A new bill has been introduced by US lawmaker Warren Davidson that aims to clarify the regulatory status of blockchain developers and non-custodial services. The bill, called the “Blockchain Regulatory Certainty Act,” seeks to exempt these entities from being classified as money transmitters under the Bank Secrecy Act (BSA).
The BSA requires financial institutions, including money transmitters, to register with the Financial Crimes Enforcement Network (FinCEN) and comply with anti-money laundering (AML) and know-your-customer (KYC) regulations. However, the application of these regulations to blockchain developers and non-custodial services has been a point of confusion and uncertainty.
Davidson’s bill seeks to provide clarity by defining a “blockchain developer” as a person or entity that creates or modifies blockchain technology and does not have custody or control of digital assets. Similarly, a “non-custodial entity” is defined as a person or entity that facilitates the exchange of digital assets without taking custody or control of those assets.
By exempting these entities from being classified as money transmitters, the bill would remove the burden of complying with AML and KYC regulations, which can be costly and time-consuming. This would allow blockchain developers and non-custodial services to focus on innovation and growth without being hindered by regulatory uncertainty.
The bill has received support from the blockchain industry, with many seeing it as a positive step towards creating a more favorable regulatory environment for blockchain technology. However, some have raised concerns that the bill may not go far enough in providing regulatory clarity for the industry.
For example, the bill does not address the issue of whether digital assets should be considered securities or commodities, which has been a point of contention between regulators and the industry. Additionally, some have argued that the bill may not provide enough protection for consumers who use non-custodial services.
Despite these concerns, the introduction of the Blockchain Regulatory Certainty Act is a positive development for the blockchain industry. It shows that lawmakers are taking steps to understand and support the growth of blockchain technology, and that they recognize the need for regulatory clarity in this rapidly evolving space.
As the blockchain industry continues to mature and expand, it is likely that more regulatory challenges will arise. However, with bills like the Blockchain Regulatory Certainty Act, the industry can be confident that lawmakers are working to create a regulatory environment that supports innovation and growth.
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