Coin Center is encouraged by the advancement of the Clarity Act through the Senate Banking Committee with the Blockchain Regulatory Certainty Act (BRCA) included and not undermined by ill-conceived amendments. However, with limited bipartisan support, there may be a push to make further concessions; the BRCA cannot be one of them.
The BRCA
As a reminder, the BRCA explicitly protects blockchain developers and service providers that do not have control over user assets from being considered “money transmitters” for purposes of regulatory licensure and potential criminal liability. The purpose of the BRCA is to prevent what has already happened several times in the past: aggressive regulators and prosecutors broadly interpreting money transmission laws to target developers of blockchain tools.
What happened today?
A bipartisan group of senators voted in favor of advancing the Clarity Act with the core provisions of the BRCA intact. An amendment offered by Senator Catherine Cortez-Masto (D-NV) would have gutted these provisions but it was not considered or voted on in the markup.
Another amendment from Senator Cynthia Lummis (R-WY) was adopted and changed how the BRCA is referenced within Section 301 of the bill. For background, §301 calls on Treasury and the Securities and Exchange Commission (SEC) to address the regulatory obligations of individuals operating “non-decentralized finance trading protocols” that act as securities intermediaries. In order to gain wider support, the Lummis amendment removed recently added language that cross-referenced the BRCA in order to exempt non-controlling developers and service providers from §301.
Even with that language removed, §301 still contains robust developer protections. Most notably, the section is premised on a meaningful distinction between decentralized protocols and “non-decentralized” protocols in which a group of persons under common control have the ability to alter the protocol or restrict access. In other words, the section is designed to apply to actors doing more than simply developing and publishing permissionless and neutral software protocols for exchanging assets. We are still awaiting the final full amendment text but have discussed various edits since January and have assurances that those edits maintain the essential components of the previous draft.
It is also important to note that securities laws and money transmission laws address different kinds of conduct. Securities broker-dealer regulation generally applies to persons acting in a position of trust to facilitate securities transactions for customers, even when customer assets are custodied elsewhere. By contrast, money transmission laws are premised on an intermediary accepting and transmitting customer funds, which necessarily involves taking control of those assets.
Coin Center’s position
The BRCA remains necessary to clarify that a money transmitter is someone who takes control of a customer’s assets, and that blockchain developers who never exercise such control should not face the threat of criminal liability under money transmission laws. That is why the BRCA has long been Coin Center’s top legislative priority, and why we are pleased to see it remain part of the market structure bill advancing to the Senate floor.
Separately, we also believe it is important to protect developers from overbroad applications of the securities laws. Dating back to the initial draft of Clarity that nearly came up for markup in January 2026, we have supported the general framework embodied in §301. As we said at the time:
“Coin Center generally supports this decentralized versus centralized framework as a clear and principled way to distinguish regulated intermediary activity from protected software publication and network participation.”
At the time, we identified a few remaining concerns with that section that senators addressed to our satisfaction in the version that passed today. Therefore, our support is not compromised by the amendment removing the BRCA cross-reference from §301, because we do not believe the BRCA itself is necessary to resolve securities law questions addressed elsewhere in the bill. Indeed, we are comfortable with said removal if that is the sticking point for senators who would otherwise pass Clarity with strong BRCA protections preserved.
What remains is a workable and principled compromise. The BRCA continues to provide critical protections against misuse of money transmission laws by the DOJ and financial regulators, while §301 preserves meaningful protections for truly decentralized developers without abandoning longstanding securities law principles applicable to intermediaries acting in positions of trust.
The legislative process is not over, and there will undoubtedly be more debate before the Senate votes on final passage. But today’s outcome preserves the core protections Coin Center has fought for from the beginning.
A final concern
The narrow support from democrats and the potential for some stakeholders to abandon developer protections in favor of their own interests make Coin Center very concerned that last-minute negotiations on the floor could strip the BRCA’s developer protections from the bill right at the time of passage.
To stop that, we will soon be asking many in Congress and industry to commit to rejecting such a bad compromise. Otherwise, we risk sacrificing neutral developers on the altar of big crypto business regulation.
Senator Lummis commented at the hearing about companies and developers going overseas. These comments were not just about jobs or growth. More fundamentally, developers based in the US imbue these protocols with American values of autonomy and privacy. If we don’t protect devs and regulate trusted companies we give up our sovereignty. As the Senator expressed, Bitcoin allows the victims of oppressive regimes to walk away from their tyrants with their assets in their head. Nothing could matter more to American interests at home and abroad. And that vision is only safe if the BRCA is safe on the Senate floor.