Bipartisan US Senate bill seeks regulatory clarity for crypto developers, aiming to protect innovation while excluding non-custodial builders from transmitter rules.
US lawmakers have proposed new legislation addressing long-standing regulatory uncertainty facing crypto developers nationwide. The move is part of the growing concern about innovation constraints within digital asset markets.
US Senate Advances Crypto Developer Protection Framework
US Senators Cynthia Lummis and Ron Wyden introduced the Blockchain Regulatory Certainty Act on January 12, 2026. As a result, the bill aims to exempt some crypto developers from the money transmitter rules. In particular, it focuses on developers who never process or have access to user funds.
For years, blockchain developers have faced an impossible choice: stop building or risk prosecution as “money transmitters” even when they never control $$$. This regulatory confusion has driven American innovation overseas. The Blockchain Regulatory Certainty Act fixes that
— Senator Cynthia Lummis (@SenLummis) January 13, 2026
According to the proposal, the creation of writing computer software or the maintenance of the blockchain networks must not generate any licensing obligations. Therefore, federal and state money transfer rules would not apply. Lawmakers say such clarity is still critical to sustainable crypto innovation.
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Crypto developers have pointed out concerns for criminal liability for third-party software use. Some projects, as a result, moved offshore to mitigate regulatory risk. Lawmakers are now seeking to fill in these unintended consequences directly.
Senator Lummis said developers have been under prolonged regulatory threats even though they have no custody roles. She argued that the money transmitter label restricts innovation without minimizing the risk of money laundering.
Senator Wyden highlighted privacy and free speech implications to developers. He said that forcing code writers to abide by rules of exchange reflects technological misunderstanding. As a result, the legislation divides infrastructure development from custodial financial activity.
The bill defines developers who do not have unilateral control over assets not to be money transmitters. This distinction is the fundamental legal clarification. Further, it is applicable across federal regulatory interpretations.
Protected activities are the development of blockchain software and the maintenance of decentralized networks. In addition, the bill covers self-custody tools and infrastructure services. Lawmakers believe that these functions have a minimum of financial risk.
The Blockchain Regulatory Certainty Act comes amid increased enforcement actions. Previously, prosecutions were based on non-custodial protocols and were alarming to developers. Therefore, the bill is a direct response to industry concerns.
Bipartisan Crypto Bill Targets Innovation and Legal Clarity
The legislation has a Republican and a Democrat as co-sponsors. Consequently, it shows uncommon bipartisan alignment on crypto policy. Observers consider this cooperation to be of strategic importance.
The bill is currently standing as standalone legislation in the Senate. However, it may be brought into broader market structure proposals. Negotiations on final legislative packaging are ongoing.
Industry participants have welcomed sharper lines between developers and financial intermediaries. Therefore, the bill could minimize the uncertainty in compliance. Reduced risk may spur domestic blockchain development.
The proposal also wants to preserve US competitiveness in the field of digital finance. Lawmakers cited losses of innovation because of regulatory ambiguity. As such, the bill aims to retain talent and investment in the country.
Importantly, the bill does not put any restriction on the regulation of crypto exchanges or brokers. Wyden stressed continued enforcement of tax and trading rules. Thus, the legislation is aimed at narrowing the scope, not weakening oversight.
The measure also bolsters the notion of technology neutrality. Lawmakers believe regulation should focus not on code creation, but on function. This framework reflects past internet policy approaches.
The future of the bill is hinged on wider Senate talks. Nonetheless, its introduction is a step forward in terms of more clarity in crypto regulation. Ultimately, lawmakers show openness to changing rules for new financial technologies.
Source: https://www.livebitcoinnews.com/us-senators-introduce-bill-to-protect-crypto-developers/