H.R. 3633 · House bill · 119th Congress

Digital Asset Market Clarity Act

Sponsored by Rep. J. Hill, Arkansas with 21 co-sponsors

Introduced May 29, 2025

Referred to the Banking, Housing, and Urban Affairs Committee

Latest action Sep 15, 2026

SponsorRep. J. Hill, Arkansas· 21 cosponsorsRep. Glenn Thompson, PennsylvaniaRep. Angie Craig, Minnesota

Show 19 more cosponsors

What the bill does

This bill establishes a regulatory framework for digital commodities, defined by the bill as digital assets that rely upon a blockchain for their value.

Summary by the Congressional Research Service, Jul 14, 2025.

Read the bill

About 35,900 words

Contents

Sec. 1. Short titles; table of contents

(a) Short titles.— This Act may be cited as the “Digital Asset Market Clarity Act of 2025” or the “CLARITY Act of 2025” and the “Anti-CBDC Surveillance State Act”.

(b) Table of contents.— The table of contents for this Act is as follows:

Title IDefinitions; Rulemaking; Expedited Registration

Sec. 101. Definitions under the Securities Act of 1933

Section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)) is amended by adding at the end the following:

“(20) Blockchain.— The term blockchain means—

(A) any technology—

(i) where data is—

(I) shared across a network to create a distributed ledger of independently verifiable transactions or information among network participants;

(II) linked using cryptography to maintain the integrity of the distributed ledger and to execute other functions; and

(III) propagated among network participants to reach consensus on the state of the distributed ledger and any other functions; and

(ii) composed of source code that is publicly available; and

(B) any similar technology to the technology described in subparagraph (A).

(21) Blockchain application.— The term blockchain application means any executable software that is deployed to a blockchain and composed of source code that is publicly available, including a smart contract or any network of smart contracts, or other similar technology.

(22) Blockchain protocol.— The term “blockchain protocol” means publicly available source code of a blockchain that is executed by the network participants of a blockchain to facilitate its functioning, or other similar technology.

(23) Blockchain system.— The term blockchain system means any blockchain, together with its blockchain protocol or any blockchain application or network of blockchain applications.

(24) Decentralized governance system.—

(A) In general.— The term decentralized governance system means, with respect to a blockchain system, any transparent, rules-based system permitting persons to form consensus or reach agreement in the development, provision, publication, maintenance, or administration of such blockchain system, where participation is not limited to, or under the effective control of, any person or group of persons under common control.

(B) Relationship of persons to decentralized governance systems.— With respect to a decentralized governance system, the decentralized governance system and any persons participating in the decentralized governance system shall be treated as separate persons unless such persons are under common control or acting pursuant to an agreement to act in concert.

(C) Legal entities for decentralized governance systems.— The term decentralized governance system shall include a legal entity used to implement the rules-based system described in subparagraph (A), provided that the legal entity does not operate pursuant to centralized management. For the purposes of this subparagraph, the delegation of ministerial or administrative authority at the direction of the participants in a decentralized governance system shall not be construed to be centralized management.

(25) Digital asset.— The term digital asset means any digital representation of value which is recorded on a cryptographically-secured distributed ledger or other similar technology.

(26) Digital commodity.— The term digital commodity has the meaning given that term under section 1a of the Commodity Exchange Act (7 U.S.C. 1a).

(27) Digital commodity affiliated person.— The term digital commodity affiliated person—

(A) means a person (including a digital commodity related person) that, with respect to any digital commodity—

(i) acquires or has any right to acquire 5 percent or more of the total outstanding units of such digital commodity from a digital commodity issuer or an agent or underwriter thereof;

(ii) is a founder of the digital commodity issuer; or

(iii) is an executive officer, director, trustee, general partner, or person serving in a similar capacity of the digital commodity issuer or held such role at any point in the previous 12-month period; and

(B) does not include a decentralized governance system.

(28) Digital commodity issuer.—

(A) In general.— With respect to a digital commodity, the term digital commodity issuer means any person that—

(i) issues or causes to be issued, or proposes to issue or cause to be issued, a unit of such digital commodity to a person; or

(ii) offers or sells a right to a future issuance of a unit of such digital commodity to a person.

(B) Prohibition on evasion.— It shall be unlawful for any person to knowingly evade classification as a “digital commodity issuer” and facilitate an arrangement for the primary purpose of effecting an offer, sale, distribution, or other issuance of a digital commodity, including via any arrangement involving the transfer of intellectual property associated with the blockchain system to which the digital commodity relates.

(29) Digital commodity related person.—

(A) In general.— With respect to a digital commodity issuer, the term digital commodity related person—

(i) means a person—

(I) that is or was in the previous 6-month period a promoter, senior employee, advisory board member, consultant, advisor, or person serving in a similar capacity; or

(II) that acquires or has any right to acquire 1 percent or more of the total outstanding units of such digital commodity from a digital commodity issuer or an agent or underwriter thereof; and

(ii) does not include a decentralized governance system.

(B) Senior employee defined.— In this paragraph and with respect to a digital commodity issuer, the term senior employee means any employee materially involved in the management of the digital commodity issuer, including management of the development of the blockchain system to which the digital commodity relates.

(30) End user distribution.—

(A) In general.— The term end user distribution means a distribution of a unit of a digital commodity that—

(i) does not involve an exchange of more than a nominal value of cash, property, or other assets; and

(ii) is distributed in a broad and equitable manner based on conditions capable of being satisfied by any participant in the blockchain system, including, as incentive-based rewards—

(I) to users of the digital commodity or any blockchain system to which the digital commodity relates;

(II) for activities directly related to the operation of the blockchain system, such as mining, validating, staking, or other activity directly tied to the operation of the blockchain system; or

(III) to the existing holders of another digital commodity, in proportion to the total units of such other digital commodity as are held by each person.

(B) Protocol consensus participation.— The term end user distribution includes the following:

(i) Self staking.— The distribution of a unit of a digital commodity as a programmatic result of validating or staking activity for a blockchain system’s consensus mechanism, including the staking of a digital commodity and the operation of a node or validator for such activity where the owner of the staked digital commodity and operator of the node or validator are the same person or entity.

(ii) Self-custodial staking with a third party.— The distribution of a unit of a digital commodity as a programmatic result of validating or staking activity for a blockchain system’s consensus mechanism, including the staking of a digital commodity and the operation of a node or validator for such activity where—

(I) the owner of the staked digital commodity and operator of the node or validator for such activity are different persons or entities; and

(II) the operator of the node or validator does not maintain custody or control of the staked digital commodity.

(iii) Custodial and ancillary staking services.— Subject to the rules issued pursuant to subparagraph (C), the provision of custodial or ancillary staking services enabling the owner of a digital commodity to participate in validating or staking activity for a blockchain system’s consensus mechanism that results in the programmatic distribution of a unit of a digital commodity, provided that such custodial or ancillary services are exclusively administrative or ministerial in nature.

(C) Rulemaking to define the custodial and ancillary staking services.— Not later than 270 days after the date of the enactment of this paragraph, the Commission shall issue rules defining the custodial and ancillary staking services described in subparagraph (B)(iii) that are exclusively administrative or ministerial in nature, consistent with what is necessary or appropriate for the public interest or for the protection of investors.

(31) Mature blockchain system.— The term ‘mature blockchain system’ means a blockchain system, together with its related digital commodity, that is not controlled by any person or group of persons under common control.

(32) Permitted payment stablecoin.— The term “permitted payment stablecoin” means a payment stablecoin (as defined in section 2 of the GENIUS Act) issued by a permitted payment stablecoin issuer.

(33) Permitted payment stablecoin issuer.— The term “permitted payment stablecoin issuer” has the meaning given that term in section 2 of the GENIUS Act.”.

Sec. 102. Definitions under the Securities Exchange Act of 1934

Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended—

(1) by redesignating the second paragraph (80) (relating to funding portals) as paragraph (81); and

(2) by adding at the end the following:

“(82) Bank Secrecy Act.— The term Bank Secrecy Act means—

(A) section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b);

(B) chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.); and

(83) Additional digital commodity-related terms.—

(A) Securities Act of 1933.— The terms blockchain system, decentralized governance system, digital asset, digital commodity affiliated person, digital commodity issuer, digital commodity related person, end user distribution, mature blockchain system, permitted payment stablecoin, and permitted payment stablecoin issuer have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)).

(B) Commodity Exchange Act.— The terms digital commodity, digital commodity broker, digital commodity dealer, digital commodity exchange, decentralized finance messaging system, and decentralized finance trading protocol have the meaning given those terms, respectively, under section 1a of the Commodity Exchange Act (7 U.S.C. 1a).”.

Sec. 103. Definitions under the Commodity Exchange Act

(a) In general.— Section 1a of the Commodity Exchange Act (7 U.S.C. 1a) is amended—

(1) in paragraph (10)—

(A) in subparagraph (A)—

(i) by redesignating clauses (iii) and (iv) as clauses (iv) and (v), respectively; and

(ii) by inserting after clause (ii) the following:

“(iii) digital commodity;”; and

(B) by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:

“(B) Exclusion.— For purposes of this paragraph, the term trading in commodity interests shall not include transacting in digital commodities for the purpose of—

(i) acting as a digital commodity custodian;

(ii) establishing, maintaining, or managing inventory or payment instruments for commercial purposes; or

(iii) maintaining or supporting the operation of, or validating transactions on, a blockchain system.”;

(2) in paragraph (11)—

(A) in subparagraph (A)(i)—

(i) by redesignating subclauses (III) and (IV) as subclauses (IV) and (V), respectively; and

(ii) by inserting after subclause (II) the following:

“(III) digital commodity;”; and

(B) by redesignating subparagraph (B) as subparagraph (C) and inserting after subparagraph (A) the following:

“(B) Exclusion.— For purposes of this paragraph, the term trading in commodity interests shall not include transacting in digital commodities for the purpose of—

(i) acting as a digital commodity custodian;

(ii) establishing, maintaining, or managing inventory or payment instruments for commercial purposes; or

(iii) maintaining or supporting the operation of, or validating transactions on, a blockchain system.”;

(3) in paragraph (12)(A)(i)—

(A) in subclause (II), by adding at the end a semicolon;

(B) by redesignating subclauses (III) and (IV) as subclauses (IV) and (V), respectively; and

“(III) a digital commodity;”;

(4) by redesignating paragraphs (16) through (51) as paragraphs (17) through (52), respectively, and inserting after paragraph (15) the following:

“(16) Terms related to digital commodities.—

(A) Associated person of a digital commodity broker.—

(i) In general.— Except as provided in clause (ii), the term associated person of a digital commodity broker means a person who is associated with a digital commodity broker as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves—

(I) the solicitation or acceptance of an order for the purchase or sale of a digital commodity; or

(II) the supervision of any person engaged in the solicitation or acceptance of an order for the purchase or sale of a digital commodity.

(ii) Exclusion.— The term associated person of a digital commodity broker does not include any person associated with a digital commodity broker the functions of which are solely clerical or ministerial.

(B) Associated person of a digital commodity dealer.—

(i) In general.— Except as provided in clause (ii), the term associated person of a digital commodity dealer means a person who is associated with a digital commodity dealer as a partner, officer, employee, or agent (or any person occupying a similar status or performing similar functions) in any capacity that involves—

(I) the solicitation or acceptance of a contract for the purchase or sale of a digital commodity; or

(II) the supervision of any person engaged in the solicitation or acceptance of a contract for the purchase or sale of a digital commodity.

(ii) Exclusion.— The term associated person of a digital commodity dealer does not include any person associated with a digital commodity dealer the functions of which are solely clerical or ministerial.

(i) section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b);

(ii) chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.); and

(iii) subchapter II of chapter 53 of title 31, United States Code.

(D) Decentralized finance messaging system.—

(i) In general.— The term decentralized finance messaging system means a software application that provides a user with the ability to create or submit an instruction, communication, or message to a decentralized finance trading protocol for the purpose of executing a transaction by the user.

(ii) Additional requirements.— The term decentralized finance messaging system does not include any system that provides any person other than the user with control over—

(I) the funds of the user; or

(II) the execution of the transaction of the user.

(E) Decentralized finance trading protocol.—

(i) In general.— The term decentralized finance trading protocol means a blockchain system through which multiple participants can execute a financial transaction—

(I) in accordance with an automated rule or algorithm that is predetermined and non-discretionary; and

(II) without reliance on any other person to maintain control of the digital assets of the user during any part of the financial transaction.

(ii) Exclusions.—

(I) In general.— The term decentralized finance trading protocol does not include a blockchain system if—

(aa) a person or group of persons under common control or acting pursuant to an agreement to act in concert has the 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

(bb) the blockchain system does not operate, execute, and enforce its operations and transactions based solely on pre-established, transparent rules encoded directly within the source code of the blockchain system.

(II) Special rule.— For purposes of subclause (I), a decentralized governance system shall not be considered to be a person or a group of persons under common control or acting pursuant to an agreement to act in concert.

(F) Digital commodity.—

(i) In general.— The term digital commodity means a digital asset that is intrinsically linked to a blockchain system, and the value of which is derived from or is reasonably expected to be derived from the use of the blockchain system.

(ii) Relationship to a blockchain system.— For purposes of this subparagraph, a digital asset is intrinsically linked to a blockchain system if the digital asset is directly related to the functionality or operation of the blockchain system or to the activities or services for which the blockchain system is created or utilized, including where the digital asset is—

(I) issued or generated by the programmatic functioning of the blockchain system;

(II) used to transfer value between participants in the blockchain system;

(III) used to access the activities or services of the blockchain system;

(IV) used to participate in the decentralized governance system of the blockchain system;

(V) used or removed from circulation in whole or in part to pay fees or otherwise verify or validate transactions on the blockchain system;

(VI) used as payment or incentive to participants in the blockchain system to engage in the activities of the blockchain system, provide services to other participants in the blockchain system, or otherwise participate in the functionality of the blockchain system; or

(VII) used as payment or incentive to participants in the blockchain system to validate transactions, secure the blockchain system, provide computational services, maintain or distribute information, or otherwise participate in the operations of the blockchain system.

(iii) Exclusion.— The term digital commodity does not include any of the following:

(I) Security.—

(aa) Any security, other than a note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement.

(bb) A note, an investment contract, or a certificate of interest or participation in any profit-sharing agreement that—

(AA) represents or gives the holder an ownership interest or other interest in the revenues, profits, obligations, debts, assets, or assets or debts to be acquired of the issuer of the digital asset or another person (other than a decentralized governance system);

(BB) makes the holder a creditor of the issuer of the digital asset or another person; or

(CC) represents or gives the holder the right to receive interest or the return of principal from the issuer of the digital asset or another person.

(II) Security derivative.— A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an agreement, contract, or transaction that is—

(aa) a security future, as defined in section 2a of the Securities Act of 1933;

(bb) a security-based swap, as defined in section 2a of the Securities Act of 1933;

(cc) a put, call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof), as defined in section 2a of the Securities Act of 1933; or

(dd) a put, call, straddle, option, or privilege on any security, as defined in section 2a of the Securities Act of 1933.

(III) Permitted payment stablecoin.— A digital asset that is a permitted payment stablecoin.

(IV) Banking deposit.—

(aa) 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 the deposit.

(bb) 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 the account.

(V) Commodity.— A digital asset that references, represents an interest in, or is functionally equivalent to—

(aa) an agricultural commodity;

(bb) an excluded commodity, other than a security; or

(cc) an exempt commodity, other than the digital commodity itself, as shall be further defined by the Commission.

(VI) Commodity derivative.— A digital asset that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an agreement, contract, or transaction that is—

(aa) a contract of sale of a commodity for future delivery or an option thereon;

(bb) a security futures product;

(cc) a swap;

(dd) an agreement, contract, or transaction described in section 2(c)(2)(C)(i) or section 2(c)(2)(D)(i);

(ee) a commodity option authorized under section 4c; or

(ff) a leverage transaction authorized under section 19.

(VII) Pooled investment vehicle.—

(aa) In general.— A digital asset not described by subclause (I) that, based on its terms and other characteristics, is, represents, or is functionally equivalent to an interest in—

(AA) a commodity pool, as defined in this Act; or

(BB) a pooled investment vehicle.

(bb) Pooled investment vehicle defined.— In this subclause, the term pooled investment vehicle means—

(AA) any investment company as defined in section 3(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(a));

(BB) any company (as defined in section 2 of such Act (15 U.S.C. 80a–2)) that would be an investment company under section 3(a) of such Act but for the exclusions provided from that definition by section 3(c) of such Act, if for purposes of this subclause the company were assumed to be an issuer (as defined in section 2 of such Act); or

(CC) any entity or person that is not an investment company but holds or will hold assets other than securities.

(VIII) Good, collectible, and other non-commodity asset.— A digital asset that has value, utility, or significance beyond its mere existence as a digital asset, including the digital equivalent of a tangible or intangible good, such as—

(aa) a work of art, a musical composition, a literary work, or other intellectual property;

(bb) collectibles, merchandise, virtual land, and video game assets;

(cc) affinity, rewards, or loyalty points, including airline miles or credit card points, that are not primarily speculative in nature; or

(dd) rights, licenses, and tickets.

(iv) Rule of construction.— No presumption shall exist that a digital asset is a security, nor shall a digital asset be excluded from being a digital commodity pursuant to clause (iii)(I), solely due to—

(I) the digital asset providing voting or economic rights with respect to the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system to which the digital asset relates;

(II) the value of the digital asset having the potential to appreciate or depreciate in response to the efforts, operations, or financial performance of the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system to which the digital asset relates; or

(III) the value of the digital asset appreciating or depreciating due to the use of the blockchain system to which the digital asset relates or the decentralized governance system of the blockchain system to which the digital asset relates.

(G) Digital commodity broker.—

(i) In general.— The term digital commodity broker means any person who, as a regular business—

(I) is engaged in—

(aa) soliciting or accepting an order from a customer for—

(AA) the purchase or sale of a digital commodity; or

(BB) an agreement, contract, or transaction described in section 2(c)(2)(D)(iv); and

(bb) in conjunction with the activities in item (aa), accepts or maintains control over—

(AA) the funds of any customer; or

(BB) the execution of any transaction of a customer;

(II) is engaged in soliciting or accepting orders from a customer for the purchase or sale of a unit of a digital commodity on or subject to the rules of a registered entity; or

(III) is registered with the Commission as a digital commodity broker.

(ii) Exceptions.— The term ‘digital commodity broker’ does not include a person solely because the person—

(I) solicits or accepts an order described in clause (i)(I)(aa)(AA) from a customer who is an eligible contract participant;

(II) enters into 1 or more digital commodity transactions that are attributable or solely incidental to making, sending, receiving, or facilitating payments, whether involving a payment service provider or on a peer-to-peer basis; or

(III) is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a broker under such section, as determined by the Commission.

(iii) Further definition.— The Commission, by rule or regulation, may exclude from the term digital commodity broker any person or class of persons if the Commission determines that the rule or regulation will effectuate the purposes of this Act.

(H) Digital commodity dealer.—

(i) In general.— The term digital commodity dealer means any person who, as a regular business—

(I) is, or offers to be a counterparty to a person for the purchase or sale of a digital commodity as a regular business, and in conjunction with the activities, accepts or maintains control over the funds of any counterparty; or

(II) is registered with the Commission as a digital commodity dealer.

(ii) Exception.— The term digital commodity dealer does not include a person solely because the person—

(I) is or offers to be a counterparty to a person who is an eligible contract participant;

(II) enters into a digital commodity transaction with an eligible contract participant;

(III) enters into a digital commodity transaction on or through a registered digital commodity exchange, with a registered digital commodity broker, or through a decentralized finance trading protocol;

(IV) enters into a digital commodity transaction for the person’s own account, either individually or in a fiduciary capacity, but not as a part of a regular business;

(V) enters into 1 or more digital commodity transactions that are attributable or solely incidental to making, sending, receiving, or facilitating payments, whether involving a payment service provider or on a peer-to-peer basis; or

(VI) is a bank (as defined under section 3(a) of the Securities Exchange Act of 1934) engaging in certain banking activities with respect to a digital commodity in the same or a similar manner as a bank is excluded from the definition of a dealer under section 3(a)(5) of such Act, as determined by the Commission.

(iii) Further definition.— The Commission, by rule or regulation, may exclude from the term digital commodity dealer any person or class of persons if the Commission determines that the rule or regulation will effectuate the purposes of this Act.

(I) Digital commodity exchange.— The term digital commodity exchange means a trading facility that offers or seeks to offer a cash or spot market in at least 1 digital commodity.

(J) Mixed digital asset transaction.— The term mixed digital asset transaction means a transaction in which a digital commodity is traded for a security.

(K) Terms defined under the Securities Act of 1933.— The terms blockchain system, decentralized governance system, digital asset, digital commodity issuer, digital commodity affiliated person, digital commodity related person, end user distribution, mature blockchain system, permitted payment stablecoin, and permitted payment stablecoin issuer have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)).”; and

(5) in paragraph (41) (as so redesignated by paragraph (4) of this subsection)—

(A) by striking “and” at the end of subparagraph (E);

(B) by striking the period at the end of subparagraph (F) and inserting “; and”; and

“(G) a digital commodity exchange registered under section 5i.”.

(b) Conforming amendments.—

(1) Each of the following provisions of law is amended by striking “1a(18)” and inserting “1a(19)”:

(A) Section 4s(h)(5)(A)(i) of the Commodity Exchange Act (7 U.S.C. 6s(h)(5)(A)(i)).

(B) Section 5(e) of the Securities Act of 1933 (15 U.S.C. 77e(e)).

(D) Section 15F(h)(5)(A)(i) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–10(h)(5)(A)(i)).

(2) Section 752 of the Wall Street Transparency and Accountability Act of 2010 (15 U.S.C. 8325) is amended by striking “1a(39)” and inserting “1a(40)”.

(3) Section 4s(f)(1)(D) of the Commodity Exchange Act (7 U.S.C. 6s(f)(1)(D)) is amended by striking “1a(47)(A)” and inserting “1a(48)(A)”.

(4) Each of the following provisions of the Commodity Exchange Act is amended by striking “1a(47)(A)(v)” and inserting “1a(48)(A)(v)”:

(A) Section 4t(b)(1)(C) (7 U.S.C. 6t(b)(1)(C)).

(B) Section 5(d)(23) (7 U.S.C. 7(d)(23)).

(D) Section 5h(f)(10)(A)(iii) (7 U.S.C. 7b–3(f)(10)(A)(iii)).

(5) Section 21(f)(4)(C) of the Commodity Exchange Act (7 U.S.C. 24a(f)(4)(C)) is amended by striking “1a(48)” and inserting “1a(49)”.

(6) Section 403 of the Legal Certainty for Bank Products Act of 2000 (7 U.S.C. 27a) is amended—

(A) in subsection (a)(2), by striking “1a(47)(A)(v)” and inserting “1a(48)(A)(v)”; and

(B) in each of subsections (b)(1) and (c)(2), by striking “1a(47)” and inserting “1a(48)”.

(7) Section 712 of the Wall Street Transparency and Accountability Act of 2010 (15 U.S.C. 8302) is amended—

(A) in subsection (a)(8), by striking “1a(47)(D)” each place it appears and inserting “1a(48)(D)”; and

(B) in subsection (d)(1), by striking “1a(47)(A)(v)” each place it appears and inserting “1a(48)(A)(v)”.

Sec. 104. Definitions under this Act

In this Act:

(1) Definitions under the Commodity Exchange Act.— The terms decentralized finance messaging system, decentralized finance trading protocol, digital commodity, digital commodity broker, digital commodity dealer, digital commodity exchange, and mixed digital asset transaction have the meaning given those terms, respectively, under section 1a of the Commodity Exchange Act (7 U.S.C. 1a).

(2) Definitions under the Securities Act of 1933.— The terms blockchain, blockchain system, blockchain protocol, decentralized governance system, digital asset, digital commodity issuer, end user distribution, mature blockchain system, permitted payment stablecoin, and permitted payment stablecoin issuer have the meaning given those terms, respectively, under section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)).

(3) Definitions under the Securities Exchange Act of 1934.— The terms Bank Secrecy Act, securities laws, and self-regulatory organization have the meaning given those terms, respectively, under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)).

Sec. 105. Rulemakings

(a) Definitions.— The Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules to further define the following terms:

(1) The terms—

(A) “blockchain”, “blockchain application”, “blockchain system”, “blockchain protocol”, “decentralized governance system”, “digital commodity affiliated person”, “digital commodity issuer”, “digital commodity related person”, “end user distribution”, and “mature blockchain system”, as defined under section 2(a) of the Securities Act of 1933;

(B) “unilateral authority”, as such term is used in section 42 of the Securities Exchange Act of 1934 and section 1a of the Commodity Exchange Act; and

(C) “programmatic functioning”, as such term is used in sections 4C of the Securities Act of 1933, section 42 of the Securities Exchange Act of 1934, and section 1a of the Commodity Exchange Act.

(2) The terms digital commodity, decentralized finance messaging system, and decentralized finance trading protocol, as defined under section 1a of the Commodity Exchange Act.

(b) Joint rulemaking for mixed digital asset transactions.— The Securities and Exchange Commission and the Commodity Futures Trading Commission shall jointly issue rules applicable to mixed digital asset transactions under this Act and the amendments made by this Act, including by further defining such term.

(1) In general.— A United States individual shall retain the right to—

(A) maintain a hardware wallet or software wallet for the purpose of facilitating the individual’s own lawful custody of digital assets; and

(B) 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—

(i) such other individual or entity is not a financial institution (as defined in section 5312 of title 31, United States Code); and

(ii) the transactions do not involve any property or interests in property that are blocked pursuant to, or are otherwise prohibited by, United States sanctions.

(2) Application.— This subsection—

(A) applies solely to personal use by individuals; and

(B) does not apply to individuals acting in a custodial or fiduciary capacity for others.

(3) Rule of construction.— Nothing in this subsection shall be construed to limit the authority of the Secretary of the Treasury, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the National Credit Union Administration to carry out any enforcement action or special measure authorized under applicable law, including—

(A) 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

(B) any other law relating to illicit finance, money laundering, terrorism financing, or United States sanctions.

(d) Joint rulemaking, procedures, or guidance for delisting.— Not later than 180 days after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules, procedures, or guidance (as determined appropriate by the Commissions) regarding the process to delist an asset for trading under section 106 if the Commissions determine that the listing is inconsistent with the Commodity Exchange Act, the securities laws (including regulations under those laws), or this Act.

(e) Joint rules for portfolio margining determinations.—

(1) In general.— Not later than 360 days after the date of the enactment of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission shall jointly issue rules describing the process for persons registered with either such Commission to seek a joint order or determination with respect to margin, customer protection, segregation, or other requirements as necessary to facilitate portfolio margining of securities (including related extensions of credit), security-based swaps, contracts for future delivery, options on a contract for future delivery, swaps, and digital commodities, or any subset thereof, in—

(A) a securities account carried by a registered broker or dealer or a security-based swap account carried by a registered security-based swap dealer;

(B) a futures or cleared swap account carried by a registered futures commission merchant;

(D) a digital commodity account carried by a registered digital commodity broker or digital commodity dealer that is also registered in such other capacity as is necessary to also carry the other customer or counterparty positions being held in the account.

(2) Process.— With respect to a joint order or determination described in paragraph (1), the rules required to be issued pursuant to paragraph (1) shall require—

(A) the joint order or determination to be issued only if the order or determination is in the public interest and provides for the appropriate protection of customers;

(B) applicants to file a standard application, in a form and manner determined by the Securities and Exchange Commission and the Commodity Futures Trading Commission, which shall include the information necessary to make the joint order or determination;

(C) the Securities and Exchange Commission and the Commodity Futures Trading Commission to make a final determination not later than 270 days after the filing of a completed application;

(D) the Securities and Exchange Commission and the Commodity Futures Trading Commission to consider the public interest of the joint order or determination through the solicitation of public comments; and

(E) the Securities and Exchange Commission and the Commodity Futures Trading Commission to consult with other relevant foreign or domestic regulators, including the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, as appropriate.

(f) Capital requirements to address netting agreements.— No later than 360 days following the date of enactment of this Act, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Federal Deposit Insurance Corporation shall develop risk-based and leverage capital requirements for insured depository institutions, depository institution holding companies, and nonbank financial companies supervised by the Board of Governors that address netting agreements that provide for termination and close-out netting across multiple types of financial transactions, consistent with subsection (e), in the event of a counterparty’s default.

Sec. 106. Expedited registration for digital commodity exchanges, brokers, and dealers; provisional status

(a) Registration.—

(1) In general.— Unless exempted from registration, a person shall not act as a digital commodity broker, digital commodity dealer, or digital commodity exchange after the end of the 90-day period beginning on the date the process described in paragraph (2) is adopted by the Commodity Futures Trading Commission, unless, as the case may be, the person is registered as a—

(A) digital commodity broker pursuant to section 4u of the Commodity Exchange Act;

(B) digital commodity dealer pursuant to section 4u of the Commodity Exchange Act; or

(2) Expedited process.— Within 180 days after the date of the enactment of this Act, the Commodity Futures Trading Commission shall adopt, by rule, regulation, or order, a process for expedited registration of persons required to be registered pursuant to paragraph (1).

(b) Provisional status.—

(1) In general.— A person who is registered in accordance with subsection (a) of this section shall be in provisional status until—

(A) in the case of a digital commodity broker or dealer, 270 days after the final effective date of the rulemakings required under section 4u of the Commodity Exchange Act; or

(B) in the case of a digital commodity exchange, 270 days after the final effective date of the rulemakings required under section 5i of such Act.

(2) Payment of fees.— A person in provisional status shall pay all fees and penalties required under section 410.

(1) Requirements.— A person in provisional status shall be subject to the requirements of this section and the Commodity Exchange Act and any rules or regulations promulgated under this section or the Commodity Exchange Act, as applicable.

(2) Listings.—

(A) In general.— Except as provided in subparagraph (B), a person in provisional status may continue to offer, solicit, trade, facilitate, execute, clear, report, or otherwise deal in any digital asset offered on or through the facilities of the person before the date of registration under this section, until such time as the joint rulemaking on definitions required under section 105(a) is effective.

(B) Delisting.— Before the effective date of the joint rulemaking on definitions under section 105(a), a person in provisional status shall cease offering, soliciting, trading, facilitating, executing, clearing, reporting, or otherwise dealing in any digital asset required to be delisted pursuant to a joint delisting process established under section 105(d).

(3) Exemptive authority.— In order to promote responsible innovation and fair competition, or protect customers, the Commodity Futures Trading Commission may exempt any persons or class of persons registered pursuant to subsection (a) and in provisional status pursuant to subsection (b) from any requirements of this section or the Commodity Exchange Act or any rules or regulations promulgated under this section or the Commodity Exchange Act, as applicable.

(d) Customer disclosure before registration.—

(1) In general.— Beginning 30 days after the date of the enactment of this Act, any person acting as a digital commodity exchange, digital commodity broker, or digital commodity dealer shall disclose to the customers of the person so acting, in the disclosure documents, offering documents, and promotional material of the person so acting, in a prominent manner, that the person is not registered with or regulated by the Commodity Futures Trading Commission.

(2) Expiration.— Paragraph (1) of this subsection shall not apply to any person who registers pursuant to subsection (a).

Sec. 107. Commodity Exchange Act and securities laws savings provisions

(a) In general.— Nothing in this Act shall affect or apply to, or be interpreted to affect or apply to—

(1) any agreement, contract, or transaction that is subject to the Commodity Exchange Act as—

(A) a contract of sale of a commodity for future delivery or an option on such a contract;

(B) a swap;

(D) an option authorized under section 4c of such Act;

(E) an agreement, contract, or transaction described in section 2(c)(2)(C)(i) of such Act; or

(F) a leverage transaction authorized under section 19 of such Act;

(2) any agreement, contract, or transaction that is subject to the securities laws as—

(A) a security-based swap;

(B) a security futures product; or

(3) the activities of any person with respect to any such agreement, contract, or transaction.

(b) Prohibitions on spot digital commodity entities.— Nothing in this Act authorizes, or shall be interpreted to authorize, a digital commodity exchange, digital commodity broker, or digital commodity dealer to engage in any activities involving any transaction, contract, or agreement described in subsection (a)(1), solely by virtue of being registered as a digital commodity exchange, digital commodity broker, or digital commodity dealer.

(c) Definitions.— In this section, each term shall have the meaning provided in the Commodity Exchange Act or the regulations prescribed under such Act.

Sec. 108. Administrative requirements

Section 4c(a) of the Commodity Exchange Act (7 U.S.C. 6c(a)) is amended—

(1) in paragraph (3)—

(A) in subparagraph (B), by striking “or” at the end;

(B) in subparagraph (C), by striking the period and inserting “; or”; and

“(D) a contract of sale of a digital commodity.”;

(2) in paragraph (4)—

(A) in subparagraph (A)—

(i) in clause (ii), by striking “or” at the end;

(ii) in clause (iii), by striking the period and inserting “; or”; and

(iii) by adding at the end the following:

“(iv) a contract of sale of a digital commodity.”;

(B) in subparagraph (B)—

(i) in clause (ii), by striking “or” at the end;

(ii) in clause (iii), by striking the period and inserting “; or”; and

(iii) by adding at the end the following:

“(iv) a contract of sale of a digital commodity.”; and

(i) in clause (ii), by striking “or” at the end;

(ii) by striking “(iii) a swap, provided however,” and inserting the following:

“(iii) a swap; or

(iv) a contract of sale of a digital commodity,”; and

(iii) by striking “clauses (i), (ii), or (iii)” and insert “any of clauses (i) through (iv)”.

Sec. 109. Treatment of certain non-controlling blockchain developers

(a) In general.— Notwithstanding applicable law, a non-controlling blockchain developer or provider of a blockchain service shall not be treated as a money transmitter or as engaged in “money transmitting” or, following the date of enactment of this Act, be otherwise subject to any new registration requirement that is substantially similar to the requirement that currently applies to money transmitters, solely on the basis of—

(1) creating or publishing software to facilitate the creation of, or provision of maintenance services to, a blockchain or blockchain service;

(2) providing hardware or software to facilitate a customer’s own custody or safekeeping of the customer’s digital assets; or

(3) providing infrastructure support to maintain a blockchain service.

(b) Rule of Construction.— Nothing in this section shall be construed to affect whether a blockchain developer or provider of a blockchain service is otherwise subject to classification or treatment as a money transmitter, or as engaged in “money transmitting”, under applicable State or Federal law, including laws relating to anti-money laundering or countering the financing of terrorism, based on conduct outside the scope of subsection (a). Nothing in this section shall be construed to affect whether a blockchain developer or provider of a blockchain service is otherwise subject to classification or treatment as a financial institution under the Bank Secrecy Act, this Act, or any Act enacted after the date of enactment of this Act.

(1) Intellectual property law.— Nothing in this section shall be construed to limit or expand any law pertaining to intellectual property.

(2) State law.— Nothing in this section shall be construed to prevent any State from enforcing any State law that is consistent with this section. No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.

(d) Definitions.— In this section:

(1) Blockchain developer.— The term “blockchain developer” means any person or business that creates or publishes software to facilitate the creation of, or provide maintenance to, a blockchain or a blockchain service.

(2) Blockchain service.— The term “blockchain service” means any information, transaction, or computing service or system that provides or enables access to a blockchain network by multiple users, including specifically a service or system that enables users to send, receive, exchange, or store digital assets described by blockchain networks.

(3) Non-controlling blockchain developer or provider of a blockchain service.— The term “non-controlling blockchain developer or provider of a blockchain service” means a blockchain developer or provider of a blockchain service that in the regular course of operations, does not have the legal right or the unilateral and independent ability to control, initiate upon demand, or effectuate transactions involving digital assets that users are entitled to, without the approval, consent, or direction of any other third party.

Sec. 110. Application of the Bank Secrecy Act

(a) In general.— Section 5312(c)(1)(A) of title 31, United States Code, is amended—

(1) by inserting “digital commodity broker, digital commodity dealer,” after “futures commission merchant,”; and

(2) by inserting before the period the following: “and any digital commodity exchange registered, or required to register, under the Commodity Exchange Act which permits direct customer access”.

(b) Bank Secrecy Act requirements.—

(1) Regulations.— The Secretary of the Treasury, acting through the Director of the Financial Crimes Enforcement Network, and in consultation with Commodity Futures Trading Commission, shall issue requirements consistent with the requirements of futures commission merchants to apply the Bank Secrecy Act to digital commodity brokers, digital commodity dealers, and digital commodity exchanges that are tailored to the size and complexity of such entities, including by requiring each such entity to—

(A) establish and maintain an anti-money laundering and countering the financing of terrorism program, which shall include—

(i) an appropriate risk assessment;

(ii) the development of internal policies, procedures, and controls;

(iii) the designation of a compliance officer;

(iv) an ongoing employee training program; and

(v) an independent audit function to test such program;

(B) retain appropriate records of transactions;

(D) maintain an effective customer identification program to identify and verify account holders and carry out appropriate customer due diligence.

(2) Compliance with sanctions.— A digital commodity broker, digital commodity dealer, or digital commodity exchange shall comply with all laws and regulations related to United States sanctions administered by the Office of Foreign Assets Control.

Sec. 111. Rule of construction

Nothing in this Act, or the amendments made by this Act, shall be construed to limit or prevent the continued application of applicable ethics statutes and regulations administered by the Office of Government Ethics, or the ethics rules of the Senate and the House of Representatives, including section 208 of title 18, United States Code, and sections 2635.702 and 2635.802 of title 5, Code of Federal Regulations. For the avoidance of doubt, existing Office of Government Ethics laws and the ethics rules of the Senate and the House of Representatives prohibit any member of Congress or senior executive branch official from issuing a digital commodity during their time in public service. For the purposes of this section, an employee described in section 202 of title 18, United States Code, shall be deemed an executive branch employee for purposes of complying with section 208 of that title.

Sec. 112. Implementation

(a) Global rulemaking timeframe.— Unless otherwise provided in this Act or an amendment made by this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission, or both, shall individually, and jointly where required, promulgate rules and regulations required of each Commission under this Act or an amendment made by this Act not later than 360 days after the date of enactment of this Act.

(b) Rules and registration before final effective dates.—

(1) In general.— In order to prepare for the implementation of this Act, the Commodity Futures Trading Commission and the Securities and Exchange Commission may, before any effective date provided in this Act—

(A) promulgate rules, regulations, or orders permitted or required by this Act;

(B) conduct studies and prepare reports and recommendations required by this Act;

(D) exempt persons, agreements, contracts, or transactions from provisions of this Act, under the terms contained in this Act.

(2) Limitation on effectiveness.— An action by the Commodity Futures Trading Commission or the Securities and Exchange Commission under paragraph (1) shall not become effective before the effective date otherwise applicable to the action under this Act.