What does Preamble of Digital Asset Market Clarity Act do?

This bill establishes a regulatory system for the offer and sale of digital commodities, involving the Securities and Exchange Commission and the Commodity Futures Trading Commission. The bill amends the Federal Reserve Act to prevent Federal Reserve banks from directly offering certain products or services to individuals. The bill prohibits the use of central bank digital currency for monetary policy purposes.

What does DEFINITIONS UNDER THE COMMODITY EXCHANGE ACT. of Digital Asset Market Clarity Act do?

This section amends the Commodity Exchange Act to define terms related to digital commodities. It redesignates clauses and subclauses within existing definitions to incorporate 'digital commodity'. The Act establishes exclusions from the definition of 'trading in commodity interests' for activities such as acting as a digital commodity custodian, maintaining inventory for commercial purposes, and supporting blockchain operations. New definitions are added, including 'associated person of a digital commodity broker,' 'associated person of a digital commodity dealer,' 'decentralized finance messaging system,' 'decentralized finance trading protocol,' 'digital commodity,' and related terms. The Act prohibits the Federal Reserve Banks from offering financial products or services directly to individuals, maintaining accounts on behalf of individuals, or issuing a central bank digital currency. It also prohibits the Federal Reserve Banks from indirectly issuing a central bank digital currency through intermediaries. The Board of Governors of the Federal Reserve System is prohibited from testing, studying, developing, creating, or implementing a central bank digital currency.

What does DEFINITIONS. of Digital Asset Market Clarity Act do?

This section defines several terms used throughout the Act, primarily related to digital assets and distributed ledger technology. Terms like 'ancillary asset,' 'ancillary asset originator,' and 'network token' are defined by reference to section 4B(a) of the Securities Act of 1933. The 'Bank Secrecy Act' is defined as a combination of specific sections of the Federal Deposit Insurance Act, Public Law 91-508, and Title 31 of the United States Code. The term 'Commission' generally refers to the Securities and Exchange Commission. “Coordinated control” is defined by the Commission through rules adopted under section 104(b). A 'decentralized governance system' is defined as a transparent, rules-based system allowing consensus-building within a distributed ledger system, not controlled by any single entity. The Act clarifies that a decentralized governance system and its participants are treated as separate entities unless under common control or acting in concert. The terms 'digital asset' and 'digital asset service provider' are defined by reference to the GENIUS Act. A 'digital asset intermediary' is a person engaged in digital asset activities required to register with either the Commodity Futures Trading Commission or the Securities and Exchange Commission. The definition of 'digital commodity' references section 1a of the Commodity Exchange Act. A 'distributed ledger' is described as technology sharing data across a network to create a public digital ledger, utilizing cryptography to maintain integrity. The Act defines 'related person' with respect to an ancillary asset originator or asset, outlining specific criteria based on founder status, beneficial ownership, and executive roles. The term 'securities laws' is defined by reference to section 3(a) of the Securities Exchange Act of 1934. A 'smart contract' is defined as a self-executing contract stored on a distributed ledger system that automatically executes transactions based on pre-determined conditions.

What does SHORT TITLE. of Digital Asset Market Clarity Act do?

This bill is formally titled the Lummis-Gillibrand Responsible Financial Innovation Act of 2026.

What does DISCLOSURE REQUIREMENTS FOR CERTAIN TRANSACTIONS INVOLVING of Digital Asset Market Clarity Act do?

This section amends the Securities Act of 1933 by inserting a new section 4B regarding requirements for certain transactions involving ancillary assets. It defines 'ancillary asset' as a network token whose value depends on entrepreneurial or managerial efforts. The term 'ancillary asset originator' is defined based on who initially offers, sells, or distributes the asset, or controls its initial distribution. The legislation outlines specific mechanisms and methods of distribution that qualify as 'gratuitous distribution,' including self-staking, liquid staking, and programmatic distributions. The Commission is required to issue rules regarding the circumstances under which persons jointly and severally considered ancillary asset originators are responsible for disclosures. The Commission must conduct a rulemaking within 360 days of enactment to carry out section 4B.

What does EXEMPTION AND RULEMAKING FOR CERTAIN TRANSACTIONS INVOLVING of Digital Asset Market Clarity Act do?

This section establishes an exemption from registration requirements under the Securities Act of 1933 for certain transactions involving ancillary assets. The exemption applies if the offer, sale, or distribution does not exceed $50,000,000 in gross proceeds per calendar year or 10% of the total dollar value of outstanding ancillary assets. An ancillary asset originator is limited to raising a total of $200,000,000 in gross proceeds under this exemption. The Commission is required to review and adjust these amounts for inflation every two years. Specific conditions apply to the exemption, including initial disclosure requirements under a new section 4B(d) of the Securities Act. The originator must not be a development-stage company without a business plan or intending to merge with an unidentified company, and cannot have a history of certain regulatory actions or convictions. Disclosures furnished to the Commission must be made publicly available. Documents provided under this section are treated as a 'prospectus' and 'statement' for specific purposes, but not as a 'registration statement'.

What does SPECIAL DISPOSITION RESTRICTIONS BY RELATED PERSONS. of Digital Asset Market Clarity Act do?

This section defines terms such as 'certification covered party,' 'covered token,' and 'distributed ledger control person.' The Commission is required to adopt rules to define when a distributed ledger system and related ancillary asset are considered under 'coordinated control.' The Commission must consider factors like whether the system is open-source, permissionless, and credibly neutral when determining coordinated control. The Commission will establish safe harbors to determine when a distributed ledger system is not considered under coordinated control. The Commission is directed to adopt rules restricting the sale of covered tokens by related persons, contingent on certification and holding periods. The Commission must adopt rules for reporting information regarding ancillary asset holdings and transactions by related persons. The rules do not limit the Commission's anti-fraud or anti-manipulation authorities.

What does CHARACTERISTICS OF NETWORK TOKENS. of Digital Asset Market Clarity Act do?

This section defines characteristics that would exempt network tokens from being considered securities under the Securities Act of 1933. The Commission must adopt rules within one year of the Act's enactment to clarify these exemptions. A network token is not a disqualifying financial right if its market value is primarily derived from a distributed ledger system or its adoption and use. Specific mechanisms contributing to this derivation include consideration collection within the system, governance capabilities, value appreciation based on system use, and value appreciation due to the efforts of an ancillary asset originator. Participants in offers or sales of network tokens providing financial interests described in paragraph (1) can still rely on exemptions from registration under section 4B(b) of the Securities Act of 1933. If a court previously ruled a digital asset transaction was not a security, subsequent transfers related to that transaction will not be considered securities. Network tokens are not considered ancillary assets or securities if, as of January 1, 2026, they were the principal asset of an exchange-traded product listed on a national securities exchange and not registered under the Investment Company Act of 1940.

What does EXEMPTIVE AUTHORITY. of Digital Asset Market Clarity Act do?

This section clarifies that the Act does not limit the Securities and Exchange Commission's (Commission) existing authority to grant exemptions. Specifically, the Commission's exemption authority under several existing laws remains unaffected, including sections 28 of the Securities Act of 1933, 36 of the Securities Exchange Act of 1934, 6(c) of the Investment Company Act of 1940, 206A of the Investment Advisers Act of 1940, 304(d) of the Trust Indenture Act of 1939, and 4(g) of the Securities Investor Protection Act of 1970. Section 28 of the Securities Act of 1933 is amended to allow the Commission to grant exemptions 'by rule, regulation, or order'. The Commission is given discretion to determine procedures for granting exemptive orders and to decline to consider applications for such orders.

What does MODERNIZATION OF RECORDKEEPING REQUIREMENTS. of Digital Asset Market Clarity Act do?

This section directs the Commission to adopt rules to modernize recordkeeping requirements. These requirements are under the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, and the Investment Company Act of 1940. The modernization aims to facilitate the use of distributed ledger records.

Back to bills

Digital Asset Market Clarity Act

Last updated: 6/1/2026 · Introduced: 5/29/2025

Author: J. Hill (R-AR)

TL;DR (AI)

The bill establishes a regulatory framework for digital commodities, involving the SEC and CFTC.
It prohibits the Federal Reserve from offering certain financial products directly to individuals and from using central bank digital currency for monetary policy.
The Act creates definitions and exclusions related to digital commodities and ancillary assets under the Commodity Exchange Act.
It mandates disclosure requirements for ancillary asset transactions and establishes exemptions from registration for certain transactions.
The bill requires digital asset intermediaries to adopt risk management standards and comply with anti-money laundering regulations.
It establishes a voluntary cybersecurity program for decentralized finance protocols and mandates educational materials for digital asset customers.
The Act includes provisions for international cooperation to combat illicit finance related to digital assets and requires various studies on the impact of digital assets.

119th Congresspassed houseOfficial page

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