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 owned by 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); and (3) to recognize a liability for any obligations related to activities or services performed with respect to digital commodities that the entity does not own if that liability would exceed the expense recognized in the income statement as a result of the corresponding obligation. 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).