Summary
Sets up rules for how digital money is bought and sold, and stops the government from creating its own digital dollar.
What problem does this solve?
The rules for digital money are unclear, which makes it risky for people and businesses. This bill creates clear guidelines for digital assets and prevents the government from creating a digital currency that could track spending.
Who does this affect?
- Digital asset companies
- Investors and users of digital assets
- Federal Reserve
What does this bill do?
Reference
Text:
Section:
Sec. 602, 604
Header:
Prohibition on federal reserve banks relating to certain products or services
Prohibits a central bank digital currency (CBDC)
Bans the Federal Reserve from issuing a CBDC, which would be a digital version of the U.S. dollar. Also stops the Fed from using a CBDC to control the economy.
Creates a dual regulation system for digital assets
Splits the job of regulating digital assets between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The SEC oversees assets sold as investments, while the CFTC oversees them once they become commodities.
Defines a path for assets to become commodities
Establishes a process for a digital asset that starts as a security to be reclassified as a commodity. This happens when its underlying blockchain network becomes decentralized and is certified as a 'mature blockchain system'.
Requires registration for crypto exchanges, brokers, and dealers
Mandates that companies acting as digital commodity exchanges, brokers, or dealers register with the CFTC and follow rules for customer protection, financial resources, and preventing fraud.
Protects the right to self-custody
States that individuals have the right to hold their own digital assets in personal hardware or software wallets and to make direct peer-to-peer transactions without an intermediary.
Reference
Text:
Section:
Sec. 109
Header:
Treatment of certain non-controlling blockchain developers
Excludes certain blockchain developers from regulation
Clarifies that people who only create or publish software for a blockchain, or provide infrastructure support, are not treated as money transmitters, protecting them from certain registration requirements.
Applies anti-money laundering laws to crypto companies
Extends the rules of the Bank Secrecy Act to digital commodity brokers, dealers, and exchanges. This requires them to have programs to prevent money laundering and terrorism financing.
Orders studies on crypto-related topics
Requires government agencies to study and report on decentralized finance (DeFi), non-fungible tokens (NFTs), financial literacy for crypto holders, and the use of digital assets in illegal activities.
What is the real world impact?
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Prevents a 'surveillance state'
Bans the Federal Reserve from creating a central bank digital currency (CBDC). Some people worry a CBDC could allow the government to track every purchase an individual makes, creating a powerful tool for surveillance and control over personal finances.
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Provides regulatory clarity for the crypto industry
Creates a clear legal framework for digital assets, which are currently in a gray area between different regulators. This clarity could encourage innovation and investment in the U.S. by giving companies a predictable set of rules to follow.
When does this start?
Most provisions take effect between 270 and 360 days after the bill becomes law, with specific deadlines for government agencies to create new rules.
Reference
Text:
Section:
Sec. 105(d)
Header:
Joint rulemaking, procedures, or guidance for delisting
Joint delisting rules
The SEC and CFTC must jointly issue rules or guidance on how to delist a digital asset within 180 days of the bill becoming law.
Expedited registration process
The CFTC must create an expedited registration process for digital commodity companies within 180 days of the bill becoming law.
Rules for insider sales
The SEC must create rules setting percentage limits on how many digital commodities company insiders can sell within 270 days.
General rulemaking deadline
Unless specified otherwise, the SEC and CFTC must finalize all required rules within 360 days of the bill becoming law.