U.S. Senators Ron Wyden (D-OR) and Cynthia Lummis (R-WY) have introduced the Blockchain Regulatory Certainty Act (BRCA), a bipartisan bill aimed at providing clarity for cryptocurrency developers and infrastructure providers. The bill seeks to establish clear federal standards, particularly concerning the classification of software developers and infrastructure providers under money transmitter laws. The BRCA specifies that developers and providers who do not control user funds will not be classified as money transmitters.
The senators assert that current crypto regulations create ambiguity for developers, stifling innovation and potentially driving projects overseas due to conflicting state-level rules. By distinguishing between custodial financial intermediaries and non-custodial software or infrastructure roles, the bill aims to encourage responsible development while enabling authorities to regulate the actual handling of user funds.
Senator Lummis emphasized the challenges faced by blockchain developers, stating that those who simply write code and maintain open-source infrastructure have been under the threat of being classified as money transmitters for too long. She believes this designation is illogical when developers do not have access to user funds and unnecessarily limits innovation. Lummis added that the bill is designed to give builders the certainty to advance digital finance without fear of legal exposure for activities that do not present a money laundering risk.
Senator Wyden echoed these concerns, arguing that imposing the same regulatory requirements on developers as those applied to exchanges or brokers is fundamentally flawed. He stated that forcing developers who write code to follow the same rules as exchanges or brokers is technologically illiterate and a recipe for violating Americans' privacy and free speech rights.
The BRCA defines a "non-controlling developer or provider" as an entity that develops or maintains distributed ledger technology but lacks the unilateral authority to initiate or execute transactions involving users' digital assets without third-party consent. Protected activities under the bill include the development or publication of software for distributed ledgers, maintenance services for blockchain networks, offering customer self-custody solutions, and providing necessary infrastructure to support distributed ledger services.
The bill's provisions were previously introduced in the House and included in the Crypto-Asset National Security Enhancement and Enforcement (CLARITY) Act. The BRCA is currently being discussed for inclusion in the Senate's negotiations on a market structure bill. The Senate Banking Committee is moving towards a hearing to amend and vote on broader legislation to regulate the crypto industry.
This legislative effort follows years of fragmented regulatory approaches from multiple agencies, including the SEC, CFTC, and Treasury. The Blockchain Regulatory Certainty Act specifically targets fundamental aspects of blockchain technology that have faced regulatory uncertainty, explicitly protecting developers' rights to write and publish code and safeguarding individuals' rights to self-custody their digital assets.
