Lummis, Wyden Introduce Bill to Shield Non‑Custodial Blockchain Developers from Money‑Transmitter Rules
Senator Cynthia Lummis, joined by Senator Ron Wyden, introduced a standalone bill—reviving the Blockchain Regulatory Certainty Act—to clarify that non‑custodial blockchain developers, miners, validators and infrastructure providers who do not control user funds or hold private keys should not be classed as money transmitters. The move precedes a Senate Banking Committee markup of broader crypto legislation, the Digital Asset Market Clarity Act, scheduled for Thursday. The standalone proposal underscores the ‘‘code is not custody’’ principle and aims to limit regulatory liability to entities that control customer assets. Negotiations over the wider Clarity Act remain tense: a leaked draft restricts paying interest solely on stablecoin balances, allowing rewards only for activity such as trading, staking, providing liquidity or governance—language that could favor banks. Senators have 48 hours to file amendments before the markup. Markets reacted mutedly: Bitcoin traded near $92,000 with little immediate impact across broader crypto markets. The bill could materially affect DeFi developer legal exposure and the U.S. regulatory environment, influencing long‑term DeFi innovation and institutional participation depending on whether developer protections survive in the final market‑structure package.
Neutral
The standalone bill explicitly protecting non‑custodial developers reduces legal uncertainty for open‑source and infrastructure contributors, which is positive for DeFi development and could support long‑term innovation and institutional engagement. However, its future inside the broader Digital Asset Market Clarity Act is uncertain—negotiations are active and other provisions (notably limits on paying interest on stablecoin balances) may constrain crypto firms and favor banks. Short term market reaction is muted (BTC near $92k), as the bill is procedural and must survive committee markup and potential amendments. If developer protections survive the final legislation, the long‑term impact is likely bullish for DeFi and developer activity by lowering enforcement risk. Conversely, restrictive stablecoin yield rules or other regulatory burdens in the final package could be bearish for certain centralized crypto firms and yield products. Given these offsetting factors and the procedural uncertainty, the net immediate market impact is neutral, while outcomes could skew bullish (if protections remain) or bearish (if restrictive banking‑friendly provisions prevail) over the medium to long term. Historical parallels: prior safe‑harbor proposals for developers have eased developer participation when passed, while restrictive stablecoin rules (or bank‑friendly wins) have previously pressured crypto lending/yield sectors.