The US Congress is preparing a new DeFi-oriented bill to protect developers

Two high-ranking figures in American legislation—Senators Cynthia Lummis and Ron Wyden—introduced a bipartisan initiative aimed at fundamentally changing the legal status of DeFi developers. The Blockchain Regulatory Certainty Act is designed to draw a clear line between software creators and financial intermediaries, protecting the former from unwarranted criminal prosecution.

This bill is seen as a potential turning point for the cryptocurrency industry. Once enacted, developers will be able to work on innovative solutions in the blockchain space without fear of facing legal action for their contributions to the technology.

Why developers need protection: a history of persecution

The issue facing cryptocurrency developers is not new. During the Biden administration, creators of DeFi applications were prosecuted under Section 1960 of the federal criminal code, which directly contradicted the U.S. Department of the Treasury’s official guidance from 2019. This violation had serious consequences for the ecosystem.

Over four years, the share of open-source American developers decreased from 25% to 18%. This trend raises serious concerns: without clear legal boundaries, this percentage could continue to decline, undermining the U.S.’s competitiveness in the global DeFi innovation market.

Blockchain Regulatory Certainty Act: a new direction for crypto development

The proposed bill addresses this issue by establishing explicit separation of responsibilities. Creators of mobile and desktop applications, as well as infrastructure providers, will receive legal protection from prosecution simply for developing technology, without being classified as financial intermediaries.

This distinction is crucial for fostering innovation in the blockchain sector. Developers will be able to focus on improving technologies without diverting resources to legal issues related to the misapplication of federal laws.

Moving toward consensus: negotiations on stablecoins and the CLARITY Act

The new DeFi-focused bill comes amid prolonged negotiations over the passage of the CLARITY Act. During the third meeting of crypto company leaders and banking sector representatives, participants failed to reach an agreement on key issues, especially regarding the regulation of stablecoin revenues.

The exact date for hearings on the new Blockchain Regulatory Certainty Act has not yet been set. However, the initiative demonstrates growing support in Congress for clear legislative regulation of DeFi developers. This could significantly change the legal landscape for the entire cryptocurrency industry.