KEY FACTS: U.S. Senators Cynthia Lummis (R-WY) and Ron Wyden (D-OR) introduced the bipartisan Blockchain Regulatory Certainty Act (BRCA) on January 12, 2026, as standalone legislation aimed at providing crucial regulatory clarity to the cryptocurrency industry. The bill seeks to exempt blockchain developers, software publishers, and service providers from federal and state money transmitter regulations, as well as related licensing and registration requirements, when they do not directly handle, control, access, or custody user funds. This addresses long-standing concerns highlighted by enforcement actions, such as the convictions of Tornado Cash co-founders for operating an unlicensed money-transmitting business despite the protocol's non-custodial design. Senator Lummis emphasized that treating code writers and open-source maintainers like traditional financial intermediaries has stifled innovation, driven talent offshore, and created conflicting state rules, while Senator Wyden criticized the approach as technologically misguided and potentially harmful to privacy and free speech. The measure clarifies protections for activities like developing distributed ledger software, maintaining blockchain networks, offering self-custody solutions, and providing supporting infrastructure.
Senator Lummis
U.S. Senators Introduce Blockchain Regulatory Certainty Act to Protect Blockchain Developers & Boost Innovation
U.S. Senators Cynthia Lummis (R-WY) and Ron Wyden (D-OR) have introduced the Blockchain Regulatory Certainty Act (BRCA). This standalone bipartisan legislation, unveiled on Monday, seeks to protect software developers and service providers in the blockchain space from being classified as money transmitters under federal and state laws, as long as they do not directly handle, control, or have access to user funds.
The bill addresses a long-standing concern within the crypto community, being the risk that individuals who simply write code, publish open-source software, or maintain decentralized networks could face criminal liability or burdensome licensing requirements typically reserved for traditional financial intermediaries. This uncertainty has been highlighted by high-profile enforcement actions, most notably the convictions related to the privacy protocol Tornado Cash. Last year, co-founders Roman Storm and Alexey Pertsev were found guilty of operating an unlicensed money-transmitting business, even though the protocol was designed as non-custodial software that did not hold user funds. Senator Cynthia Lummis emphasized the urgency of the issue in her statement:
“Blockchain developers who have simply written code and maintain open-source infrastructure have lived under threat of being classified as money transmitters for far too long. This designation makes no sense when they never touch, control, or have access to user funds, and unnecessarily limits innovation.”
Lummis further noted that the current regulatory environment has “driven innovation offshore and subjected [developers] to conflicting state regulations.” The BRCA aims to deliver the legal certainty needed for developers to “build the future of digital finance without fear of prosecution for activities that pose no money laundering risk.”
The Blockchain Regulatory Certainty Act clarifies that activities such as developing or publishing software for distributed ledger technology, maintaining blockchain networks, providing self-custody solutions, or offering supporting infrastructure do not trigger money transmitter obligations, provided the entities involved exercise no unilateral control over users' digital assets. The bill establishes a clear "non-controlling" threshold to distinguish these developers from custodial services that do manage funds.
Similar protections for developers have been included in the cryptocurrency market structure legislation, which is advancing through Congress. The Senate Banking Committee is scheduled for a markup on the market structure bill this Thursday, while the Senate Agriculture Committee has delayed its related hearing until the last week of January. However, provisions in these larger drafts are not guaranteed and could be amended, diluted, or removed during the legislative process.
The introduction of the BRCA as a standalone bill shows the bipartisan priority placed on developer protections. Industry groups have quickly rallied in support, viewing it as essential for keeping innovation within U.S. borders.
The DeFi Education Fund praised the measure, stating that it provides critical protections for software developers of non-custodial, decentralized technologies, while urging Congressional leaders to incorporate the BRCA into the comprehensive market structure legislation. The Blockchain Association, Alexander Grieve, Vice President of Government Affairs, and others have lent their voices to praise the bill.
The push for these protections builds on years of advocacy, with earlier versions of the BRCA introduced in the House of Representatives (including by figures like Rep. Tom Emmer) and integrated into bills like the Digital Asset Market Clarity Act (CLARITY Act). A coalition of over 100 crypto companies, including major players like Coinbase, Kraken, and Ripple, has previously called for robust federal safeguards to prevent misclassification under outdated financial rules.
If enacted, the BRCA would represent a major step toward a more innovation-friendly regulatory environment in the United States, potentially reversing the trend of developers relocating abroad due to legal risks. The bill's introduction signals growing momentum for balanced regulation that fosters technological advancement while addressing concerns around illicit finance.
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