Eight prominent U.S.-based crypto organizations and companies have expressed their support for increased blockchain regulatory clarity through the Blockchain Regulatory Certainty Act (BRCA). This proposal, which has been incorporated into the updated version of the CLARITY Act, aims to address regulatory challenges within the digital asset market structure.

Growing Industry Consensus on Regulatory Clarity

The endorsement of the BRCA underscores a growing consensus within the blockchain industry for clear legal distinctions between custodial financial institutions and non-custodial software developers. A joint statement issued on June 5 by key players such as Coin Center, the DeFi Education Fund, Solana Policy Institute, Uniswap Labs, Jump, Paradigm, and others highlights the importance of this legislative initiative.

Non-Custodial Blockchain Technologies and Exemptions

One of the central arguments from these companies is that developers of peer-to-peer, non-custodial blockchain technologies should not be classified as money transmitters under existing financial regulations. These developers do not manage or control customer funds, making their classification under money transmission laws inappropriate.

The BRCA builds upon a 2019 advisory issued by the Financial Crimes Enforcement Network (FinCEN), which clarified that developers who write code or provide infrastructure without handling user funds should not fall under money transmission laws. By embedding this principle into statutory law, the updated CLARITY Act aims to eliminate legal ambiguities that have hindered innovation in the blockchain sector.

Encouraging Innovation While Protecting Consumers

Supporters of the BRCA emphasize that this regulatory clarity is essential for fostering innovation in decentralized finance (DeFi) and other blockchain-based systems. At the same time, the legislation ensures that custodial entities, which manage user assets, remain subject to regulatory oversight to uphold consumer protections.

The updated bill is viewed as a balanced approach, supporting domestic blockchain development while maintaining robust safeguards for users. Its provisions could significantly benefit U.S.-based blockchain companies by providing a stable regulatory environment and encouraging further innovation.

Recognition of Legislative Efforts

In their joint statement, the supporting organizations expressed gratitude to Chairmen French Hill and Bryan Steil, Majority Whip Tom Emmer, and Representative Ritchie Torres for their leadership in crafting and advancing the legislation. Their efforts are seen as pivotal in addressing long-standing regulatory challenges faced by the blockchain industry.

The Blockchain Regulatory Certainty Act represents a significant step toward creating a clear and supportive regulatory framework for blockchain technologies in the United States. With growing support from industry leaders, the legislation has the potential to pave the way for sustainable growth and innovation in the crypto space.

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