) shall not be considered customer
property for purposes of section 761 of title 11,
United States Code.
``(5) Misuse of customer property.--
``(A) In general.--It shall be unlawful--
``(i) for any digital commodity exchange
that has received any customer money, assets,
or property for custody to dispose of, or use
any such money, assets, or property as
belonging to the digital commodity exchange or
any person other than a customer of the digital
commodity exchange; or
``(ii) for any other person, including any
depository, other digital commodity exchange,
or digital asset custodian that has received
any customer money, assets, or property for
deposit, to hold, dispose of, or use any such
money, assets, or property, or property, as
belonging to the depositing digital commodity
exchange or any person other than the customers
of the digital commodity exchange.
``(B) Use further defined.--For purposes of this
section, `use' of a digital commodity includes
utilizing any unit of a digital asset to participate in
a blockchain service defined in paragraph (6) or a
decentralized governance system associated with the
digital commodity or the blockchain system to which the
digital commodity relates in any manner other than that
expressly directed by the customer from whom the unit
of a digital commodity was received.
``(6) Participation in blockchain services.--
``(A) Use of funds.--A digital commodity exchange
(or a designee of a digital commodity exchange) may use
a unit of a digital commodity belonging to a customer
to provide a blockchain service for a blockchain system
to which the unit of the digital commodity relates if--
``(i) the customer expressly permits the
use, in writing to the digital commodity
exchange; and
``(ii) the digital commodity exchange
complies with subparagraph (B).
``(B) Limitations.--
``(i) In general.--The Commission shall, by
rule, establish notice and disclosure
requirements, and may, by rule, establish any
other limitations and rules related to a
permission provided under subparagraph (A) that
are reasonably necessary to protect customers,
including eligible contract participants, non-
eligible contract participants, or any other
class of customers.
``(ii) Customer choice.--A digital
commodity exchange may not require a customer
to provide the permission referred to in
subparagraph (A) as a condition of doing
business on the exchange.
``(C) Requirements.--The Commission may, by rule,
waive or modify the requirements of paragraph (2) or
subsection (h), to facilitate the use of a unit of a
digital commodity belonging to a customer to provide a
blockchain service.
``(D) Blockchain service defined.--In this
paragraph, the term `blockchain service' means any
activity relating to validating transactions on a
blockchain system, providing security for a blockchain
system, or other similar activity, including protocol
consensus participation activities described in section
2(a)(30)(B) of the Securities Act of 1933, required for
the ongoing operation of a blockchain system.
``(e) Market Access Requirements.--The Commission may, by rule,
impose any additional requirements related to the operations and
activities of the digital commodity exchange and an affiliated digital
commodity broker necessary to protect market participants, promote fair
and equitable trading on the digital commodity exchange, and promote
responsible innovation.
``(f) Designation of Chief Compliance Officer.--
``(1) In general.--A digital commodity exchange shall
designate an individual to serve as a chief compliance officer.
``(2) Duties.--The chief compliance officer shall--
``(A) report directly to the board or to the senior
officer of the exchange;
``(B) review compliance with the core principles in
this subsection;
``(C) in consultation with the board of the
exchange, a body performing a function similar to that
of a board, or the senior officer of the exchange,
resolve any conflicts of interest that may arise;
``(D) establish and administer the policies and
procedures required to be established pursuant to this
section;
``(E) ensure compliance with this Act and the rules
and regulations issued under this Act, including rules
prescribed by the Commission pursuant to this section;
and
``(F) establish procedures for the remediation of
noncompliance issues found during compliance office
reviews, look backs, internal or external audit
findings, self-reported errors, or through validated
complaints.
``(3) Requirements for procedures.--In establishing
procedures under paragraph (2)(F), the chief compliance officer
shall design the procedures to establish the handling,
management response, remediation, retesting, and closing of
noncompliance issues.
``(4) Annual reports.--
``(A) In general.--In accordance with rules
prescribed by the Commission, the chief compliance
officer shall annually prepare and sign a report that
contains a description of--
``(i) the compliance of the digital
commodity exchange with this Act; and
``(ii) the policies and procedures,
including the code of ethics and conflicts of
interest policies, of the digital commodity
exchange.
``(B) Requirements.--The chief compliance officer
shall--
``(i) submit each report described in
subparagraph (A) with the appropriate financial
report of the digital commodity exchange that
is required to be submitted to the Commission
pursuant to this section; and
``(ii) include in the report a
certification that, under penalty of law, the
report is accurate and complete.
``(g) Appointment of Trustee.--
``(1) In general.--If a proceeding under section 5e results
in the suspension or revocation of the registration of a
digital commodity exchange, or if a digital commodity exchange
withdraws from registration, the Commission, on notice to the
digital commodity exchange, may apply to the appropriate United
States district court where the digital commodity exchange is
located for the appointment of a trustee.
``(2) Assumption of jurisdiction.--If the Commission
applies for appointment of a trustee under paragraph (1)--
``(A) the court may take exclusive jurisdiction
over the digital commodity exchange and the records and
assets of the digital commodity exchange, wherever
located; and
``(B) if the court takes jurisdiction under
subparagraph (A), the court shall appoint the
Commission, or a person designated by the Commission,
as trustee with power to take possession and continue
to operate or terminate the operations of the digital
commodity exchange in an orderly manner for the
protection of customers subject to such terms and
conditions as the court may prescribe.
``(h) Qualified Digital Asset Custodian.--A digital commodity
exchange shall hold in a qualified digital asset custodian each unit of
a digital asset that is--
``(1) the property of a customer of the digital commodity
exchange;
``(2) required to be held by the digital commodity exchange
under subsection (c)(12) of this section; or
``(3) otherwise so required by the Commission to reasonably
protect customers.
``(i) Exemptions.--
``(1) In general.--In order to promote responsible
innovation and fair competition, or protect customers, the
Commission may (on its own initiative or on application of the
digital commodity exchange) exempt, either unconditionally or
on stated terms or conditions or for stated periods and either
retroactively or prospectively, or both, a digital commodity
exchange from the requirements of this Act, if the Commission
determines that--
``(A) the exemption would be consistent with the
public interest and the purposes of this Act; and
``(B) the exemption will not have a material
adverse effect on the ability of the Commission or the
digital commodity exchange to discharge regulatory or
self-regulatory duties under this Act.
``(2) Foreign exchanges.--The Commission may exempt,
conditionally or unconditionally, a digital commodity exchange
from registration under this section if the Commission finds
that the digital commodity exchange is subject to comparable,
comprehensive supervision and regulation on a consolidated
basis by the appropriate governmental authorities in the home
country of the facility.
``(j) Customer Defined.--In this section, the term `customer' means
any person that maintains an account for the trading of digital
commodities directly with a digital commodity exchange (other than a
person that is owned or controlled, directly or indirectly, by the
digital commodity exchange) for its own behalf or on behalf of any
other person.
``(k) Federal Preemption.--Notwithstanding any other provision of
law, the Commission shall have exclusive jurisdiction over any digital
commodity exchange registered under this section with respect to
activities and transactions subject to this Act.''.
SEC. 405. QUALIFIED DIGITAL ASSET CUSTODIANS.
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended by the
preceding provisions of this Act, is amended by inserting after section
5i the following:
``SEC. 5J. QUALIFIED DIGITAL ASSET CUSTODIANS.
``(a) In General.--A person is a qualified digital asset custodian
for purposes of this Act if the person--
``(1) holds digital assets on behalf of a person registered
under this Act or a customer of a person registered under this
Act; and
``(2) is in compliance with subsections (b) and (c).
``(b) Supervision Requirement.--A person is in compliance with this
subsection if the person is subject to--
``(1) supervision and examination for custody and
safekeeping of digital assets by an appropriate Federal banking
agency, the National Credit Union Administration, the
Commission, or the Securities and Exchange Commission; or
``(2) adequate supervision and appropriate regulation for
custody and safekeeping of digital assets by--
``(A) a State bank supervisor (within the meaning
of section 3 of the Federal Deposit Insurance Act);
``(B) a State officer, agency, or other entity
which has primary regulatory authority over
nondepository State trust companies;
``(C) a State credit union supervisor, as defined
under section 6003 of the Anti-Money Laundering Act of
2020; or
``(D) an appropriate foreign governmental authority
in the home country of such person.
``(c) Other Requirements.--A person shall be in compliance with
this subsection if:
``(1) Not otherwise prohibited.--The person has not been
prohibited by its supervisor from engaging in an activity with
respect to the custody and safekeeping of digital assets.
``(2) Information sharing.--
``(A) In general.--The person shares information
with the Commission on request and complies with such
requirements for periodic sharing of information
regarding customer accounts that the person holds on
behalf of an entity registered with the Commission as
the Commission determines by rule are reasonably
necessary to effectuate any of the provisions, or to
accomplish any of the purposes, of this Act.
``(B) Provision of information.--If the person is
subject to regulation and examination by an appropriate
Federal banking agency, the person may satisfy any
information request described in subparagraph (A) by
providing the Commission with a detailed listing, in
writing, of the digital assets of a customer in the
custody of, or use by, the person.
``(3) Rulemaking for cftc entities.--
``(A) In general.--The Commission shall prescribe
rules to permit a person registered with the Commission
to be a qualified digital asset custodian in compliance
with this section.
``(B) Content.--In prescribing the rules under
subparagraph (A), the Commission shall require a person
registered with the Commission to--
``(i) implement requirement consistent with
the requirements in subsection (d)(1);
``(ii) establish sufficient system
safeguards;
``(iii) prevent or mitigate conflicts of
interest, as appropriate; and
``(iv) establish separate governance
arrangements for the custodial function of the
entity.
``(d) Adequate Supervision and Appropriate Regulation.--
``(1) In general.--For purposes of subsection (b), the
terms `adequate supervision' and `appropriate regulation' mean
such minimum standards for supervision and regulation as are
reasonably necessary to protect the digital assets held by a
person registered under this Act, including standards relating
to the licensing, examination, and supervisory processes that
require the person to, at a minimum--
``(A) receive a review and evaluation of ownership,
character and fitness, conflicts of interest, business
model, financial statements, funding resources, and
policies and procedures of the person;
``(B) hold capital sufficient for the financial
integrity of the person;
``(C) protect customer assets;
``(D) establish and maintain books and records
regarding the business of the person;
``(E) submit financial statements and audited
financial statements to the applicable supervisor
described in subsection (b);
``(F) provide disclosures to the applicable
supervisor described in subsection (b) regarding
actions, proceedings, and other items as determined by
the supervisor;
``(G) maintain and enforce policies and procedures
for compliance with applicable State and Federal laws,
including those related to anti-money laundering and
cybersecurity;
``(H) establish a business continuity plan to
ensure functionality in cases of disruption; and
``(I) establish policies and procedures to resolve
complaints.
``(2) Rulemaking with respect to definitions.--
``(A) In general.--For purposes of this section,
the Commission may, by rule, further define the terms
`adequate supervision' and `appropriate regulation' as
necessary and appropriate for the protection of
customers, and consistent with the purposes of this
Act.
``(B) Existing digital asset custodians.--A trust
company operating as a digital asset custodian before
the effective date of a rulemaking under subparagraph
(A) is deemed subject to adequate supervision and
appropriate regulation if--
``(i) the trust company is expressly
permitted by a State bank supervisor to engage
in the custody and safekeeping of digital
assets;
``(ii) the State bank supervisor has
established licensing, examination, and
supervisory processes that require the trust
company to, at a minimum, meet the conditions
described in subparagraphs (A) through (I) of
paragraph (1); and
``(iii) the trust company is in good
standing with its State bank supervisor.
``(C) Transition period for certain custodians.--In
implementing the rulemaking under subparagraph (A), the
Commission shall provide a transition period of not
less than 2 years for any trust company that is deemed
subject to adequate supervision and appropriate
regulation under subparagraph (B) on the effective date
of the rulemaking.
``(e) Authority to Temporarily Suspend Standards.--The Commission
may, by rule or order, temporarily suspend, in whole or in part, any
requirement imposed under, or any standard referred to in, this
section, or any requirement to utilize a qualified digital asset
custodian, if the Commission determines that the suspension would be
consistent with the public interest and the purposes of this Act.''.
SEC. 406. REGISTRATION AND REGULATION OF DIGITAL COMMODITY BROKERS AND
DEALERS.
The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended by
inserting after section 4t the following:
``SEC. 4U. REGISTRATION AND REGULATION OF DIGITAL COMMODITY BROKERS AND
DEALERS.
``(a) Registration.--
``(1) Requirement.--It shall be unlawful for any person to
act as a digital commodity broker or digital commodity dealer
unless the person is registered as such with the Commission.
``(2) Additional registration.--
``(A) Rules.--In order to foster the development of
fair and orderly markets, protect customers, and
promote responsible innovation, the Commission--
``(i) shall prescribe rules to exempt an
entity registered with the Commission under
more than 1 section of this Act from
duplicative, conflicting, or unduly burdensome
provisions of this Act and the rules under this
Act;
``(ii) shall prescribe rules to address
conflicts of interests and the activities of
the entity; and
``(iii) may after an analysis of the risks
and benefits, prescribe rules to provide for
portfolio margining.
``(B) With membership in a registered futures
association.--Any person required to be registered as a
digital commodity broker or digital commodity dealer
under this section shall become and remain a member of
a registered futures association.
``(b) Requirements.--
``(1) In general.--A person shall register as a digital
commodity broker or digital commodity dealer by filing a
registration application with the Commission.
``(2) Contents.--
``(A) In general.--The application shall be made in
such form and manner as is prescribed by the
Commission, and shall contain such information as the
Commission considers necessary concerning the business
in which the applicant is or will be engaged.
``(B) Continual reporting.--A person that is
registered as a digital commodity broker or digital
commodity dealer shall continue to submit to the
Commission reports that contain such information
pertaining to the business of the person as the
Commission may require.
``(3) Statutory disqualification.--Except to the extent
otherwise specifically provided by rule, regulation, or order,
it shall be unlawful for a digital commodity broker or digital
commodity dealer to permit any person who is associated with a
digital commodity broker or a digital commodity dealer and who
is subject to a statutory disqualification to effect or be
involved in effecting a contract of sale of a digital commodity
on behalf of the digital commodity broker or the digital
commodity dealer, respectively, if the digital commodity broker
or digital commodity dealer, respectively, knew, or in the
exercise of reasonable care should have known, of the statutory
disqualification.
``(c) Rulemaking.--
``(1) In general.--The Commission shall prescribe such
rules applicable to registered digital commodity brokers and
registered digital commodity dealers as are appropriate to
carry out this section, including rules in the public interest
that limit the activities of digital commodity brokers and
digital commodity dealers.
``(2) Financing agreements.--
``(A) In general.--The Commission shall prescribe
rules and regulations applicable to digital commodity
brokers or digital commodity dealers which shall set
forth minimum requirements related to disclosure,
recordkeeping, margin financing arrangements,
rehypothecation, capital, reporting, business conduct,
documentation, and supervision of employees and agents,
in connection with--
``(i) an agreement described in section
2(c)(2)(D)(iv); or
``(ii) any other margined, leveraged, or
financing arrangement for the purchase or sale
of a digital commodity with an eligible
contract participant.
``(B) Specific authority.--Except as prohibited in
section 2(c)(2)(G)(iii), the Commission may also make,
promulgate, and enforce such rules and regulations as,
in the judgment of the Commission, are reasonably
necessary to effectuate any of the provisions of, or to
accomplish any of the purposes of, this Act in
connection with an agreement referred to in
subparagraph (A) of this paragraph.
``(d) Capital Requirements.--
``(1) In general.--Each digital commodity broker and
digital commodity dealer shall meet such minimum capital
requirements as the Commission may prescribe to address the
risks associated with digital commodity trading and to ensure
that the digital commodity broker or digital commodity dealer,
respectively, is able, at all times, to--
``(A) meet, and continue to meet the obligations of
such a registrant; and
``(B) fulfill obligations to customers or
counterparties for any margined, leveraged, or financed
transactions.
``(2) Futures commission merchants and other dealers.--Each
futures commission merchant, introducing broker, digital
commodity broker, digital commodity dealer, broker, and dealer
shall maintain sufficient capital to comply with the stricter
of any applicable capital requirements to which the futures
commission merchant, introducing broker, digital commodity
broker, digital commodity dealer, broker, or dealer,
respectively, is subject under this Act or the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.).
``(e) Reporting and Recordkeeping.--Each digital commodity broker
and digital commodity dealer--
``(1) shall make such reports as are required by the
Commission by rule or regulation regarding the transactions,
positions, and financial condition of the digital commodity
broker or digital commodity dealer, respectively;
``(2) shall keep books and records in such form and manner
and for such period as may be prescribed by the Commission by
rule or regulation; and
``(3) shall keep the books and records open to inspection
and examination by any representative of the Commission.
``(f) Daily Trading Records.--
``(1) In general.--Each digital commodity broker and
digital commodity dealer shall maintain daily trading records
of the transactions of the digital commodity broker or digital
commodity dealer, respectively, and all related records
(including related forward or derivatives transactions) and
recorded communications, including electronic mail, instant
messages, and recordings of telephone calls, for such period as
the Commission may require by rule or regulation.
``(2) Information requirements.--The daily trading records
shall include such information as the Commission shall require
by rule or regulation.
``(3) Counterparty records.--Each digital commodity broker
and digital commodity dealer shall maintain daily trading
records for each customer or counterparty in a manner and form
that is identifiable with each digital commodity transaction.
``(4) Audit trail.--Each digital commodity broker and
digital commodity dealer shall maintain a complete audit trail
for conducting comprehensive and accurate trade
reconstructions.
``(g) Business Conduct Standards.--
``(1) In general.--Each digital commodity broker and
digital commodity dealer shall conform with such business
conduct standards as the Commission, by rule or regulation,
prescribes related to--
``(A) fraud, manipulation, and other abusive
practices involving spot or margined, leveraged, or
financed digital commodity transactions (including
transactions that are offered but not entered into);
``(B) diligent supervision of the business of the
registered digital commodity broker or digital
commodity dealer, respectively; and
``(C) such other matters as the Commission deems
appropriate.
``(2) Business conduct requirements.--The Commission shall,
by rule, prescribe business conduct requirements which--
``(A) require disclosure by a registered digital
commodity broker and registered digital commodity
dealer to any counterparty to the transaction (other
than an eligible contract participant) of--
``(i) information about the material risks
and characteristics of the digital commodity;
and
``(ii) information about the material risks
and characteristics of the transaction;
``(B) establish a duty for such a digital commodity
broker and such a digital commodity dealer to
communicate in a fair and balanced manner based on
principles of fair dealing and good faith;
``(C) establish standards governing digital
commodity broker and digital commodity dealer marketing
and advertising, including testimonials and
endorsements; and
``(D) establish such other standards and
requirements as the Commission may determine are
appropriate for the protection of customers.
``(3) Prohibition on fraudulent practices.--It shall be
unlawful for a digital commodity broker or digital commodity
dealer to--
``(A) employ any device, scheme, or artifice to
defraud any customer or counterparty;
``(B) engage in any transaction, practice, or
course of business that operates as a fraud or deceit
on any customer or counterparty; or
``(C) engage in any act, practice, or course of
business that is fraudulent, deceptive, or
manipulative.
``(h) Duties.--
``(1) Risk management procedures.--Each digital commodity
broker and digital commodity dealer shall establish robust and
professional risk management systems adequate for managing the
day-to-day business of the digital commodity broker or digital
commodity dealer, respectively.
``(2) Disclosure of general information.--Each digital
commodity broker and digital commodity dealer shall disclose to
the Commission information concerning--
``(A) the terms and conditions of the transactions
of the digital commodity broker or digital commodity
dealer, respectively;
``(B) the trading operations, mechanisms, and
practices of the digital commodity broker or digital
commodity dealer, respectively;
``(C) financial integrity protections relating to
the activities of the digital commodity broker or
digital commodity dealer, respectively; and
``(D) other information relevant to trading in
digital commodities by the digital commodity broker or
digital commodity dealer, respectively.
``(3) Ability to obtain information.--Each digital
commodity broker and digital commodity dealer shall--
``(A) establish and enforce internal systems and
procedures to obtain any necessary information to
perform any of the functions described in this section;
and
``(B) provide the information to the Commission, on
request.
``(4) Conflicts of interest.--Each digital commodity broker
and digital commodity dealer shall establish, maintain, and
enforce written policies and procedures reasonably designed,
taking into consideration the nature of the business of the
person, to mitigate any conflicts of interest in transactions
or arrangements with affiliates.
``(5) Antitrust considerations.--Unless necessary or
appropriate to achieve the purposes of this Act, a digital
commodity broker or digital commodity dealer shall not--
``(A) adopt any process or take any action that
results in any unreasonable restraint of trade; or
``(B) impose any material anticompetitive burden on
trading or clearing.
``(i) Designation of Chief Compliance Officer.--
``(1) In general.--Each digital commodity broker and
digital commodity dealer shall designate an individual to serve
as a chief compliance officer.
``(2) Duties.--The chief compliance officer shall--
``(A) report directly to the board or to the senior
officer of the registered digital commodity broker or
registered digital commodity dealer;
``(B) review the compliance of the registered
digital commodity broker or registered digital
commodity dealer with respect to the registered digital
commodity broker and registered digital commodity
dealer requirements described in this section;
``(C) in consultation with the board of directors,
a body performing a function similar to the board, or
the senior officer of the organization, resolve any
conflicts of interest that may arise;
``(D) be responsible for administering each policy
and procedure that is required to be established
pursuant to this section;
``(E) ensure compliance with this Act (including
regulations), including each rule prescribed by the
Commission under this section;
``(F) establish procedures for the remediation of
noncompliance issues identified by the chief compliance
officer through any--
``(i) compliance office review;
``(ii) look-back;
``(iii) internal or external audit finding;
``(iv) self-reported error; or
``(v) validated complaint; and
``(G) establish and follow appropriate procedures
for the handling, management response, remediation,
retesting, and closing of noncompliance issues.
``(3) Annual reports.--
``(A) In general.--In accordance with rules
prescribed by the Commission, the chief compliance
officer shall annually prepare and sign a report that
contains a description of--
``(i) the compliance of the registered
digital commodity broker or registered digital
commodity dealer with this Act (including
regulations); and
``(ii) each policy and procedure of the
registered digital commodity broker or
registered digital commodity dealer followed by
the chief compliance officer (including the
code of ethics and conflict of interest
policies).
``(B) Requirements.--The chief compliance officer
shall ensure that a compliance report under
subparagraph (A)--
``(i) accompanies each appropriate
financial report of the registered digital
commodity broker or registered digital
commodity dealer that is required to be
furnished to the Commission pursuant to this
section; and
``(ii) includes a certification that, under
penalty of law, the compliance report is
accurate and complete.
``(j) Segregation of Digital Commodities.--
``(1) Holding of customer assets.--
``(A) In general.--Each digital commodity broker
and digital commodity dealer shall hold customer money,
assets, and property in a manner to minimize the risk
of loss to the customer or unreasonable delay in
customer access to the money, assets, and property of
the customer.
``(B) Qualified digital asset custodian.--Each
digital commodity broker and digital commodity dealer
shall hold in a qualified digital asset custodian each
unit of a digital asset that is--
``(i) the property of a customer or
counterparty of the digital commodity broker or
digital commodity dealer, respectively;
``(ii) required to be held by the digital
commodity broker or digital commodity dealer
under subsection (e); or
``(iii) otherwise so required by the
Commission to reasonably protect customers or
promote the public interest.
``(2) Segregation of funds.--
``(A) In general.--Each digital commodity broker
and digital commodity dealer shall treat and deal with
all money, assets, and property that is received by the
digital commodity broker or digital commodity dealer,
or accrues to a customer as the result of trading in
digital commodities, as belonging to the customer.
``(B) Commingling prohibited.--
``(i) In general.--Except as provided in
clause (ii), each digital commodity broker and
digital commodity dealer shall separately
account for money, assets, and property of a
digital commodity customer, and shall not
commingle any such money, assets, or property
with the funds of the digital commodity broker
or digital commodity dealer, respectively, or
use any such money, assets, or property to
margin, secure, or guarantee any trades or
accounts of any customer or person other than
the person for whom the money, assets, or
property are held.
``(ii) Exceptions.--
``(I) Use of funds.--
``(aa) In general.--A
digital commodity broker or
digital commodity dealer may,
for convenience, commingle and
deposit in the same account or
accounts with any bank, trust
company, derivatives clearing
organization, or qualified
digital asset custodian money,
assets, and property of
customers.
``(bb) Withdrawal.--The
share of the money, assets, and
property described in item (aa)
as in the normal course of
business shall be necessary to
margin, guarantee, secure,
transfer, adjust, or settle a
contract of sale of a digital
commodity with a registered
entity may be withdrawn and
applied to such purposes,
including the payment of
commissions, brokerage,
interest, taxes, storage, and
other charges, lawfully
accruing in connection with the
contract.
``(II) Commission action.--In
accordance with such terms and
conditions as the Commission may
prescribe by rule, regulation, or
order, any money, assets, or property
of the customers of a digital commodity
broker or digital commodity dealer may
be commingled and deposited in customer
accounts with any other money, assets,
or property received by the digital
commodity broker or digital commodity
dealer, respectively, and required by
the Commission to be separately
accounted for and treated and dealt
with as belonging to the customer of
the digital commodity broker or digital
commodity dealer, respectively.
``(3) Permitted investments.--Money described in paragraph
(2) may be invested in obligations of the United States, in
general obligations of any State or of any political
subdivision of a State, in obligations fully guaranteed as to
principal and interest by the United States, or in any other
investment that the Commission may by rule or regulation allow.
``(4) Customer protection during bankruptcy.--
``(A) Customer property.--All money, assets, or
property described in paragraph (2) shall be considered
customer property for purposes of section 761 of title
11, United States Code.
``(B) Transactions.--A transaction involving a unit
of a digital commodity occurring with a digital
commodity broker or digital commodity dealer shall be
considered a contract for the purchase or sale of a
commodity for future delivery, on or subject to the
rules of, a contract market or board of trade for
purposes of the definition of a `commodity contract' in
section 761 of title 11, United States Code.
``(C) Brokers and dealers.--A digital commodity
broker and a digital commodity dealer shall be
considered a futures commission merchant for purposes
of section 761 of title 11, United States Code.
``(D) Assets removed from segregation.--Assets
removed from segregation due to a customer election
under paragraph (6) shall not be considered customer
property for purposes of section 761 of title 11,
United States Code.
``(5) Misuse of customer property.--
``(A) In general.--It shall be unlawful--
``(i) for any digital commodity broker or
digital commodity dealer that has received any
customer money, assets, or property for custody
to dispose of, or use any such money, assets,
or property as belonging to the digital
commodity broker or digital commodity dealer,
respectively, or any person other than a
customer of the digital commodity broker or
digital commodity dealer, respectively; or
``(ii) for any other person, including any
depository, digital commodity exchange, other
digital commodity broker, other digital
commodity dealer, or digital commodity
custodian that has received any customer money,
assets, or property for deposit, to hold,
dispose of, or use any such money, assets, or
property, as belonging to the depositing
digital commodity broker or digital commodity
dealer or any person other than the customers
of the digital commodity broker or digital
commodity dealer, respectively.
``(B) Use further defined.--For purposes of this
section, `use' of a digital commodity includes
utilizing any unit of a digital asset to participate in
a blockchain service defined in paragraph (6) or a
decentralized governance system associated with the
digital commodity or the blockchain system to which the
digital commodity relates in any manner other than that
expressly directed by the customer from whom the unit
of a digital commodity was received.
``(6) Participation in blockchain services.--
``(A) Use of funds.--A digital commodity broker or
digital commodity dealer (or a designee of a digital
commodity broker or a digital commodity dealer) may use
a unit of a digital commodity belonging to a customer
to provide a blockchain service for a blockchain system
to which the unit of the digital commodity relates if--
``(i) the customer expressly permits the
use, in writing to the digital commodity broker
or digital commodity dealer, as the case may
be; and
``(ii) the digital commodity broker or the
digital commodity dealer, as the case may be,
complies with subparagraph (B).
``(B) Limitations.--
``(i) In general.--The Commission shall, by
rule, establish notice and disclosure
requirements, and may, by rule, establish any
other limitations and rules related to a
permission provided under subparagraph (A) that
are reasonably necessary to protect customers,
including eligible contract participants, non-
eligible contract participants, or any other
class of customers.
``(ii) Customer choice.--A digital
commodity broker or digital commodity dealer
may not require a customer to provide the
permission referred to in subparagraph (A) as a
condition of doing business with the broker or
dealer.
``(C) Requirements.--The Commission may, by rule,
waive or modify the requirements of paragraph (2) or
subsection (h), to facilitate the use of a unit of a
digital commodity belonging to a customer to provide a
blockchain service.
``(D) Blockchain service defined.--In this
paragraph, the term `blockchain service' means any
activity relating to validating transactions on a
blockchain system, providing security for a blockchain
system, or other similar activity, including protocol
consensus participation activities described in section
2(a)(30)(B) of the Securities Act of 1933, required for
the ongoing operation of a blockchain system.
``(k) Federal Preemption.--Notwithstanding any other provision of
law, the Commission shall have exclusive jurisdiction over any digital
commodity broker or digital commodity dealer registered under this
section with respect to activities subject to this Act.
``(l) Exemptions.--In order to promote responsible innovation and
fair competition, or protect customers, the Commission may (on its own
initiative or on application of the digital commodity broker or digital
commodity dealer) exempt, unconditionally or on stated terms or
conditions, or for stated periods, and retroactively or prospectively,
or both, a digital commodity broker or digital commodity dealer from
the requirements of this Act, if the Commission determines that--
``(1)(A) the exemption would be consistent with the public
interest and the purposes of this Act; and
``(B) the exemption will not have a material adverse effect
on the ability of the Commission to discharge regulatory duties
under this Act; or
``(2) the digital commodity broker or digital commodity
dealer is subject to comparable, comprehensive supervision and
regulation by the appropriate government authorities in the
home country of the digital commodity broker or digital
commodity dealer, respectively.''.
SEC. 407. REGISTRATION OF ASSOCIATED PERSONS.
(a) In General.--Section 4k of the Commodity Exchange Act (7 U.S.C.
6k) is amended--
(1) by redesignating subsections (4) through (6) as
subsections (5) through (7), respectively;
(2) by inserting after subsection (3) the following:
``(4) It shall be unlawful for any person to act as an associated
person of a digital commodity broker or an associated person of a
digital commodity dealer unless the person is registered with the
Commission under this Act and such registration shall not have expired,
been suspended (and the period of suspension has not expired), or been
revoked. It shall be unlawful for a digital commodity broker or a
digital commodity dealer to permit such a person to become or remain
associated with the digital commodity broker or digital commodity
dealer if the digital commodity broker or digital commodity dealer knew
or should have known that the person was not so registered or that the
registration had expired, been suspended (and the period of suspension
has not expired), or been revoked.''; and
(3) in subsection (5) (as so redesignated), by striking
``or of a commodity trading advisor'' and inserting ``of a
commodity trading advisor, of a digital commodity broker, or of
a digital commodity dealer''.
(b) Conforming Amendments.--The Commodity Exchange Act (7 U.S.C. 1a
et seq.) is amended by striking ``section 4k(6)'' each place it appears
and inserting ``section 4k(7)''.
SEC. 408. REGISTRATION OF COMMODITY POOL OPERATORS AND COMMODITY
TRADING ADVISORS.
(a) In General.--Section 4m(3) of the Commodity Exchange Act (7
U.S.C. 6m(3)) is amended--
(1) in subparagraph (A)--
(A) by striking ``any commodity trading advisor''
and inserting ``a commodity pool operator or commodity
trading advisor''; and
(B) by striking ``acting as a commodity trading
advisor'' and inserting ``acting as a commodity pool
operator or commodity trading advisor''; and
(2) in subparagraph (C), by inserting ``digital
commodities,'' after ``physical commodities,''.
(b) Exemptive Authority.--Section 4m of such Act (7 U.S.C. 6m) is
amended by adding at the end the following:
``(4) Exemptive Authority.--The Commission shall promulgate rules
to provide appropriate exemptions for commodity pool operators and
commodity trading advisors, to provide relief from duplicative,
conflicting, or unduly burdensome requirements or to promote
responsible innovation, to the extent the exemptions foster the
development of fair and orderly cash or spot digital commodity markets,
are necessary or appropriate in the public interest, and are consistent
with the protection of customers.''.
SEC. 409. EXCLUSION FOR DECENTRALIZED FINANCE ACTIVITIES.
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended by the
preceding provisions of this Act, is amended by inserting after section
4u the following:
``SEC. 4V. DECENTRALIZED FINANCE ACTIVITIES NOT SUBJECT TO THIS ACT.
``(a) In General.--Notwithstanding any other provision of this Act,
a person shall not be subject to this Act and the regulations
promulgated under this Act based on the person directly or indirectly
engaging in any of the following activities, whether singly or in
combination, in relation to the operation of a blockchain system or in
relation to decentralized finance trading protocol:
``(1) Compiling network transactions or relaying,
searching, sequencing, validating, or acting in a similar
capacity.
``(2) Providing computational work, operating a node or
oracle service, or procuring, offering, or utilizing network
bandwidth, or other similar incidental services.
``(3) Providing a user-interface that enables a user to
read, and access data about a blockchain system.
``(4) Developing, publishing, or otherwise distributing a
blockchain system or a decentralized finance messaging system.
``(5) Constituting, administering, or maintaining a
decentralized finance messaging system or decentralized finance
trading protocol, or operating or participating in a liquidity
pool with respect thereto, for the purpose of executing a spot
transaction for the purchase or sale of a digital commodity.
``(6) Developing, publishing, constituting, administering,
maintaining, or otherwise distributing software or systems that
create or deploy hardware or software, including wallets or
other systems, facilitating an individual user's own personal
ability to keep, safeguard, or custody the user's digital
assets or related private keys.
``(b) Exceptions.--Subsection (a) shall not be interpreted to apply
to the anti-fraud, anti-manipulation, or false reporting enforcement
authorities of the Commission.''.
SEC. 410. RESOURCES FOR IMPLEMENTATION AND ENFORCEMENT.
(a) Collection of Fees.--
(1) In general.--The Commodity Futures Trading Commission
(in this section referred to as the ``Commission'') shall
charge and collect a fee from each person in provisional status
registered with the Commission pursuant to section 106, on--
(A) the filing of the initial application for
registration; and
(B) an annual basis thereafter for maintaining
provisional status.
(2) Amount.--The fees authorized under paragraph (1) may be
collected and available for obligation only in the amounts
provided in advance in an appropriation Act.
(3) Authority to adjust fees.--Notwithstanding the
preceding provisions of this subsection, to promote fair
competition or innovation, the Commission, in its sole
discretion, may reduce or eliminate any fee otherwise required
to be paid by a small or medium filer under this subsection.
(b) Fee Schedule.--
(1) In general.--The Commission shall publish in the
Federal Register a schedule of the fees to be charged and
collected under this section.
(2) Content.--The fee schedule for a fiscal year shall
include a written analysis of the estimate of the Commission of
the total costs of carrying out the functions of the Commission
under this Act during the fiscal year.
(3) Submission to congress.--Before publishing the fee
schedule for a fiscal year, the Commission shall submit a copy
of the fee schedule to the Committees on Agriculture and on
Appropriations of the House of Representatives and the
Committees on Agriculture, Nutrition, and Forestry and on
Appropriations of the Senate.
(4) Timing.--
(A) 1st fiscal year.--The Commission shall publish
the fee schedule for the fiscal year in which this Act
is enacted, within 30 days after the date of the
enactment of this Act.
(B) Subsequent fiscal years.--The Commission shall
publish the fee schedule for each subsequent fiscal
year, not less than 90 days before the due date
prescribed by the Commission for payment of the annual
fee for the fiscal year.
(c) Late Payment Penalty.--
(1) In general.--The Commission may impose a penalty
against a person that fails to pay an annual fee charged under
this section, within 30 days after the due date prescribed by
the Commission for payment of the fee.
(2) Amount.--The amount of the penalty shall be--
(A) 5 percent of the amount of the fee due,
multiplied by
(B) the whole number of consecutive 30-day periods
that have elapsed since the due date.
(d) Reimbursement of Excess Fees.--To the extent that the total
amount of fees collected under this section during a fiscal year that
begins after the date of the enactment of this Act exceeds the amount
provided under subsection (a)(2) with respect to the fiscal year, the
Commission shall reimburse the excess amount to the persons who have
timely paid their annual fees, on a pro-rata basis that excludes
penalties, and shall do so within 60 days after the end of the fiscal
year.
(e) Deposit of Fees Into the Treasury.--All amounts collected under
this section shall be credited to the currently applicable
appropriation, account, or fund of the Commission as discretionary
offsetting collections, and shall be available for the purposes
authorized in subsection (f) only to the extent and in the amounts
provided in advance in appropriations Acts.
(f) Authorization of Appropriations.--In addition to amounts
otherwise authorized to be appropriated to the Commission, there is
authorized to be appropriated to the Commission amounts collected under
this section to cover the costs of carrying out the functions of the
Commission under this Act.
(g) Expedited Hiring Authority.--
(1) Appointment authority.--The Chairman, pursuant to
section 6(a), may appoint individuals to a position described
in paragraph (2) of this subsection--
(A) in accordance with the statutes, rules, and
regulations governing appointments to positions in the
excepted service (as defined in section 2103 of title
5, United States Code); and
(B) without regard to any statute, rule, or
regulation governing appointments to positions in the
competitive service (as defined in section 2102 of such
title).
(2) Position described.--A position referred to in
subparagraph (1) is a position at the Commission that--
(A) is in the competitive service (as defined in
section 2102 of such title); and
(B) requires specialized knowledge of digital
commodities markets, financial and capital market
formation or regulation, financial market structures or
surveillance, data collection or analysis, or
information technology, cybersecurity, or system
safeguards.
(3) Rule of construction.--The appointment of a candidate
to a position under this subsection shall not be considered to
cause the position to be converted from the competitive service
to the excepted service.
(h) Sunset.--The authorities provided by this section shall expire
at the end of the 4th fiscal year that begins after the date of the
enactment of this Act.
SEC. 411. REQUIREMENTS RELATED TO CONTROL PERSONS.
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended the
preceding provisions of this Act, is amended by inserting after section
4v the following:
``SEC. 4W. LIMITATION ON TRANSACTIONS BY BLOCKCHAIN CONTROL PERSONS.
``(a) Limitation.--It shall be unlawful for a blockchain control
person with respect to a blockchain system certified as a mature
blockchain system in accordance with section 42 of the Securities
Exchange Act of 1934 to sell a unit of a digital commodity related to
the blockchain system unless the person files notice with the
Commission, in a form and manner determined by the Commission, that the
person has or intends to obtain an authority described in subsection
(b)(1) with respect to the blockchain system, and complies with rules
adopted by the Commission that require--
``(1) disclosure of information to the Commission and the
public about the material activities, as determined by the
Commission, of the blockchain control person; and
``(2)(A) the use of a digital commodity broker to effect
the sale; or
``(B) such other sales restrictions applicable to the
blockchain control person, or any affiliated blockchain control
person, to prevent manipulation and distortion of the value of
the digital commodity and promote further maturity of the
blockchain system to which the digital commodity relates.
``(b) Definitions.--In this section:
``(1) Blockchain control person.--The term `blockchain
control person' means, with respect to a blockchain system, any
person or group of persons under common control, other than a
decentralized governance system, who--
``(A) has the unilateral authority, directly or
indirectly, through any contract, arrangement,
understanding, relationship, or otherwise, to control
or materially alter the functionality, operation, or
rules of consensus or agreement of the blockchain
system or its related digital commodity; or
``(B) has the unilateral authority to direct the
voting, in the aggregate, of 20 percent or more of the
outstanding voting power of the blockchain system by
means of a related digital commodity, nodes or
validators, a decentralized governance system, or
otherwise, in a blockchain system which can be altered
by a voting system.
``(2) Affiliated blockchain control person.--The term
`affiliated blockchain control person' means any person
directly or indirectly controlling, controlled by, or under
common control with a blockchain control person, as the
Commission by rule or regulation, may determine will effectuate
the purposes of this section.''.
SEC. 412. OTHER TRADABLE ASSETS.
The Commodity Exchange Act (7 U.S.C. 1 et seq.), as amended by the
preceding provisions of this Act, is amended--
(1) by inserting after section 4w the following:
``SEC. 4X. TRADING REQUIREMENTS FOR OTHER TRADABLE ASSETS.
``(a) Limitation.--A contract of sale of a tradable asset shall not
be offered, solicited, traded, facilitated, executed, cleared,
reported, or otherwise dealt in, on or subject to the rules of a
registered entity, or by any other entity registered with the
Commission, except in accordance with subsection (b).
``(b) Requirements.--
``(1) Treatment of tradable assets.--A contract of sale of
a tradable asset that is offered, solicited, traded,
facilitated, executed, cleared, reported, or otherwise dealt in
on or subject to the rules of a registered entity, or by any
other entity registered with the Commission, shall be treated
as a digital commodity for purposes of this Act.
``(2) Additional rulemaking authority.--In addition to the
other requirements of this Act, the Commission may, by rule or
regulation, impose additional obligations on any person
registered under this Act offering, soliciting, trading,
facilitating, executing, clearing, reporting, or otherwise
dealing in a contract of sale of a tradable asset, or class
thereof, pursuant to paragraph (1) as are necessary for the
protection of customers, the promotion of innovation, and the
maintenance of fair, orderly, and efficient markets, including
additional obligations related to--
``(A) disclosure;
``(B) recordkeeping;
``(C) capital;
``(D) reporting;
``(E) business conduct;
``(F) documentation;
``(G) supervision of employees; and
``(H) segregation.
``(c) Tradable Asset Defined.--In this section, the term `tradable
asset' means a digital asset other than--
``(1) a digital commodity that is treated as such other
than by reason of subsection (b)(1) of this section; or
``(2) a digital asset excluded from the definition of
digital commodity pursuant to subclause (I) through (VII) of
section 1a(16)(F)(iii).''; and
(2) by inserting after section 6d the following:
``SEC. 6E. PROHIBITION ON TRADING CERTAIN DIGITAL ASSETS.
``(a) In General.--A contract of sale of a digital commodity or
tradable asset (as defined in section 4x) shall not be offered,
solicited, traded, facilitated, executed, cleared, reported, or
otherwise dealt in on or subject to the rules of a registered entity,
or by any other entity registered with the Commission, if the primary
purpose of the digital commodity or tradable asset is to be used to--
``(1) commit fraud or market manipulation;
``(2) further a scheme found in a final action by a court
of competent jurisdiction to be in violation of campaign
finance or government ethics laws; or
``(3) engage in any other conduct that would result in
abusive practices or be disruptive to market integrity.
``(b) Guidance on Fraudulent, Manipulative, or Disruptive Tradable
Assets.--The Commission may, after public notice and comment, issue
guidance establishing criteria for determining if the primary purpose
of a digital commodity or tradable asset (as so defined) is to be used
to commit fraud or market manipulation, or engage in any other conduct
that would result in abusive practices or be disruptive to market
integrity.''.
SEC. 413. CONFLICT OF INTEREST RULEMAKING.
Not later than 360 days after the date of the enactment of this
Act, the Commodity Futures Trading Commission shall issue rules
establishing requirements for the identification, mitigation, and
resolution of conflicts of interest among and across registered
entities (within the meaning of the Commodity Exchange Act) and persons
required to be registered with the Commission, including conflicts of
interest related to vertically integrated market structures and their
varying responsibilities.
SEC. 414. EFFECTIVE DATE.
Unless otherwise provided in this title, this title and the
amendments made by this title shall take effect 270 days after the date
of the enactment of this Act.
SEC. 415. SENSE OF CONGRESS.
It is the sense of Congress that nothing in this Act or any
amendment made by this Act should be interpreted to authorize any
entity to regulate any commodity, other than a digital commodity, on
any spot market.
TITLE V--INNOVATION AND TECHNOLOGY IMPROVEMENTS
SEC. 501. FINDINGS; SENSE OF CONGRESS.
(a) Findings.--Congress finds the following:
(1) Entrepreneurs and innovators are building and deploying
this next generation of the internet.
(2) Digital commodity networks represent a new way for
people to join together and cooperate with one another to
undertake certain activities.
(3) Digital commodities have the potential to be the
foundational building blocks of these systems, aligning the
economic incentive for individuals to cooperate with one
another to achieve a common purpose.
(4) The digital commodity ecosystem has the potential to
grow our economy and improve everyday lives of Americans by
facilitating collaboration through the use of technology to
manage activities, allocate resources, and facilitate decision
making.
(5) Blockchain systems and the digital commodities they
empower provide control, enhance transparency, reduce
transaction costs, and increase efficiency if proper
protections are put in place for investors, consumers, our
financial system, and our national security.
(6) Blockchain technology facilitates new types of network
participation which businesses in the United States may utilize
in innovative ways.
(7) Other digital commodity companies are setting up their
operations outside of the United States, where countries are
establishing frameworks to embrace the potential of blockchain
technology and digital commodities and provide safeguards for
consumers.
(8) Digital commodities, despite the purported anonymity,
provide law enforcement with an exceptional tracing tool to
identify illicit activity and bring criminals to justice.
(9) The Financial Services Committee of the House of
Representatives has held multiple hearings highlighting various
risks that digital commodities can pose to the financial
markets, consumers, and investors that must be addressed as we
seek to harness the benefits of these innovations.
(b) Sense of Congress.--It is the sense of Congress that--
(1) the United States should seek to prioritize
understanding the potential opportunities of the next
generation of the internet;
(2) the United States should seek to foster advances in
technology that have robust evidence indicating they can
improve our financial system and create more fair and equitable
access to financial services for everyday Americans while
protecting our financial system, investors, and consumers;
(3) the United States must support the responsible
development of digital commodities and the underlying
technology in the United States or risk the shifting of the
development of such assets and technology outside of the United
States, to less regulated countries;
(4) Congress should consult with public and private sector
stakeholders to understand how to enact a functional framework
tailored to the specific risks and unique benefits of different
digital commodity-related activities, distributed ledger
technology, distributed networks, and mature blockchain
systems;
(5) Congress should enact a functional framework tailored
to the specific risks of different digital commodity-related
activities and unique benefits of distributed ledger
technology, distributed networks, and mature blockchain
systems; and
(6) consumers and market participants will benefit from a
framework for digital commodities consistent with longstanding
investor protections in securities and commodities markets, yet
tailored to the unique benefits and risks of the digital
commodity ecosystem.
SEC. 502. STRATEGIC HUB FOR INNOVATION AND FINANCIAL TECHNOLOGY.
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is
amended by adding at the end the following:
``(k) Strategic Hub for Innovation and Financial Technology.--
``(1) Establishment.--Not later than 180 days after the
date of the enactment of this subsection, the Securities and
Exchange Commission shall establish a committee to be known as
the Strategic Hub for Innovation and Financial Technology
(referred to in this subsection as the `FinHub') to support
engagement on emerging technologies in the financial sector.
``(2) Members.--The composition of FinHub shall be
determined by the Commission, drawing from relevant divisions
as appropriate, including the Division of Trading and Markets,
Division of Corporate Finance, and Division of Investment
Management.
``(3) Responsibilities.--FinHub shall--
``(A) serve as a resource for the Commission on
emerging financial technology advancements;
``(B) engage with market participants working on
emerging financial technologies; and
``(C) facilitate communication between the
Commission and businesses working in emerging financial
technology fields with information on the Commission,
its rules, and regulations.
``(4) Report to the commission.--
``(A) In general.--Not later than October 31 of
each year after 2025, FinHub shall provide an annual
summary of its engagement activities to the Commission,
which shall be included in the Commission's annual
report to Congress.
``(B) Confidentiality.--Each report submitted under
this paragraph shall not contain confidential
information.''.
SEC. 503. CODIFICATION OF LABCFTC.
(a) In General.--Section 18 of the Commodity Exchange Act (7 U.S.C.
22) is amended by adding at the end the following:
``(c) LabCFTC.--
``(1) Establishment.--There is established in the
Commission LabCFTC.
``(2) Purpose.--The purposes of LabCFTC are to--
``(A) promote responsible financial technology
innovation and fair competition for the benefit of the
American public;
``(B) serve as an information platform to inform
the Commission about new financial technology
innovation; and
``(C) provide outreach to financial technology
innovators to discuss their innovations and the
regulatory framework established by this Act and the
regulations promulgated thereunder.
``(3) Director.--LabCFTC shall have a Director, who shall
be appointed by the Commission and serve at the pleasure of the
Commission. Notwithstanding section 2(a)(6)(A), the Director
shall report directly to the Commission and perform such
functions and duties as the Commission may prescribe.
``(4) Duties.--LabCFTC shall--
``(A) advise the Commission with respect to
rulemakings or other agency or staff action regarding
financial technology;
``(B) provide internal education and training to
the Commission regarding financial technology;
``(C) advise the Commission regarding financial
technology that would bolster the Commission's
oversight functions;
``(D) engage with academia, students, and
professionals on financial technology issues, ideas,
and technology relevant to activities under this Act;
``(E) provide persons working in emerging
technology fields with information on the Commission,
its rules and regulations, and the role of a registered
futures association; and
``(F) encourage persons working in emerging
technology fields to engage with the Commission and
obtain feedback from the Commission on potential
regulatory issues.
``(5) Report to congress.--
``(A) In general.--Not later than October 31 of
each year after 2025, LabCFTC shall submit to the
Committee on Agriculture of the House of
Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate a report on its
activities.
``(B) Contents.--Each report required under
paragraph (1) shall include--
``(i) the total number of persons that met
with LabCFTC;
``(ii) a summary of general issues
discussed during meetings with the person;
``(iii) information on steps LabCFTC has
taken to improve Commission services, including
responsiveness to the concerns of persons;
``(iv) recommendations made to the
Commission with respect to the regulations,
guidance, and orders of the Commission and such
legislative actions as may be appropriate; and
``(v) any other information determined
appropriate by the Director of LabCFTC.
``(C) Confidentiality.--A report under paragraph
(A) shall abide by the confidentiality requirements in
section 8.
``(6) Records and engagement.--The Commission shall--
``(A) maintain systems of records to track
engagements with the public through LabCFTC;
``(B) store communications and materials received
in connection with any such engagement in accordance
with Commission policies and procedures on data
retention and confidentiality; and
``(C) take reasonable steps to protect any
confidential or proprietary information received
through LabCFTC engagement.''.
(b) Conforming Amendments.--Section 2(a)(6)(A) of such Act (7
U.S.C. 2(a)(6)(A)) is amended--
(1) by striking ``paragraph and in'' and inserting
``paragraph,''; and
(2) by inserting ``and section 18(c)(3),'' before ``the
executive''.
(c) Effective Date.--The Commodity Futures Trading Commission shall
implement the amendments made by this section (including complying with
section 18(c)(7) of the Commodity Exchange Act) within 180 days after
the date of the enactment of this Act.
SEC. 504. STUDY ON DECENTRALIZED FINANCE.
(a) In General.--The Commodity Futures Trading Commission, the
Securities and Exchange Commission, and the Secretary of the Treasury
shall jointly carry out a study on decentralized finance that
analyzes--
(1) the nature, size, role, and use of decentralized
finance blockchain applications;
(2) the operation of blockchain applications that comprise
decentralized finance;
(3) the interoperability of blockchain applications and
other blockchain systems;
(4) the interoperability of blockchain applications and
software-based systems, including websites and wallets;
(5) the decentralized governance systems through which
blockchain applications may be developed, published,
constituted, administered, maintained, or otherwise
distributed, including--
(A) whether the systems enhance or detract from--
(i) the decentralization of the
decentralized finance; and
(ii) the inherent benefits and risks of the
decentralized governance system; and
(B) any procedures, requirements, or best practices
that would mitigate the risks identified in
subparagraph (A)(ii);
(6) the benefits of decentralized finance, including--
(A) operational resilience and availability of
blockchain systems;
(B) interoperability of blockchain systems;
(C) market competition and innovation;
(D) transaction efficiency;
(E) transparency and traceability of transactions;
and
(F) disintermediation;
(7) the risks of decentralized finance, including--
(A) pseudonymity of users and transactions;
(B) disintermediation; and
(C) cybersecurity vulnerabilities;
(8) the extent to which decentralized finance has
integrated with the traditional financial markets and any
potential risks or improvements to the stability of the
markets;
(9) how the levels of illicit activity in decentralized
finance compare with the levels of illicit activity in
traditional financial markets;
(10) methods for addressing illicit activity in
decentralized finance and traditional markets that are tailored
to the unique attributes of each;
(11) how decentralized finance may increase the
accessibility of cross-border transactions; and
(12) the feasibility of embedding self-executing compliance
and risk controls into decentralized finance.
(b) Consultation.--In carrying out the study required under
subsection (a), the Commodity Futures Trading Commission and the
Securities and Exchange Commission shall consult with the Secretary of
the Treasury on the factors described under paragraphs (7) through (10)
of subsection (a).
(c) Report.--Not later than 1 year after the date of enactment of
this Act, the Commodity Futures Trading Commission and the Securities
and Exchange Commission shall jointly submit to the relevant
congressional committees a report that includes the results of the
study required by subsection (a).
(d) GAO Study.--The Comptroller General of the United States
shall--
(1) carry out a study on decentralized finance that
analyzes the information described under paragraphs (1) through
(12) of subsection (a); and
(2) not later than 1 year after the date of enactment of
this Act, submit to the relevant congressional committees a
report that includes the results of the study required by
paragraph (1).
(e) Definitions.--In this section:
(1) Decentralized finance.--
(A) In general.--The term ``decentralized finance''
means blockchain applications (including decentralized
finance trading protocols and related decentralized
finance messaging systems) that allow users to engage
in financial transactions in a self-directed manner so
that a third-party intermediary does not effectuate the
transactions or take custody of digital commodities of
a user during any part of the transactions.
(B) Relationship to excluded activities.--The term
``decentralized finance'' shall not be interpreted to
limit or exclude any activity from the activities
described in section 15I(a) of the Securities Exchange
Act of 1934 or section 4v(a) of the Commodity Exchange
Act.
(2) Relevant congressional committees.--The term ``relevant
congressional committees'' means--
(A) the Committees on Financial Services and
Agriculture of the House of Representatives; and
(B) the Committees on Banking, Housing, and Urban
Affairs and Agriculture, Nutrition, and Forestry of the
Senate.
SEC. 505. STUDY ON NON-FUNGIBLE TOKENS.
(a) In General.--The Comptroller General of the United States shall
carry out a study of non-fungible tokens that analyzes--
(1) the nature, size, role, purpose, and use of non-
fungible tokens;
(2) the similarities and differences between non-fungible
tokens and other digital commodities, including digital
commodities and permitted payment stablecoins, and how the
markets for those digital commodities intersect with each
other;
(3) how non-fungible tokens are minted by issuers and
subsequently administered to purchasers;
(4) how non-fungible tokens are stored after being
purchased by a consumer;
(5) the interoperability of non-fungible tokens between
different blockchain systems;
(6) the scalability of different non-fungible tokens
marketplaces;
(7) the benefits of non-fungible tokens, including
verifiable digital ownership;
(8) the risks of non-fungible tokens, including--
(A) intellectual property rights;
(B) cybersecurity risks; and
(C) market risks;
(9) whether and how non-fungible tokens have integrated
with traditional marketplaces, including those for music, real
estate, gaming, events, and travel;
(10) whether and how non-fungible tokens can be used to
facilitate commerce or other activities through the
representation of documents, identification, contracts,
licenses, and other commercial, government, or personal
records;
(11) any potential risks to traditional markets from such
integration; and
(12) the levels and types of illicit activity in non-
fungible tokens markets.
(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the Comptroller General, shall make publicly available a
report that includes the results of the study required by subsection
(a).
SEC. 506. STUDY ON EXPANDING FINANCIAL LITERACY AMONGST DIGITAL
COMMODITY HOLDERS.
(a) In General.--The Commodity Futures Trading Commission with the
Securities and Exchange Commission shall jointly conduct a study to
identify--
(1) the existing level of financial literacy among retail
digital commodity holders, including subgroups of investors
identified by the Commodity Futures Trading Commission with the
Securities and Exchange Commission;
(2) methods to improve the timing, content, and format of
financial literacy materials regarding digital commodities
provided by the Commodity Futures Trading Commission and the
Securities and Exchange Commission;
(3) methods to improve coordination between the Securities
and Exchange Commission and the Commodity Futures Trading
Commission with other agencies, including the Financial
Literacy and Education Commission as well as nonprofit
organizations and State and local jurisdictions, to better
disseminate financial literacy materials;
(4) the efficacy of current financial literacy efforts with
a focus on rural communities and communities with majority
minority populations;
(5) the most useful and understandable relevant
information, including clear disclosures, that retail digital
commodity holders need to make informed financial decisions
before engaging with or purchasing a digital commodity or
service that is typically sold to retail investors of digital
commodities;
(6) the most effective public-private partnerships in
providing financial literacy regarding digital commodities to
consumers;
(7) the most relevant metrics to measure successful
improvement of the financial literacy of an individual after
engaging with financial literacy efforts; and
(8) in consultation with the Financial Literacy and
Education Commission, a strategy (including to the extent
practicable, measurable goals and objectives) to increase
financial literacy of investors regarding digital commodities.
(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the Commodity Futures Trading Commission and the
Securities and Exchange Commission shall jointly submit a written
report on the study required by subsection (a) to the Committees on
Financial Services and on Agriculture of the House of Representatives
and the Committees on Banking, Housing, and Urban Affairs and on
Agriculture, Nutrition, and Forestry of the Senate.
SEC. 507. STUDY ON FINANCIAL MARKET INFRASTRUCTURE IMPROVEMENTS.
(a) In General.--The Commodity Futures Trading Commission and the
Securities and Exchange Commission shall jointly conduct a study to
assess whether additional guidance or rules are necessary to facilitate
the development of tokenized securities and derivatives products, and
to the extent such guidance or rules would foster the development of
fair and orderly financial markets, be necessary or appropriate in the
public interest, and be consistent with the protection of investors and
customers.
(b) Report.--
(1) Time limit.--Not later than 1 year after the date of
enactment of this Act, the Commodity Futures Trading Commission
and the Securities and Exchange Commission shall jointly submit
to the relevant congressional committees a report that includes
the results of the study required by subsection (a).
(2) Relevant congressional committees defined.--In this
section, the term ``relevant congressional committees'' means--
(A) the Committees on Financial Services and on
Agriculture of the House of Representatives; and
(B) the Committees on Banking, Housing, and Urban
Affairs and on Agriculture, Nutrition, and Forestry of
the Senate.
SEC. 508. STUDY ON BLOCKCHAIN IN PAYMENTS.
(a) Study Required.--The Secretary of the Treasury shall conduct a
study on the potential use of blockchain technology by the domestic
private sector to address--
(1) fraud in payments;
(2) transaction costs and transaction times;
(3) automated payments; and
(4) efficiency in commercial transactions.
(b) Report to Congress.--Not later than one year after the date of
enactment of this Act, the Secretary shall submit a report to the
Committee on Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate that
summarizes the findings of the study required under subsection (a).
(c) Rule of Construction.--Nothing in this section shall be
construed to mandate the use of blockchain technology by any public or
private entity.
SEC. 509. STUDY ON ILLICIT USE OF DIGITAL ASSETS.
(a) In General.--One year after the date of the enactment of this
Act, the Secretary of the Treasury, in consultation with the Securities
and Exchange Commission and the Commodity Futures Trading Commission,
shall conduct a comprehensive review of how Foreign Terrorist
Organizations and Transnational Criminal Syndicates utilize digital
assets in connection with illicit activities.
(b) Report.--Not later than 180 days after completing the review
under subsection (a), the Secretary of the Treasury shall issue a
report to the Committees on Agriculture and on Financial Services of
the House of Representatives and the Committees on Agriculture,
Nutrition, and Forestry and on Banking, Housing, and Urban Affairs of
the Senate on the findings of the Secretary, including--
(1) an assessment of how Foreign Terrorist Organizations
and Transnational Criminal Syndicates utilize digital assets in
connection with illicit activities; and
(2) recommendations to assist the Securities and Exchange
Commission and the Commodity Futures Trading Commission in
strengthening compliance and enforcement of digital assets-
related entities registered with their respective agencies.
SEC. 510. GAO STUDY ON CERTAIN CENTRALIZED INTERMEDIARIES THAT ARE
PRIMARILY LOCATED IN FOREIGN JURISDICTIONS.
(a) In General.--The Comptroller General of the United States, in
consultation with the Secretary of the Treasury, shall conduct a study
to--
(1) assess the risks posed by centralized intermediaries
that are primarily located in foreign jurisdictions that
provide services to U.S. persons without regulatory
requirements that are substantially similar to the requirements
of the Bank Secrecy Act; and
(2) provide any regulatory or legislative recommendations
to address these risks under paragraph (1).
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Comptroller General shall issue a report to Congress
containing all findings and determinations made in carrying out the
study required under subsection (a).
SEC. 511. STUDIES ON FOREIGN ADVERSARY PARTICIPATION.
(a) In General.--The Secretary of the Treasury, in consultation
with the Commodity Futures Trading Commission and the Securities and
Exchange Commission, shall, not later than 1 year after date of the
enactment of this section, conduct a study and submit a report to the
relevant congressional committees that--
(1) identifies any digital commodity registrants which are
owned by governments of foreign adversaries;
(2) determines whether any governments of foreign
adversaries are collecting trading data about United States
persons in the digital commodity markets; and
(3) evaluates whether any proprietary intellectual property
of digital commodity registrants is being misused or stolen by
any governments of foreign adversaries.
(b) GAO Study and Report.--
(1) In general.--The Comptroller General shall, not later
than 1 year after date of the enactment of this section,
conduct a study and submit a report to the relevant
congressional committees that--
(A) identifies any digital commodity registrants
which are owned by governments of foreign adversaries;
(B) determines whether any governments of foreign
adversaries are collecting trading data about United
States persons in the digital commodity markets; and
(C) evaluates whether any proprietary intellectual
property of digital commodity registrants is being
misused or stolen by any governments of foreign
adversaries.
(c) Definitions.--In this section:
(1) Digital commodity registrant.--The term ``digital
commodity registrant'' means any person required to register as
a digital commodity exchange, digital commodity broker, or
digital commodity dealer under the Commodity Exchange Act.
(2) Foreign adversaries.--The term ``foreign adversaries''
means the foreign governments and foreign non-government
persons determined by the Secretary of Commerce to be foreign
adversaries under section 7.4(a) of title 15, Code of Federal
Regulations.
(3) Relevant congressional committees.--The term ``relevant
congressional committees'' means--
(A) the Committees on Financial Services and
Agriculture of the House of Representatives; and
(B) the Committees on Banking, Housing, and Urban
Affairs and Agriculture, Nutrition, and Forestry of the
Senate.
SEC. 512. CONFORMING AMENDMENTS.
The GENIUS Act is amended--
(1) in section 2, by amending paragraph (7) to read as
follows:
``(7) Digital asset service provider.--The term `digital
asset service provider' means any entity registered or required
to be registered with the Securities and Exchange Commission or
the Commodity Futures Trading Commission.'';
(2) in section 4(a)--
(A) by amending paragraph (3) to read as follows:
``(3) Monthly certification; examination of reports by
registered public accounting firm.--
``(A) In general.--A permitted payment stablecoin
issuer shall, each month, have the information
disclosed in the previous month-end report required
under paragraph (1)(C) examined by a registered public
accounting firm and such examination shall be performed
in accordance with standards for attestation
engagements issued or adopted by the primary Federal
payment stablecoin regulator or, in the case of a State
qualified payment stablecoin issuer, the State payment
stablecoin regulator.
``(B) Certification.--Each month, the Chief
Executive Officer and Chief Financial Officer of a
permitted payment stablecoin issuer shall submit to, as
applicable, the primary Federal payment stablecoin
regulator or, in the case of a State qualified payment
stablecoin issuer, the State payment stablecoin
regulator, a certification that, based on such
officers' knowledge, the previous monthly report
required under paragraph (1)(C)--
``(i) does not contain any untrue statement
of material fact or omit to state a material
fact necessary in order to make the statements
made, in light of the circumstances under which
such statements were made, not misleading; and
``(ii) fairly presented in all material
respects the information required under
paragraph (1)(C) for the period presented in
such report.
``(C) Criminal penalty.--Any person who submits a
certification required under subparagraph (B) knowing
that such certification is false shall be subject to
the same criminal penalties as those set forth under
section 1350(c) of title 18, United States Code.
``(D) Internal controls over permitted payment
stablecoin issuer's requirements.--
``(i) In general.--Management of a
permitted payment stablecoin issuer shall
establish and maintain an adequate internal
control structure and procedures for the
requirements under this paragraph and
paragraphs (1) and (2) in accordance with a
framework determined acceptable by the primary
Federal payment stablecoin regulator or, in the
case of a State qualified payment stablecoin
issuer, the State payment stablecoin regulator.
``(ii) Attestation report.--A permitted
payment stablecoin issuer shall obtain an
annual attestation report by an independent
registered public accounting firm attesting to
management's assertions concerning the
effectiveness of the internal control structure
and procedures for compliance with the
requirements described in this paragraph and
paragraphs (1) and (2). Such attestation shall
be made in accordance with standards for
attestation engagements issued or adopted by
the primary Federal payment stablecoin
regulator or, in the case of a State qualified
payment stablecoin issuer, the State payment
stablecoin regulator.''; and
(B) by amending paragraph (12) to read as follows:
``(12) Non-financial companies.--
``(A) Prohibition on non-financial company
ownership.--It shall be unlawful for a company that
derives a majority of its revenues from activities that
are not financial activities to retain or acquire
control of a nonbank entity that is--
``(i) a Federal qualified payment
stablecoin issuer; or
``(ii) a State qualified payment stablecoin
issuer.
``(B) Financial activities defined.--
``(i) In general.--In this paragraph, the
term `financial activities' means--
``(I) a financial activity, within
the meaning of section 4(k) of the Bank
Holding Company Act of 1956 (12 U.S.C.
1843(k));
``(II) issuing, redeeming,
providing custodial or safekeeping
services for, buying, selling, making a
market in, or managing a reserve for
payment stablecoins;
``(III) providing electronic wallet
services for payment stablecoins; or
``(IV) an activity determined by
the Board to be a financial activity
pursuant to clause (ii).
``(ii) Establishing additional financial
activities.--Not later than 180 days after the
date of enactment of the CLARITY Act of 2025,
the Board, in consultation with the Secretary
of the Treasury and the Comptroller, shall
issue rules, consistent with the purposes of
this Act, to establish--
``(I) a list of additional
activities that are financial
activities for purposes of clause (i),
including applicable digital asset
activities that are financial
activities; and
``(II) a streamlined procedure for
a nonbank entity to submit an activity
to the Board for purposes of the Board
determining whether such activity
should be added to the list of
additional activities that are
financial activities for purposes of
clause (i).''; and
(3) by adding at the end the following:
``SEC. 21. COMMODITY-BACKED PAYMENT STABLECOINS.
``(a) Rule of Construction.--Nothing in this Act shall be construed
to prohibit or limit a commodity-backed payment stablecoin issuer from
issuing a commodity-backed payment stablecoin in accordance with
regulations established by a State commodity-backed payment stablecoin
regulator.
``(b) Preservation of Federal Authority.--Nothing in this section
shall be construed to alter or limit the jurisdiction of the Commodity
Futures Trading Commission over any matter within the Commission's
authority under applicable law.
``(c) Definitions.--For purposes of this section:
``(1) Commodity-backed payment stablecoin.--The term
`commodity-backed payment stablecoin' means a digital asset--
``(A) that is, or is designed to be, used as a
means of payment or settlement;
``(B) that is denominated in a highly liquid,
publicly traded physical commodity, such as gold;
``(C) the issuer of which is obligated to--
``(i) convert, redeem, or repurchase for a
fixed amount of the denominated highly liquid,
publicly traded physical commodity; and
``(ii) custody or cause to be custodied,
for the benefit of the holders of the payment
stablecoin, an amount of the physical commodity
equal to or greater than the total amount of
outstanding payment stablecoins, for the
purpose of converting, redeeming, or
repurchasing the digital asset; and
``(D) that is not--
``(i) a security issued by--
``(I) an investment company
registered under section 8(a) of the
Investment Company Act of 1940 (15
U.S.C. 80a-8(a)); or
``(II) a person that would be an
investment company under the Investment
Company Act of 1940 but for paragraphs
(1) and (7) of section 3(c) of that Act
(15 U.S.C. 80a-3(c));
``(ii) a deposit (as defined under section
3 of the Federal Deposit Insurance Act (12
U.S.C. 1813)), regardless of the technology
used to record such deposit;
``(iii) an account (as defined in section
101 of the Federal Credit Union Act (12 U.S.C.
1752)), regardless of the technology used to
record such account; or
``(iv) an interest or participation in a
commodity pool (as defined in section 1a(10) of
the Commodity Exchange Act (7 U.S.C. 1a)).
``(2) Commodity-backed payment stablecoin issuer.--The term
`commodity-backed payment stablecoin issuer' means--
``(A) an entity that issues a commodity-backed
payment stablecoin; and
``(B) an entity that is approved to issue such
commodity-backed payment stablecoins by a State
commodity-backed payment stablecoin regulator.
``(3) Physical commodity.--The term `physical commodity'
means any exempt commodity (as defined in section 1a(21) of the
Commodity Exchange Act (7 U.S.C. 1a)) which can be physically
delivered.
``(4) State commodity-backed payment stablecoin
regulator.--The term `State commodity-backed payment stablecoin
regulator' means a State agency that has primary regulatory and
supervisory authority over entities that issue commodity-backed
payment stablecoins in such State.
``SEC. 22. PROTECTION OF SELF-CUSTODY.
``(a) In General.--A United States individual shall retain the
right to--
``(1) maintain a hardware wallet or software wallet for the
purpose of facilitating the individual's own lawful custody of
digital assets; and
``(2) engage in direct, peer-to-peer transactions in
digital assets with another individual or entity for the
individual's own lawful purposes using a hardware wallet or
software wallet, if--
``(A) such other individual or entity is not a
financial institution (as defined in section 5312 of
title 31, United States Code); and
``(B) the transactions do not involve any property
or interests in property that are blocked pursuant to,
or are otherwise prohibited by, United States
sanctions.
``(b) Application.--This section--
``(1) applies solely to personal use by individuals; and
``(2) does not apply to individuals acting in a custodial
or fiduciary capacity for others.
``(c) Rule of Construction.--Nothing in this section shall be
construed to limit the authority of the Secretary of the Treasury, the
Securities and Exchange Commission, the Commodity Futures Trading
Commission, or the primary Federal payment stablecoin regulators to
carry out any enforcement action or special measure authorized under
applicable law, including--
``(1) the Bank Secrecy Act, section 9714 of the Combating
Russian Money Laundering Act (31 U.S.C. 5318A note), and
section 7213A of the Fentanyl Sanctions Act (21 U.S.C. 2313a);
or
``(2) any other law relating to illicit finance, money
laundering, terrorism financing, or United States sanctions.''.
TITLE VI--ANTI-CBDC SURVEILLANCE STATE ACT
SEC. 601. SHORT TITLE.
This title may be cited as the ``Anti-CBDC Surveillance State
Act''.
SEC. 602. PROHIBITION ON FEDERAL RESERVE BANKS RELATING TO CERTAIN
PRODUCTS OR SERVICES FOR INDIVIDUALS AND PROHIBITION ON
DIRECTLY ISSUING A CENTRAL BANK DIGITAL CURRENCY.
Section 16 of the Federal Reserve Act (12 U.S.C. 411 et seq.) is
amended by adding at the end the following new paragraph:
``(18)(A) A Federal reserve bank may not--
``(i) offer financial products or services directly to an
individual;
``(ii) maintain an account on behalf of an individual; or
``(iii) issue a central bank digital currency, or any digital asset
that is substantially similar under any other name or label.
``(B) In this paragraph, the term `central bank digital currency'
has the meaning given that term under section 10(11)(D).''.
SEC. 603. PROHIBITION ON FEDERAL RESERVE BANKS INDIRECTLY ISSUING A
CENTRAL BANK DIGITAL CURRENCY.
Section 16 of the Federal Reserve Act (12 U.S.C. 411 et seq.), as
amended by section 2, is further amended by adding at the end the
following paragraph:
``(19)(A) A Federal reserve bank may not offer a central bank
digital currency, or any digital asset that is substantially similar
under any other name or label, indirectly to an individual through a
financial institution or other intermediary.
``(B) In this paragraph, the term `central bank digital currency'
has the meaning given that term under section 10(11)(D).''.
SEC. 604. PROHIBITION WITH RESPECT TO CENTRAL BANK DIGITAL CURRENCY.
Section 10 of the Federal Reserve Act (12 U.S.C. 241 et seq.) is
amended by inserting before paragraph (12) the following:
``(11) Prohibition with respect to central bank digital
currency.--
``(A) In general.--The Board of Governors of the
Federal Reserve System may not test, study, develop,
create, or implement a central bank digital currency,
or any digital asset that is substantially similar
under any other name or label.
``(B) Monetary policy.--The Board of Governors of
the Federal Reserve System and the Federal Open Market
Committee may not use a central bank digital currency
to implement monetary policy, or any digital asset that
is substantially similar under any other name or label.
``(C) Exception.--Subparagraph (A) and sections
16(18)(A)(iii) and 16(19)(A) may not be construed to
prohibit any dollar-denominated currency that is open,
permissionless, and private, and fully preserves the
privacy protections of United States coins and physical
currency.
``(D) Central bank digital currency defined.--In
this paragraph, the term `central bank digital
currency' means a form of digital money or monetary
value that is--
``(i) denominated in the national unit of
account;
``(ii) a direct liability of the Federal
Reserve System; and
``(iii) widely available to the general
public.''.
SEC. 605. SENSE OF CONGRESS.
It is the sense of Congress that the Board of Governors of the
Federal Reserve System currently does not have the authority to issue a
central bank digital currency, or any digital asset that is
substantially similar under any other name or label, and will not have
such authority unless Congress grants it under Congress's Article 1
Section 8 powers.
Passed the House of Representatives July 17, 2025.
Attest:
Clerk.
119th CONGRESS
1st Session
H. R. 3633
_______________________________________________________________________
AN ACT
To provide for a system of regulation of the offer and sale of digital
commodities by the Securities and Exchange Commission and the Commodity
Futures Trading Commission, to amend the Federal Reserve Act to
prohibit the Federal reserve banks from offering certain products or
services directly to an individual, to prohibit the use of central bank
digital currency for monetary policy, and for other purposes.