The "Financial Innovation and Technology for the 21st Century Act" outlines its overall structure, setting out specific titles and sections related to definitions, digital asset regulations, and registration requirements for digital asset intermediaries. It also focuses on improving innovation and technology within financial oversight agencies, such as the SEC and CFTC, by presenting measures for greater clarity and accountability in dealing with digital commodities and assets.

The section adds definitions to the Securities Act of 1933 related to digital assets and blockchain technology. It explains key terms like blockchain, digital asset, decentralized network, and digital asset issuer, helping to clarify how these fit within existing securities regulations.

The section of the Commodity Exchange Act introduces and defines terms related to digital commodities. It outlines what qualifies as a digital commodity, who can be considered a digital commodity broker or dealer, and includes specific exclusions, such as the functions solely being clerical or ministerial, payments facilitation, and blockchain operations. Additionally, it provides definitions for various digital asset-related roles and terms, ensuring clarity in how these concepts are applied within the legal framework.

The section provides definitions for various terms used in the bill, specifically relating to commodities, securities, and digital assets. It references and aligns these terms with established meanings from the Commodity Exchange Act, the Securities Act of 1933, and the Securities Exchange Act of 1934.

The section outlines that the Commodity Futures Trading Commission and the Securities and Exchange Commission must work together to create rules defining various digital asset-related terms and address overlapping regulations for entities registered as both digital commodity exchanges and digital asset trading systems. It also states that individuals in the U.S. cannot be banned from using digital wallets for self-custody of digital assets, as long as they follow the law.

The text outlines the process for individuals or organizations intending to register as digital commodity exchanges, brokers, or dealers with the Commodity Futures Trading Commission. It includes requirements for filing notices, providing detailed asset information, adhering to customer protection rules, and maintaining transparency in financial dealings to ensure compliance with relevant regulations.

This section discusses the process for individuals wanting to register with the Securities and Exchange Commission as digital asset brokers, dealers, or trading systems. It outlines the requirements for filing a notice of intent, disclosing management and operational information, adhering to certain record-keeping and consumer protection standards, and provides guidance on compliance, enforcement, and the transition to final registration rules.

The section ensures that the new Act does not change any rules or transactions related to the Commodity Exchange Act, including contracts for future delivery, swaps, and other specified financial agreements. It also clarifies that being a registered digital commodity exchange or broker does not automatically allow them to engage in these specific commodities transactions.

The section explains that the Commodity Futures Trading Commission and the Securities and Exchange Commission are instructed to work with other countries' regulators to create uniform global rules for digital assets, and they can share information if it's beneficial for the public or protects investors and users.

The section outlines that the Commodity Futures Trading Commission and the Securities and Exchange Commission must establish necessary rules and regulations within 360 days of the new law being enacted. Additionally, these commissions are allowed to start creating rules, conducting studies, and registering or exempting individuals and transactions before the law's official effective date, though their actions cannot take effect until that date.

The proposed amendments to the Securities Act of 1933 allow certain transactions involving digital assets to be exempt from registration if specific conditions are met, such as limits on the amount sold, restrictions on who can purchase, and requirements for issuers to disclose important information. Additionally, the bill outlines reporting obligations for digital asset issuers and sets qualifications for intermediaries involved in these transactions, while offering exemptions from some federal and state regulations.

This section outlines the requirements for digital asset issuers and intermediaries when offering or selling digital assets under certain conditions. Issuers must provide detailed information about their operations, financials, and risks, while intermediaries must ensure purchasers meet qualification standards and register as brokers, with some rules also governing communication about potential offerings.

The section outlines rules for buying and selling certain digital assets, stating that these assets can be traded on certain platforms if they are part of a functioning network and specific information is available. It also specifies conditions under which related individuals or companies can trade these digital assets, noting that such trades are not considered transactions in securities, except in specific situations involving mixed assets or investment contracts.

A section of the bill outlines the rules for buying and selling certain digital assets. It includes specific conditions for selling restricted digital assets and digital commodities, especially when linked to related or affiliated persons, and specifies that transactions following these rules are generally not considered securities transactions.

The section introduces enhanced disclosure requirements for digital assets, mandating information regarding the source code, transaction history, digital asset economics, development plans, associated risks, and key stakeholders. The disclosures must be certified quarterly to ensure accuracy, with certifications sent to the Commodity Futures Trading Commission and the Securities and Exchange Commission.

The section discusses enhanced disclosure requirements for digital assets and blockchain systems, detailing the need for public information about source code, transaction history, and digital asset economics like launch procedures and governance. It also requires information on development plans, persons affiliated with the blockchain, risk factors, and mandates quarterly certification to relevant authorities that the disclosed information is accurate.

The section outlines a process where people can certify blockchain systems as decentralized networks to the Securities and Exchange Commission (SEC). The SEC can review these certifications, possibly challenge them, and make the information public, ensuring that false information is penalized and offering an avenue for appeal if a certification is rebutted.

The section outlines a process allowing individuals to certify a blockchain as decentralized to the SEC, requiring detailed information on the blockchain's operation and governance. The SEC may challenge this certification within 30 days, and appeals can be made if the certification is rebutted, with penalties for submitting false information.

This section explains when the title and its amendments will officially begin to apply. Generally, it will take effect 360 days after the law is put into action unless a rule needs to be made, in which case it will start either 360 days after enactment or 60 days after the final rule is published, whichever is later.

This section outlines changes to several financial acts to clarify the definitions and exclusions related to digital commodities and digital assets, ensuring they do not fall under certain securities and exchange regulations. It introduces specific terms like "digital asset broker," "digital asset dealer," and others to provide clearer guidelines for their roles and distinguish them from traditional financial instruments and platforms.

The section amends the Securities Exchange Act of 1934 to extend certain antifraud, manipulation, and insider trading rules to stablecoins when they are brokered, traded, or held by brokers or dealers, just like securities. However, it clarifies that the Commission cannot impose rules on the operations or financial aspects of stablecoin issuers.

Section 303 amends the Securities Exchange Act to require digital asset trading systems that operate within the United States to register with the Commission. It is illegal for these systems to engage in transactions using mail or interstate commerce unless registered, though some systems may be exempt if they meet specific regulatory criteria.

The section outlines requirements for digital asset trading systems, stating that they cannot hold customer assets unless acting in another authorized capacity like a broker and under specific regulations. It details rules on operations and transparency, prohibits using “exchange” in their name unless certain conditions are met, and classifies them as financial institutions under the Bank Secrecy Act.

A digital asset trading system is not allowed to hold customer assets unless it does so in another permitted role, like a broker, following certain rules. The law requires such systems to notify the Commission of their operations, set fair access policies, ensure system security, and maintain records, among other responsibilities. They also can't use the word "exchange" in their name unless they meet specific conditions, and they are treated as financial institutions under the Bank Secrecy Act.

The section of the bill requires digital asset brokers and dealers to register with the Securities Exchange Commission (SEC) unless their business is exclusively conducted within one state and without using digital asset trading platforms. They must also join a national securities association unless it hasn't yet established membership rules for them, in which case they have a 360-day grace period. Additionally, they can keep any registrations with the Commodity Futures Trading Commission for related activities.

Digital asset brokers and dealers must register with the authorities to conduct business across state lines using the mail or internet, unless their operations are local. They also need to be members of a national securities association, with a grace period of 360 days from when the first association admits such members, and they can additionally hold registrations for related activities with the Commodity Futures Trading Commission.

The section outlines regulations for digital asset brokers and dealers under the Securities Exchange Act of 1934, focusing on preventing fraud, safeguarding customer assets, ensuring capital requirements, and maintaining records. It mandates that brokers handle customer assets carefully, avoid mixing them with company funds, report regularly to the Commission, and be treated as financial institutions under the Bank Secrecy Act.

The Securities Exchange Act of 1934 is updated to include a new rule, section 10E, which requires digital asset trading platforms, brokers, dealers, and clearing agencies to have written policies to manage conflicts of interest related to their business activities.

Each entity involved in digital asset trading, brokering, or clearing must create and follow written guidelines to help prevent conflicts of interest, especially when dealing with related companies.

The section explains that certain digital assets are considered covered securities and do not require registration under the Securities Act if they are handled by federally regulated intermediaries. This includes digital assets that are managed by registered brokers or dealers, or traded through specific digital asset trading systems.

Anyone who is registered with the Securities and Exchange Commission as a digital asset broker, dealer, or trading system can also register with the Commodity Futures Trading Commission. This allows them to be recognized as a digital commodity exchange, broker, or dealer if they trade or deal in digital commodity markets, depending on the type of service they provide.

Section 310 introduces an amendment to the Securities Exchange Act of 1934, stating that individuals engaging in ancillary activities related to blockchain operations will not be regulated under this Act, except for cases involving anti-manipulation and antifraud measures. Ancillary activities include tasks like managing network transactions, providing computational resources, offering user interfaces for blockchain interaction, and developing blockchain and wallet software.

The section describes that a person is not subject to the regulations of the Act solely for engaging in certain ancillary activities related to blockchain systems, like compiling transactions, operating nodes, or developing interfaces. However, these exemptions do not apply to activities involving manipulation or fraud as governed by the Commission.

The section outlines the rules for registering "notice-registered digital asset clearing agencies" with the Securities and Exchange Commission (SEC). It specifies who is eligible to register, such as digital asset brokers, dealers, or banks dealing with digital assets, and states that the SEC may establish rules for these agencies, which won't take effect until at least 360 days after the enactment of this section.

The section outlines that banks and similar financial institutions are not required to list assets they hold in custody, like digital assets, as liabilities, nor do they need to hold extra capital for these assets, except to manage operational risks. It also clarifies definitions for "depository institution" and credit union terms.

The section of this bill modifies the Commodity Exchange Act to clarify the jurisdiction of the Commodity Futures Trading Commission (CFTC) over digital commodity transactions, including certain stablecoin transactions, while also specifying when the Securities and Exchange Commission (SEC) will oversee mixed digital asset transactions. It also establishes guidelines for how the CFTC can interact with these transactions but restricts it from imposing rules on the operation of stablecoin issuers.

The section updates the Commodity Exchange Act to require futures commission merchants to use qualified digital commodity custodians for holding digital commodities, in addition to the already allowed banks and trust companies.

The text outlines amendments to the Commodity Exchange Act to include rules for the certification and approval of digital commodities. It specifies that eligible entities must provide detailed information and analysis about digital commodities to the Commodity Futures Trading Commission (CFTC) before they can be traded, and establishes procedures for the review and possible disapproval of these certifications.

The section details the rules and requirements for registering and running digital commodity exchanges. It includes conditions for registration, trading practices, and customer protections, and provides guidelines on issues like conflict of interest, financial resources, and record-keeping.

This section outlines the requirements for digital commodity exchanges, including their registration, trading practices, core operational principles, and treatment of customer assets. It also details how these exchanges should manage conflicts of interest, financial resources, and other regulatory duties to ensure transparency and protect customers, while granting the Commission the authority to enforce rules and exemptions as necessary.

The section establishes rules for "qualified digital commodity custodians," who must be properly supervised and regulated to handle digital commodities securely. These custodians need to share information with the Commission as needed, and the Commission can temporarily suspend or adapt certain requirements to protect the public interest.

A qualified digital commodity custodian is defined as a digital commodity custodian that meets certain conditions, such as adequate supervision and regulation, no prohibitions on holding digital commodities, and agreements to share information about customer accounts with the Commission as needed. The Commission has the authority to further define these terms and may temporarily suspend any requirements if it aligns with public interest.

The section outlines regulations for registering and regulating digital commodity brokers and dealers. It mandates that anyone acting as a digital commodity broker or dealer must register with the Commission, adhere to specific business conduct standards, maintain certain financial and reporting procedures, and protect customer assets according to detailed guidelines.

The section outlines the rules and requirements for digital commodity brokers and dealers, including the necessity of registration, reporting, and compliance with financial and conduct standards to ensure transparency and protection for customers, as well as the segregation and safeguarding of customer assets. It also grants the Commission exclusive oversight and allows exemptions if certain conditions are met, treating these brokers and dealers like financial institutions under the Bank Secrecy Act.

Section 407 of the bill amends the Commodity Exchange Act to require that anyone acting as an associate of a digital commodity broker or dealer must be registered with the Commission, and it prohibits brokers and dealers from associating with unregistered individuals. It also updates references in the Act to reflect these changes.

The section amends the Commodity Exchange Act to include digital commodities alongside physical commodities in the rules governing commodity pool operators and commodity trading advisors. It also updates the language to ensure both types of entities are equally recognized in the law.

The section exempts people from certain regulations in the Commodity Exchange Act if they are only involved in auxiliary activities related to blockchain technology. However, these exemptions do not apply if fraud, manipulation, or false reporting is involved.

People who only carry out certain support tasks related to blockchain networks, like processing transactions or providing network services, are not covered by this law, but this exemption does not protect them from rules against fraud or manipulation. These tasks, referred to as "ancillary activities," include actions like helping manage blockchain operations, providing computational resources, creating user interfaces for blockchain use, and developing or distributing blockchain-related software or systems.

The section allocates $120,000,000 from the U.S. Treasury to the Commodity Futures Trading Commission to handle the implementation, administration, and enforcement of this Act's provisions, and these funds will be available for the next five years starting from when the Act is enacted.

Unless stated otherwise, this section of the bill will become active 360 days after the law is passed. However, if the section involves creating a new rule, it will start either 360 days after the law passes or 60 days after the rule is announced in the Federal Register, whichever is later.

The section establishes a new office within the Securities and Exchange Commission called the Strategic Hub for Innovation and Financial Technology (FinHub). FinHub's purpose is to help guide the SEC in responding to technological advancements in the financial sector, educate about financial technology, advise on related regulations, and report annually to Congress on its activities, ensuring confidentiality and secure record-keeping.

The section establishes LabCFTC within the Commodity Futures Trading Commission (CFTC) to encourage and guide financial technology innovation. It outlines LabCFTC's purposes, duties, and requirements for reporting to Congress and mandates the CFTC to provide necessary documents and maintain secure records for LabCFTC's communication with interested parties.

The CFTC-SEC Joint Advisory Committee on Digital Assets is established by the Commodity Futures Trading Commission and the Securities and Exchange Commission to provide advice on digital asset rules and policies, promote regulatory harmony, and explore digital asset technologies. The committee comprises at least 20 non-federal members from diverse backgrounds in the digital asset field, including issuers and researchers, and two federal officers, and it must meet at least twice a year. Members will not receive compensation, but expenses are covered, and the commissions are responsible for funding the committee.

The amendments proposed in this section update various acts related to financial markets to emphasize the importance of innovation by adding the term "innovation" alongside "efficiency" in their descriptions. This applies to the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, and the Investment Company Act of 1940.

The section mandates the Commodity Futures Trading Commission and the Securities and Exchange Commission to jointly study decentralized finance (DeFi), examining various aspects like blockchain protocols, risks, benefits, and integration with traditional markets. A report of their findings is due within a year, alongside a separate study by the Comptroller General.

The section directs the Comptroller General to conduct a study on non-fungible digital assets, examining aspects such as their nature, market interaction, creation, storage, benefits, risks, and use in traditional markets. A report with the findings is to be publicly released by the Secretary of Commerce within one year.

The section mandates a joint study by the Commodity Futures Trading Commission and the Securities and Exchange Commission to determine if new rules are needed to support the development of tokenized securities and derivatives. They must report their findings to specific congressional committees within one year.

The "Financial Innovation and Technology for the 21st Century Act" outlines a framework for defining, regulating, and overseeing digital assets and related financial activities. It includes sections on digital asset transactions, registration requirements for different digital asset intermediaries, innovation and technology improvements, and various studies related to digital finance.

The section revises the Securities Act of 1933 to define terms related to digital assets, blockchain, and associated technologies. It explains key concepts like "digital asset," "decentralized network," "blockchain system," and the roles of different people and entities within these digital systems.

This section of the Securities Exchange Act of 1934 provides definitions for several terms related to digital assets, including brokers, custodians, dealers, and trading systems. It also clarifies the meaning of terms used in other laws like the Bank Secrecy Act, the Securities Act of 1933, and the Commodity Exchange Act.

The section amends the Commodity Exchange Act to incorporate definitions related to digital commodities. It introduces terms such as "digital commodity," "digital commodity broker," and "digital commodity exchange," while also providing exclusions and clarifications for various digital commodity activities.

In this section of the Act, several technical terms related to digital commodities, securities, and digital assets are defined. These definitions are aligned with the meanings given in specific sections of existing laws, including the Commodity Exchange Act, the Securities Act of 1933, and the Securities Exchange Act of 1934.

The section requires the Commodity Futures Trading Commission and the Securities and Exchange Commission to work together to create rules defining various digital asset-related terms and simplifying regulations for exchanges dealing with both digital commodities and digital assets. It also ensures that individuals can maintain and use digital wallets for lawful purposes, and outlines how exchanges can delist assets that do not comply with relevant laws.

The section explains the process for individuals or companies to notify the Commodity Futures Trading Commission of their intent to register as digital commodity exchanges, brokers, or dealers. It outlines the necessary disclosures, requirements for handling customer assets, compliance with regulations, and consequences for providing false information in the registration process.

This section explains that people who want to register as digital asset brokers, dealers, or trading systems with the Securities and Exchange Commission must submit a notice of intent to register, follow specific requirements related to transparency and customer protection, and ensure their operations comply with certain rules. Those who file notices of intent can temporarily avoid certain registration regulations, provided they follow the rules, but they must fully register once the final registration rules are set.

The section clarifies that this law does not change how certain financial agreements, like commodity futures or swaps, are regulated under the Commodity Exchange Act. It also states that being part of a digital commodity exchange doesn't let someone handle those agreements simply because they are registered in that digital exchange.

The section aims to ensure that the United States regulates digital assets in a way that aligns with other countries. It directs the Commodity Futures Trading Commission and the Securities and Exchange Commission to collaborate with international regulators to create consistent rules and allows them to share necessary information to protect investors and users.

The section requires the Commodity Futures Trading Commission and the Securities and Exchange Commission to create necessary rules and regulations within 360 days of the Act's enactment. It also allows them to prepare for implementation by making rules, conducting studies, and registering or exempting certain parties, but these actions cannot take effect before the Act's specified dates.

The section outlines new rules for digital assets, where certain transactions involving digital assets are exempt from the Securities Act requirements. It dictates specific qualifications for issuers to provide information, requirements to remain transparent to purchasers, and outlines criteria for intermediaries, while also explaining ongoing reporting responsibilities and exemptions from some regulations.

The section outlines the requirements for digital asset issuers and intermediaries involved in digital asset transactions. It specifies the detailed information issuers need to provide to the Commission, ongoing reporting requirements, and conditions for written offers and sales. It also sets registration and qualification standards for intermediaries helping with these transactions, ensuring they are members of a registered national securities association and can verify purchaser qualifications.

The section outlines the rules for selling specific digital assets and commodities, emphasizing that digital assets can be offered on trading systems if certain conditions are met, such as being part of a functional network and publicly available information. It also specifies that related and affiliated persons can only sell these assets after a certain period and under specific reporting requirements, and clarifies that some transactions are not considered investment contracts under securities laws.

This bill section outlines the rules for buying and selling certain digital assets and commodities. It specifies that restricted digital assets can be traded if they are linked with a functioning blockchain and relevant information is public. Affiliated persons face time restrictions before sales and must meet specific conditions. Additionally, certain end user distributions of digital assets are exempt from being treated as investment contracts under securities laws.

The section introduces enhanced disclosure requirements for digital assets, mandating information regarding the source code, transaction history, digital asset economics, development plans, associated risks, and key stakeholders. The disclosures must be certified quarterly to ensure accuracy, with certifications sent to the Commodity Futures Trading Commission and the Securities and Exchange Commission.

The section discusses enhanced disclosure requirements for digital assets and blockchain systems, detailing the need for public information about source code, transaction history, and digital asset economics like launch procedures and governance. It also requires information on development plans, persons affiliated with the blockchain, risk factors, and mandates quarterly certification to relevant authorities that the disclosed information is accurate.

The section outlines a process where individuals can certify to the Securities and Exchange Commission (SEC) that a blockchain system is decentralized. It describes the information needed for certification, allows the SEC to challenge and review these certifications, and includes guidelines for public notifications, possible appeals, and penalties for providing false information.

The section outlines the process by which someone can certify to the Securities and Exchange Commission that a blockchain system is decentralized. It details what must be included in the certification, how long the SEC has to review it, the steps if the certification is challenged, and the penalties for providing false information.

This section explains when the title and its amendments will officially begin to apply. Generally, it will take effect 360 days after the law is put into action unless a rule needs to be made, in which case it will start either 360 days after enactment or 60 days after the final rule is published, whichever is later.

The bill amends several U.S. financial laws to clarify that digital commodities and permitted payment stablecoins are not considered securities or part of securities exchanges. Additionally, it defines digital asset-related terms within these laws, ensuring they are distinct from traditional financial instruments.

The section introduces regulatory measures for "permitted payment stablecoins," aligning the handling of such digital assets with existing securities laws. It grants authority to certain financial entities to trade and hold these stablecoins, while clearly defining the scope of the Commission's jurisdiction over stablecoin transactions without imposing any new operational rules on stablecoin issuers.

The section outlines how permitted payment stablecoins can be handled, specifying that brokers, dealers, and digital asset platforms can trade or hold these stablecoins. It gives a commission the power to oversee such transactions when they occur through these specific financial entities or systems.

The section amends the Securities Exchange Act of 1934 to make it illegal for digital asset trading systems to conduct transactions in restricted digital assets unless they are registered with the Commission. It outlines the process for registration, allows for certain exemptions if a trading system meets specific criteria, and permits registered systems to hold other registrations with the Commission or the Commodity Futures Trading Commission for related activities.

The section outlines the requirements for digital asset trading systems and qualified asset custodians. It specifies how customer assets should be held and mandates custodians to be under supervision from financial authorities. Additionally, it requires trading systems to follow specific rules regarding operations, security, and transparency and treats them as financial institutions under the Bank Secrecy Act.

A digital asset trading system must ensure customer funds are protected and cannot hold them directly, requiring a qualified custodian. It needs to follow rules set by the Commission about notifying changes, displaying orders, ensuring fair access, and maintaining secure and reliable systems. The system is also regarded as a financial institution under the Bank Secrecy Act and should not use "exchange" in its name unless operated by a registered securities exchange.

A digital asset custodian is considered a qualified custodian if it complies with specific requirements, including adequate supervision and regulation by federal or state authorities or foreign governmental bodies. These standards aim to ensure the protection of customers' digital assets by focusing on aspects like asset accessibility, financial resources, and conflict of interest management. Additionally, digital asset custodians must share relevant information with the Commission as required.

This section of the bill outlines the rules for digital asset brokers and dealers to register with the Securities Exchange Commission (SEC), requiring membership in a national securities association unless exempt for a limited time. It allows them to maintain other relevant registrations and aims to avoid unnecessary regulatory overlaps, ensuring fair and efficient markets while considering investor protection.

The section mandates that digital asset brokers and dealers must register with the Commission to legally engage in trading restricted digital assets, unless they operate solely within a single state without using interstate commerce channels. It also outlines that these brokers and dealers must be members of a national securities association, with certain exceptions, and allows them to hold additional registrations for related activities, including with the Commodity Futures Trading Commission.

The section outlines new rules for digital asset brokers and dealers, including preventing fraud, ensuring customer funds are protected and kept separate, meeting capital requirements, and complying with reporting and recordkeeping. It also specifies that these brokers and dealers are considered financial institutions under the Bank Secrecy Act.

The Securities Exchange Act of 1934 is updated to include a new rule, section 10E, which requires digital asset trading platforms, brokers, dealers, and clearing agencies to have written policies to manage conflicts of interest related to their business activities.

Each entity involved in digital asset trading, brokering, or clearing must create and follow written guidelines to help prevent conflicts of interest, especially when dealing with related companies.

The section amends the Securities Act of 1933 to say that certain digital assets, when handled by federally registered intermediaries like digital asset brokers or dealers, are considered "covered securities" and can be exempt from registration requirements. This applies if the digital assets are dealt with through a registered broker or traded on a digital asset trading system.

The new section added to the Securities Exchange Act of 1934 states that people involved in certain activities related to blockchain systems, like maintaining networks or creating software wallets, won't be regulated by this Act just because of those activities. However, this provision doesn't apply when it comes to the government's anti-fraud and anti-manipulation powers.

This section specifies that people involved in "ancillary activities" related to blockchain systems, like validating transactions or maintaining software, aren't subject to the Act just because of those activities. However, this exclusion doesn't apply to situations involving anti-fraud or anti-manipulation actions by the Commission.

The text outlines the amendment to the Securities Exchange Act of 1934, establishing that a person can register as a notice-registered digital asset clearing agency with the Securities and Exchange Commission (SEC) if they are already a registered digital asset broker or dealer, or a bank involved in digital asset businesses. The amendment allows the SEC to adopt new rules on these agencies, but these rules cannot be enforced until 360 days after the enactment of the paragraph.

Banking institutions, including banks and credit unions, are not required to list assets held in custody as liabilities on their balance sheets, except for cash commingled with their own assets. Additionally, they don't need to hold extra capital for these assets unless required to manage operational risks, and they are not liable for obligations related to digital assets they don’t own beyond the expenses recognized in their income statements.

The section states that, unless otherwise specified, the new rules and amendments in the title will start 360 days after the law is enacted. However, if a rulemaking is needed, the effective date will be the later of either 360 days post-enactment or 60 days after the rule is published. Additionally, it limits the Securities and Exchange Commission from depositing registration fees into its Reserve Fund during 2024, 2025, and 2026.

The section outlines amendments to the Commodity Exchange Act regarding the regulation of digital commodities. It grants exclusive jurisdiction to the Commission over digital commodity transactions in interstate commerce, specifies rules for stablecoins, and distinguishes between transactions involving digital and mixed digital assets.

The section updates the Commodity Exchange Act to require futures commission merchants to use qualified digital commodity custodians for holding digital commodities, in addition to the already allowed banks and trust companies.

The amended section of the Commodity Exchange Act outlines new rules for trading digital commodities, requiring entities to certify that these digital assets meet specific legal standards. This includes providing detailed information about the digital commodity and any oversight or changes in its certification, with the Commodity Commission having the ability to disapprove if the requirements are not met.

The section outlines the requirements for digital commodity exchanges to register with the Commodity Futures Trading Commission (CFTC) if they deal in digital commodities, like cryptocurrencies. It specifies that exchanges must comply with certain rules to protect customers, ensure fair trading practices, and maintain adequate financial resources, while also addressing issues like customer asset protection, core principles for exchange operations, and potential exemptions from certain rules.

In this section, the rules for registering and operating digital commodity exchanges are outlined. Any business that wants to trade digital items like cryptocurrencies must register with the relevant authorities, follow specific rules to ensure fair trading and protect customer assets, and adhere to various principles such as transparency and financial stability.

The text outlines new rules for digital commodity custodians, defining them as those who are adequately supervised and regulated by appropriate authorities, such as federal banking agencies or foreign governmental bodies. It also mandates that these custodians share information about customer accounts with the Commission and sets minimum standards for their operation to protect customer's digital commodities.

A qualified digital commodity custodian is defined as an entity that is adequately supervised and regulated, not prohibited from handling digital commodities, and capable of sharing necessary information about customer accounts. The Commission can further define these standards and has the authority to temporarily suspend them if it serves the public interest.

The proposed section amends the Commodity Exchange Act to introduce rules for the registration and regulation of digital commodity brokers and dealers. It sets out requirements for these entities to register with the Commission, maintain records, meet capital and business conduct standards, and ensure customer funds are safeguarded, while also allowing for coordination with other regulatory bodies like the Securities Exchange Commission when necessary.

The section outlines the rules for digital commodity brokers and dealers, requiring them to register with the Commission and adhere to specific standards and regulations to protect customers and ensure fair trading. It includes requirements for capital, recordkeeping, risk management, and customer protections, and it grants the Commission the authority to exempt brokers or dealers if they are supervised comparably by another authority.

Section 407 of the bill amends the Commodity Exchange Act to require that anyone acting as an associate of a digital commodity broker or dealer must be registered with the Commission, and it prohibits brokers and dealers from associating with unregistered individuals. It also updates references in the Act to reflect these changes.

The section amends the Commodity Exchange Act to include digital commodities alongside physical commodities in the rules governing commodity pool operators and commodity trading advisors. It also updates the language to ensure both types of entities are equally recognized in the law.

The section introduces an exclusion from the Commodity Exchange Act for individuals involved in certain "ancillary activities" related to blockchain systems, ensuring they aren't subject to the Act based solely on these activities. However, this exclusion does not extend to issues involving antimanipulation, antifraud, or false reporting enforcement by the Commission.

A person is not subject to this Act just because they engage in certain “ancillary activities” related to blockchain systems, like managing transactions, running a node, or offering services that let users interact with blockchain. However, this exemption does not cover violations related to manipulation, fraud, or false reporting as enforced by the Commission.

The effective date for the changes in this section is 360 days after the law is passed. However, if a new rule needs to be created, it will take effect on whichever is later: 360 days after the law is passed or 60 days after the rule is published in the Federal Register.

The section establishes a new office within the Securities and Exchange Commission called the Strategic Hub for Innovation and Financial Technology (FinHub). FinHub's purpose is to help guide the SEC in responding to technological advancements in the financial sector, educate about financial technology, advise on related regulations, and report annually to Congress on its activities, ensuring confidentiality and secure record-keeping.

The section establishes LabCFTC within the Commodity Futures Trading Commission (CFTC) to encourage and guide financial technology innovation. It outlines LabCFTC's purposes, duties, and requirements for reporting to Congress and mandates the CFTC to provide necessary documents and maintain secure records for LabCFTC's communication with interested parties.

The CFTC and SEC will establish a Joint Advisory Committee on Digital Assets to offer advice on regulatory matters, enhance policy coordination, and explore digital asset implications in financial markets. The committee will include non-federal members from the digital asset sector, meet at least twice a year, and operate without compensation for its members.

The bill mandates that the Commodity Futures Trading Commission and the Securities and Exchange Commission conduct a study on decentralized finance, examining its protocols, benefits, risks, and integration with traditional financial markets. Additionally, the Comptroller General will also carry out a study and both entities must report their findings to Congress within one year of the bill's enactment.

The section mandates the Comptroller General to conduct a detailed study on non-fungible digital assets, analyzing their characteristics, market dynamics, risks, and potential integration with traditional marketplaces. It also requires the Secretary of Commerce to publish a report with the study's findings within a year of the Act's enactment.

The Commodity Futures Trading Commission and the Securities and Exchange Commission are tasked with investigating the current state of financial literacy among digital asset holders and developing ways to improve it. They will examine how well existing efforts are working, especially in rural and minority communities, and explore public-private partnerships to enhance financial knowledge about digital assets. Within one year, a report on their findings will be submitted to congressional committees.

The section mandates a joint study by the Commodity Futures Trading Commission and the Securities and Exchange Commission to determine if new rules are needed to support the development of tokenized securities and derivatives. They must report their findings to specific congressional committees within one year.

Congress acknowledges the importance and potential of digital assets and blockchain technology in building future internet and economic ecosystems. They stress the need for the U.S. to promote these technologies responsibly, create regulatory frameworks to manage their risks and benefits, and prevent the development from moving to less regulated countries.