Financial Innovation and Technology for the 21st Century Act

# Summary of Proposed Digital Assets and Financial Technology Legislation This comprehensive legislation establishes a new regulatory framework for digital assets and financial technology in the United States, creating a balanced approach that promotes innovation while protecting consumers and maintaining market integrity. Key components include: 1. **Digital Asset Regulatory Structure**: - New requirements for digital commodity exchanges, including transparency standards, customer asset protection, and operational safeguards - Qualified digital commodity custodians with specific regulatory requirements - Digital commodity brokers and dealers with registration and operational standards 2. **New Regulatory Bodies**: - FinHub (Strategic Hub for Innovation and Financial Technology) within the SEC to foster responsible innovation - LabCFTC within the CFTC to serve as an information platform for financial technology innovation - CFTC-SEC Joint Advisory Committee on Digital Assets to promote regulatory harmonization 3. **Mandatory Studies**: - Study on decentralized finance (DeFi) examining its nature, risks, benefits, and integration with traditional markets - Study on non-fungible digital assets (NFTs) analyzing their market structure, benefits, and risks - Study on financial market infrastructure improvements to facilitate tokenized securities and derivatives 4. **Modernization of Regulatory Approach**: - Updates to SEC's mission to explicitly include "innovation" alongside "efficiency" - Enhanced information sharing between agencies - Clearer definitions of ancillary activities that don't require full regulatory registration The legislation aims to create a regulatory environment that encourages responsible innovation in digital assets while maintaining market integrity, consumer protection, and financial stability. It establishes a comprehensive framework for regulating digital commodities as a distinct asset class with specific requirements for market participants.