Top Summary
This section of the US bill, titled "Treatment of custody activities by banking institutions," prohibits federal and state banking regulators, as well as the Securities and Exchange Commission, from requiring financial institutions such as banks, credit unions, brokers, and dealers to account for assets held in custody—such as digital commodities or stablecoins—as liabilities on their financial statements or to hold regulatory capital against such assets, except to the extent necessary to mitigate operational risks associated with custody services, as determined by relevant regulatory authorities. Definitions for key terms are provided in accordance with existing federal banking and credit union laws.
Original Bill Text:
SEC. 310.Treatment of custody activities by banking institutions.
(a) Treatment of custody activities.—The appropriate Federal banking agency, the National Credit Union Administration (in the case of a credit union), and the Securities and Exchange Commission may not require a depository institution, national bank, Federal credit union, State credit union, trust company, broker, or dealer, or any affiliate thereof (the “entity”)—
(1) to include assets held in custody that are not accounted for as assets of the entity as a liability on the financial statement or balance sheet of the entity, including digital commodity or permitted payment stablecoin custody or safekeeping services; and
(2) to hold regulatory capital against assets, including reserves backing such assets, in custody or safekeeping, except as necessary to mitigate against operational risks inherent with the custody or safekeeping services, as determined by—
(A) the appropriate Federal banking agency;
(B) the National Credit Union Administration (in the case of a credit union);
(C) a State bank supervisor;
(D) a State credit union supervisor (as defined in section 6003 of the Anti-Money Laundering Act of 2020 (31 U.S.C. 5311 note)); or
(E) the Securities and Exchange Commission (in the case of a broker or dealer).
(b) Definitions.—In this section:
(1) BANKING TERMS.—The terms “appropriate Federal banking agency”, “depository institution”, “national bank”, and “State bank supervisor” have the meaning given those terms, respectively, under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813).
(2) CREDIT UNION TERMS.—The terms “Federal credit union” and “State credit union” have the meaning given those terms, respectively, under section 101 of the Federal Credit Union Act (12 U.S.C. 1752).