0
Financial Innovation and Technology for the 21st Century Act
10/4/2024, 7:57 PM
Summary of Bill HR 4763
Key provisions of the bill include the establishment of a regulatory sandbox, which allows financial technology (fintech) companies to test new products and services in a controlled environment without facing full regulatory compliance. This is intended to encourage innovation and foster the development of new financial technologies.
Additionally, the bill seeks to streamline the regulatory process for fintech companies, making it easier for them to navigate the complex regulatory landscape. This includes provisions for regulatory harmonization and coordination between federal and state agencies, as well as the creation of a fintech advisory council to provide guidance and support to the industry. Overall, the Financial Innovation and Technology for the 21st Century Act aims to promote innovation and technological advancements in the financial sector, while also ensuring consumer protection and regulatory compliance. It is seen as a step towards modernizing the financial industry and keeping pace with the rapidly evolving technological landscape.
Congressional Summary of HR 4763
Financial Innovation and Technology for the 21st Century Act
This bill establishes a regulatory framework for digital assets.
The Commodity Futures Trading Commission (CFTC) must regulate a digital asset as a commodity if the blockchain, or digital ledger, on which it runs is functional and decentralized. The bill classifies a blockchain as decentralized if, among other requirements, no person has unilateral authority to control the blockchain or its usage, and no issuer or affiliated person has control of 20% or more of the digital asset or the voting power of the digital asset. In addition, the bill provides the CFTC with exclusive regulatory authority over cash or spot markets for digital commodities.
The Securities and Exchange Commission (SEC) must regulate a digital asset as a security if its associated blockchain is functional but not decentralized. However, the bill establishes certain exceptions to SEC regulation for digital assets that limit annual sales, restrict nonaccredited investor access, and satisfy disclosure and compliance requirements. The bill also sets forth requirements for primary and secondary market transactions.
The CFTC and SEC must jointly issue rules to define terms and exempt dually registered exchanges from duplicative rules.
