CLARITY Act includes Blockchain Regulatory Certainty Act to protect developers
Section 604 of the sweeping digital asset bill explicitly shields open-source developers and node operators from being classified as money transmitters.
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Add us on Google by Editorial Team May. 14, 2026If you write code for a blockchain protocol but never touch anyone’s money, should the government treat you like a bank? The US House of Representatives has decided the answer is no.
The Digital Asset Market Clarity Act of 2025 (H.R. 3633), better known as the CLARITY Act, passed the House on July 17, 2025 with a 294-134 bipartisan vote. Buried inside the sweeping market structure bill is Section 604, which incorporates key provisions from Rep. Tom Emmer’s Blockchain Regulatory Certainty Act (BRCA), a standalone bill that has been kicking around Washington for years without getting across the finish line on its own.
What Section 604 actually does
The core idea is straightforward: if you build open-source blockchain software, operate a node, or validate transactions, and you don’t take custody of customer funds, you are not a money transmitter under federal law.
This matters because the definition of “money transmission” has been a gray area that regulators have occasionally weaponized against developers. Developers and infrastructure providers have faced the looming risk that federal agencies could classify their activities as unlicensed money transmission, carrying serious criminal and civil penalties. Section 604 draws a bright line between custodial and non-custodial activities, making it clear which side of that line coders and validators stand on.
The protections extend explicitly to decentralized finance. Activities like running nodes and validating transactions are carved out from the bill’s compliance requirements entirely.
Why developers have been sweating this for years
Rep. Emmer’s BRCA was designed specifically to address this problem, but as a standalone bill it never gathered enough legislative momentum. Folding it into the CLARITY Act, a broader market structure framework that touches everything from SEC and CFTC jurisdictional boundaries to token classification, gave the developer protections a much bigger vehicle to ride in.
Major industry groups have lined up behind the provision. Both Coin Center and the Blockchain Association have publicly supported the developer protections, arguing they are essential for maintaining a healthy innovation ecosystem in the US. Their position is that you can protect consumers and regulate custodial intermediaries without treating every person who writes Solidity code like they’re operating a Western Union franchise.
The Senate problem
Here’s the thing. Passing the House with nearly 300 votes is impressive. But the CLARITY Act has hit a wall in the Senate, where it has stalled not once but twice.
As of December 19, 2025, the bill has not successfully navigated the upper chamber. The bipartisan nature of the House vote, 294 in favor versus 134 against, suggests the bill has broader political support than many crypto-related proposals have historically enjoyed. But two failed attempts to advance the legislation suggest there are substantive objections that haven’t been resolved.
What this means for the industry
If Section 604 eventually becomes law, it would represent one of the clearest regulatory safe harbors the crypto industry has received in the US. Open-source contributors, node operators, and transaction validators would have explicit statutory protection rather than relying on enforcement discretion or favorable interpretations of existing guidance.
For DeFi specifically, the implications are significant. Protocols that operate without custodial intermediaries, think automated market makers and lending protocols governed entirely by smart contracts, would have a clearer legal framework distinguishing them from centralized exchanges and custodians that hold user funds.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
