Digital Asset Market Clarity Act

Protects the right of individuals in the United States to hold digital assets in personal software or hardware wallets and conduct peer-to-peer transactions for lawful personal purposes without financial institution intermediaries.

Requires digital commodity brokers, dealers, and exchanges to register with the CFTC under an expedited provisional registration framework and mandates that unregistered entities prominently disclose their unregistered status to customers.

Amends federal securities laws to specify that the definition of an investment contract does not include an investment contract asset that is a digital commodity.

Establishes that secondary market sales of digital commodities by non-issuers and end-user programmatic distributions are not offers or sales of securities.

Excludes digital commodities and permitted payment stablecoins from the statutory definitions of security under major federal securities laws.

Grants the CFTC exclusive regulatory jurisdiction over cash and spot digital commodity transactions on registered trading platforms, while limiting CFTC authority over payment stablecoin operations.

Prohibits Federal Reserve banks and the Federal Reserve Board from directly or indirectly issuing a central bank digital currency (CBDC), offering accounts to individuals, or using a CBDC to conduct monetary policy.

Prohibits digital asset service providers from paying interest or bank-like yield on payment stablecoin balances solely for holding them, subjects violators to civil penalties up to $5,000,000, and allows bona fide activity-based transaction rewards.

Adjusts Community Development Block Grant formula allocations from fiscal year 2028 through 2043 by awarding bonus funds to cities and counties with above-median housing growth and reducing allocations by 10 percent for jurisdictions with below-median housing growth.

Prohibits anyone from structuring transactions to evade classification as a digital commodity issuer, and directs the SEC to establish rules defining administrative and ministerial staking services.

Directs the SEC and CFTC to jointly issue rules defining key digital asset and blockchain terms, as well as rules governing mixed digital asset transactions.

Directs the SEC and CFTC to jointly establish delisting processes for digital assets and rules enabling portfolio margining across securities, futures, swaps, and digital commodities accounts.

Directs federal banking agencies to develop risk-based and leverage capital requirements for supervised banks regarding multi-transaction netting agreements in counterparty defaults.

Applies Commodity Exchange Act trade practice and fraud prohibitions to contracts of sale of digital commodities.

Excludes non-controlling blockchain developers, self-custody wallet software providers, and infrastructure providers from being classified or regulated as money transmitters under federal or state law.

Expands the Bank Secrecy Act to cover digital commodity brokers, dealers, and direct-access exchanges, requiring them to establish anti-money laundering programs and comply with federal sanctions.

Prohibits members of Congress and senior executive branch officials from issuing digital commodities during their public service.

Creates a registration exemption under the Securities Act of 1933 allowing digital commodity issuers to raise up to $50 million annually in investment contract sales, subject to SEC disclosure filings and blockchain maturity plans.

Restricts sales of digital commodities by affiliated and related persons of issuers by imposing holding periods, volume caps, anti-fraud standards, and reporting requirements.

Establishes a process and statutory criteria for digital commodity issuers and exchanges to certify to the SEC that a blockchain system is decentralized and mature.

Prohibits manipulative and deceptive trading devices in permitted payment stablecoins and digital commodities brokered or traded through SEC-registered brokers, dealers, and exchanges.

Bars the SEC from denying exchange registration exemptions to trading platforms solely because they facilitate trading in both securities and digital commodities or stablecoins.

Requires dual-registered SEC and CFTC entities to maintain conflict-of-interest policies and directs the SEC and CFTC to enter into an agreement eliminating duplicative oversight.

Authorizes regulated brokers, dealers, exchanges, transfer agents, and investment advisers to use blockchain records to fulfill statutory books and records requirements.

Expands the SEC's general exemptive authority under the Securities Act of 1933 to include exemptive orders.

Permits SEC-registered broker-dealers, national securities exchanges, and alternative trading systems to dually register with the CFTC as digital commodity brokers, dealers, or exchanges.

Preempts state securities registration requirements for digital commodities by treating them as covered securities.

Exempts persons engaging in decentralized finance activities, mining, node operations, and non-custodial software creation from regulation under the Securities Exchange Act of 1934, while preserving SEC anti-fraud authority.

Prohibits federal financial regulators from requiring banks, credit unions, and broker-dealers to record custodied digital assets on their balance sheets as liabilities or hold regulatory capital against them, except for operational risk.

Requires registered broker-dealers to provide written disclosures to customers explaining the bankruptcy and liquidation treatment of digital commodities and stablecoins compared to cash and securities.

Authorizes national banks, bank holding companies, and insured state banks to provide digital asset custody and utilize blockchain systems for lawful banking activities.

Requires registered entities trading digital commodities to provide public educational materials regarding blockchain risks, market differences, and fraud recognition.

Reduces the Federal Reserve surplus fund statutory cap by $15 million, effective September 30, 2035.

Requires futures commission merchants holding customer digital assets to store those assets with qualified digital asset custodians.

Establishes procedures for registered entities to certify and list digital commodities for cash and spot trading, and sets deadlines for CFTC review and approval.

Establishes registration rules, core operational principles, anti-conflict standards, and customer asset segregation requirements for digital commodity exchanges.

Defines supervisory standards and qualification requirements for qualified digital asset custodians holding customer assets.

Establishes registration, capital, reporting, business conduct, risk management, and customer fund segregation rules for digital commodity brokers and dealers.

Requires associated persons of digital commodity brokers and dealers to register with the CFTC.

Directs the CFTC to provide regulatory exemptions for commodity pool operators and commodity trading advisors active in spot digital commodities.

Exempts decentralized finance software developers, node operators, validators, and non-custodial wallet creators from CFTC registration and regulation, while maintaining anti-fraud authorities.

Authorizes the CFTC to assess fees on provisional registrants, hire specialized market personnel under excepted service rules, and sunsets these authorities after four fiscal years.

Requires blockchain control persons of mature blockchain systems to file notice with the CFTC and execute digital commodity sales through registered brokers.

Regulates trading in other digital assets on CFTC-registered platforms and prohibits trading assets whose primary purpose is fraud, market manipulation, or ethics violations.

Directs the CFTC to issue rules addressing and mitigating conflicts of interest across registered entities, including vertically integrated market participants.

Directs the SEC to establish the Strategic Hub for Innovation and Financial Technology (FinHub) to interface with emerging financial technology market participants.

Formally establishes LabCFTC within the CFTC to promote responsible financial technology innovation and engage with innovators.

Directs federal agencies and the GAO to conduct comprehensive studies and submit reports on decentralized finance, non-fungible tokens, financial literacy, tokenized securities, illicit finance, foreign adversary ownership, and blockchain payment use cases.

Amends the GENIUS Act to require monthly CPA examinations and executive certifications for payment stablecoins, prohibit non-financial commercial firms from controlling payment stablecoin issuers, clarify state regulation of commodity-backed stablecoins, and affirm self-custody rights.

Establishes initial and semiannual disclosure requirements for ancillary asset originators under the Securities Act of 1933 and creates a certification procedure to confirm non-security status.

Directs the SEC to adopt Regulation Crypto to exempt offerings of investment contracts involving ancillary assets up to $50 million annually and $200 million total from securities registration.

Establishes holding periods, volume restrictions, reporting obligations, and profit disgorgement rules for sales of ancillary assets by related persons and control persons.

Clarifies that network tokens deriving value from distributed ledgers are non-securities and grandfathers digital assets underlying spot exchange-traded products listed prior to 2026.

Directs the SEC to modernize recordkeeping and tailor regulations for digital assets, while preempting state registration requirements for network tokens and Regulation Crypto offerings.

Applies federal insider trading laws to primary offerings, sales, and purchases of ancillary assets involving material nonpublic information.

Amends the Securities Investor Protection Act to exclude digital commodities from the definition of security.

Directs FinCEN and federal regulators to apply Bank Secrecy Act AML/CFT standards and coordinated examination procedures to digital commodity brokers, dealers, and exchanges.

Establishes a 5-year public-private pilot information-sharing program between federal law enforcement, financial agencies, and designated digital asset and banking entities to detect illicit finance.

Establishes the Independent Financial Technology Working Group to Combat Terrorism, Narcotics Trafficking, and Illicit Financing to research illicit digital asset usage and propose legislation.

Regulates digital asset kiosks (crypto ATMs) under the Bank Secrecy Act by requiring operator registration, physical address reporting, fraud disclosures, transaction receipts, 72-hour hold periods for new customer transfers, a $3,500 daily limit, and fee refund procedures for fraud victims.

Directs the SEC and Treasury to adopt tailored rules clarifying securities and Bank Secrecy Act compliance for persons who control non-decentralized finance trading protocols.

Directs the Treasury Department to issue guidance on economic sanctions and AML/CFT compliance screening for operators of distributed ledger messaging systems.

Authorizes the Secretary of the Treasury to prohibit or place conditions on domestic financial transmittals involving foreign entities or jurisdictions of primary money laundering concern in digital assets.

Requires the Treasury Department to submit recurring reports assessing illicit finance risks and controls associated with U.S.-dependent offshore stablecoins.

Protects digital asset service providers and stablecoin issuers from civil liability when voluntarily placing temporary holds on transactions suspected of illicit activity or in response to law enforcement requests.

Directs NIST to establish a voluntary program for evaluating and recognizing the adoption of cybersecurity standards by decentralized finance developers and protocols.

Includes digital assets within the definition of monetary instruments under the Bank Secrecy Act and directs Treasury to analyze self-hosted wallet illicit finance risks without mandating collection of non-customer personal data.

Requires digital asset intermediaries to perform risk analysis, customer disclosures, and transaction screening before routing or executing trades through decentralized finance trading protocols.

Directs federal agencies to study and report on crypto mixers, foreign non-compliant intermediaries, adversary government surveillance, smart contract cybersecurity, and financial stability risks of DeFi credit.

Authorizes financial holding companies, national banks, state banks, and federal credit unions to engage in digital asset custody, staking, lending, payment processing, node operations, and customer-driven market-making.

Directs the SEC and CFTC to issue joint rules facilitating portfolio margining across securities, futures, and digital commodities, and directs banking agencies to develop related capital netting rules.

Bar SIPC from advancing funds to cover net equity claims for digital commodities or swaps held in expanded securities portfolio margin accounts.

Establishes the CFTC-SEC Micro-Innovation Sandbox allowing eligible small entities to test novel financial products and services with temporary, conditional regulatory exemptions.

Directs federal financial regulators to promote international regulatory harmonization, study automated code-based compliance tools, and report periodically on bill implementation.

Establishes that tokenized securities are regulated under existing securities laws as the underlying securities they represent while allowing tailored operational adjustments.

Directs NIST to promote voluntary industry adoption and deployment of post-quantum cryptography standards across digital asset infrastructure.

Directs the Treasury Department to lead an interagency initiative and submit a National Strategy to Combat International Digital Asset Illicit Finance.

Directs federal financial regulatory agencies to establish AI Innovation Labs permitting regulated entities to test artificial intelligence financial products under alternative compliance strategies.

Exempts software developers, node operators, validators, and non-custodial wallet developers from regulation under the Securities Act of 1933 and the Securities Exchange Act of 1934.

Establishes a safe harbor providing that non-fungible tokens (NFTs) serving non-investment use cases are not securities, and directs the GAO to conduct a comprehensive study on NFTs.

Excludes non-controlling blockchain developers, software publishers, and infrastructure providers from federal and state money transmitter regulations.

Prohibits federal agencies from restricting individuals from using self-hosted wallets to self-custody digital assets for lawful personal purposes.

Amends the Bankruptcy Code to treat customer-held digital commodities and ancillary assets as protected customer property and provides safe harbor bankruptcy protections for digital commodity transactions.

Requires public digital asset education, preserves FTC consumer protection jurisdiction over consumer tokens, mandates a joint financial literacy study, and requires broker-dealer insolvency disclosures.

Establishes the Joint Advisory Committee on Digital Assets to advise the SEC and CFTC and mandates an interagency memorandum of understanding on supervision and enforcement.

Authorizes $30,000,000 annually for FinCEN from fiscal year 2026 through 2030 for digital asset enforcement and authorizes up to a 20 percent incentive pay premium for specialized personnel.