Legislation on Blockchain Assurance: Introduced to shield software developers working on blockchain technology
The Blockchain Regulatory Certainty Act (BRCA), a significant legislative effort aimed at providing legal clarity for blockchain developers, has been reintroduced in the United States Congress. Sponsored by Representatives Tom Emmer and Ritchie Torres, this bipartisan initiative is considered a milestone for the tech and crypto community.
The BRCA is designed to overcome years of uncertainty that have hindered technological adoption and regulatory fragmentation among states. It seeks to establish a legal framework that protects innovators, fosters technological growth, and ensures global competitiveness in the blockchain technology and crypto asset sector.
One of the key objectives of the BRCA is to address regulatory uncertainty, particularly around money transmission laws and the application of the Bank Secrecy Act (BSA) to blockchain developers and cryptocurrency services. These compliance challenges and legal risks create barriers for innovators in the blockchain space.
The BRCA intends to explicitly distinguish blockchain developers from money transmitters, which could help alleviate these obstacles for open-source code developers and Decentralized Finance (DeFi) projects. By providing a clearer regulatory taxonomy for various categories of crypto assets, the BRCA aims to avoid overbroad and outdated regulatory treatment that hampers innovation.
Moreover, the BRCA seeks to modernize and tailor Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations to digital assets. It defines which actors fall under compliance obligations, offering clear legal definitions and boundaries for blockchain developers.
Representative Emmer stated that non-custodial digital wallet developers, node operators, and miners will not be considered money transmitters under the BRCA, recognizing their technical and non-fiduciary role. This distinction is crucial in creating a "safe harbor" for non-custodial blockchain developers and service providers, allowing them to continue innovating without fear of sanctions or unfair legal proceedings.
The BRCA also aims to implement risk-based, technology-appropriate regulatory approaches rather than blanket rules, acknowledging permissionless blockchain technologies and evolving market needs. This approach is expected to provide a more conducive environment for innovation and growth in the blockchain sector.
The backing of key industry organizations like the Blockchain Association and Coin Center underscores the importance of a legal framework that keeps the United States a global leader in blockchain technology. The lack of a clear distinction between developers and money transmitters has imposed inappropriate legal burdens that threaten to drive innovation to more flexible jurisdictions.
The reintroduction of the BRCA is a significant step towards creating a favorable environment for innovative projects, especially in decentralized finance (DeFi), to develop without excessive legal obstacles. The BRCA complements other laws like the GENIUS Act, designed to strengthen a coherent regulatory ecosystem for cryptocurrencies.
Representative Torres emphasized that the BRCA is essential to make the United States a global hub for responsible innovation in blockchain technology. By providing legal certainty for blockchain developers, the BRCA argues that the nation can maintain its technological supremacy and attract investment, ultimately helping it remain a leader in the global digital economy.
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