Key Highlights
- Senators Lummis and Wyden introduce BRCA to exempt non-custodial blockchain developers from money transmitter rules.
- The bill aims to clarify legal responsibilities and reduce prosecution risks for developers.
- BRCA could boost US blockchain innovation and is being considered in broader crypto legislation.
US Senators Cynthia Lummis and Ron Wyden have introduced a bipartisan bill aimed at reducing legal uncertainty for blockchain developers who build software but do not handle customer funds.
The proposed legislation, called the Blockchain Regulatory Certainty Act of 2026 (BRCA), seeks to clarify that developers and service providers should not be treated as money transmitters under US law if they never take custody of user assets.
The bill was introduced on Monday as a standalone measure, even as similar language is being debated as part of a broader crypto market structure package in Congress.
Lawmakers say the goal is to draw a clear line between financial intermediaries, such as banks or payment companies, and software developers who only write code or maintain decentralized networks.
In the existing interpretations of the federal and state regulations, developers are worried that they may be criminally or civilly liable depending on the use of their software by third parties.
That fear was heightened by the recent enforcement efforts on crypto-related projects, and it is now unclear whether writing open-source code would subject developers to money transmission regulations.
Why lawmakers say clarity is needed
Senator Lummis said the bill aims to ensure developers can build blockchain-based tools without fear of prosecution for activities that do not involve money laundering or custody risks.
She argued that treating developers as financial institutions “makes no sense” when they never control or access user funds and has contributed to innovation moving outside the US.
Lummis added, “This bill gives our developers the clarity they need to build the future of digital finance without fear of prosecution for activities that pose no money laundering risk. It’s time to stop treating software developers like banks simply because they write code.”
These same concerns were echoed by Senator Wyden who said, “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.”
He said developers who simply create or maintain software should not be forced to comply with rules designed for businesses that actively move or manage money on behalf of others.
The bill states that if a person or entity never handles another individual’s funds, they should not qualify as a money transmitter. Supporters say this clarification would reduce confusion created by older laws that predate blockchain technology.
Background and recent developments
The debate gained urgency following cases involving privacy-focused crypto tools. Last year, Tornado Cash co-founders Roman Storm and Alexey Pertsev were found guilty of operating an unlicensed money-transmitting business linked to the crypto mixing protocol.
That case alarmed developers across the industry, many of whom worry that neutral software tools could expose them to similar charges. At the same time, Congress is working on a wider crypto market structure bill that covers stablecoins, decentralized finance (DeFi), and regulatory oversight.
While that bill includes protections similar to BRCA, lawmakers have warned that provisions can change during committee markups. The Senate Banking Committee is expected to review the broader legislation this week, while the Senate Agriculture Committee has delayed its hearing until late January.
Industry response and potential impact
The BRCA has been welcomed by several crypto advocacy groups who believe that innovation in the US should be defined clearly in the law. However, the bill does not change anti-money laundering rules for custodial platforms or financial firms that directly manage user funds.
The legislation may offer long-awaited legal assurance to developers of non-custodial and decentralized systems in case it passes. Its future, as of now, lies in the ability of the Congress to develop it as a separate bill or integrate it into the bigger crypto regulation framework.
This may determine the balance of innovation, responsibility, and financial regulation of the US, as the use of blockchain technology expands.
Also Read: US Senate Delays CLARITY Act Markup, Casting Doubt on Crypto Rules in 2026
