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H.R. 4741: Digital Asset Market Structure and Investor Protection Act

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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Jul 28, 2021.

Digital Asset Market Structure and Investor Protection Act

This bill generally addresses the regulatory treatment of digital assets and digital asset securities.

The bill grants the Commodities Futures Trading Commission authority over digital assets, which (1) are created electronically or digitally through software code; (2) are programmed with rules that govern the creation, supply, ownership, use, and transfer of the asset; (3) have a secure transaction history; and (4) are capable of being transferred through a decentralized method without an intermediate custodian.

Additionally, the bill grants the Securities and Exchange Commission authority over the regulation of digital asset securities, digital assets that provide the holder with (1) equity or debt interest in the issuer, (2) rights to certain payments from the issuer, (3) voting rights in the major corporate actions of the issuer, or (4) liquidation rights in the event of the issuer's liquidation.

Digital assets and digital asset securities are subject to the Bank Secrecy Act for anti-money laundering, reporting, and recordkeeping purposes.

The Board of Governors of the Federal Reserve System may issue digital currency. However, digital assets, digital asset securities, and fiat-based stablecoins (a digital asset pegged to the U.S. dollar or other fiat currency) are not U.S. legal tender. Digital asset fiat-based stablecoins must be registered with and approved by the Department of the Treasury.

Digital assets shall not be covered by the Federal Deposit Insurance Corporation and the National Credit Union Administration depository insurance.

The Financial Crimes Enforcement Network must issue rules regarding the use of anonymizing services and other anonymity-enhanced convertible virtual currency services.