If you’ve been keeping up with recent news, it might seem like the debate over stablecoin yields is the only major obstacle preventing the U.S. from passing long-awaited comprehensive crypto market structure legislation. But that’s not the full picture.
For months, media coverage has zeroed in on a real but solvable disagreement: whether crypto platforms should be permitted to pass along yield from their Treasury bill reserves to stablecoin holders, or whether that practice should be limited to shield traditional banks from losing consumer deposits. It’s a genuine conflict. The American Bankers Association has deployed its full lobbying power against it. Coinbase has drawn a firm line. Senate negotiators have spent months trying to find a compromise. And they’ll likely reach a resolution eventually.
But while bank lobbyists and the press focus on who gets to collect stablecoin interest, Congress is dangerously close to undermining the one provision that will decide whether market structure legislation actually fulfills its promise — or ends up harming the very industry it’s meant to support. That provision — Section 604 of the current Senate draft — concerns developer protections and whether those who create non-custodial software can be held legally responsible by the U.S. government as legitimate money transmitters. Whether this section survives the Senate negotiation process unchanged will shape the fate of the entire bill.
This provision isn’t a minor technical detail. It isn’t an abstract philosophical argument. It’s the foundational pillar supporting the entire policy goal of this legislation. And right now, it’s under serious threat.
The BRCA Is Everything
The Blockchain Regulatory Certainty Act, or BRCA, is a precisely crafted provision with bipartisan roots. Introduced by Senators Cynthia Lummis (R-Wyoming) and Ron Wyden (D-Oregon), it accomplishes one critical thing: it makes clear that software developers and infrastructure providers who don’t hold or control user funds are not classified as money transmitters under federal law. That’s all it does. It doesn’t weaken anti-money laundering laws. It doesn’t protect wrongdoers. It simply establishes a boundary that should have been self-evident from the beginning — that writing code is not the same as transmitting money.
Without the BRCA, developers of non-custodial software — the people who build wallets, protocols, and decentralized applications that millions of Americans already rely on — face potential criminal liability under Section 1960 of the federal criminal code. Not civil penalties. Not regulatory fines. Criminal prosecution simply for publishing software.
This isn’t a theoretical concern. We’ve already witnessed what “regulation by prosecution” looks like in practice. In 2025, the developers behind Tornado Cash and Samourai Wallet were criminally charged — not for personally laundering money, not for actively collaborating with criminals, but for writing and publishing code that others used in ways the government disapproved of. Keonne Rodriguez and William Lonergan Hill are now serving federal prison sentences following their convictions in proceedings that many viewed as show trials. Roman Storm is facing re-prosecution and could spend over a century behind bars. And all of this is happening despite standing DOJ guidance saying otherwise, a Treasury Department that recognizes the legitimate need for privacy tools and mixers, and an administration that claims to be “the most crypto-friendly” in history. No matter how you frame it, the message from federal prosecutors is clear: if you build non-custodial software in the United States, you do so at your own risk.
If the Senate CLARITY Act passes without strong BRCA protections, that message becomes official law. And the logical response from every developer, every startup, and every venture-backed crypto company in America will be the same: relocate.
This isn’t hyperbole. It’s an economic inevitability. No founder with competent legal advice would accept a regulatory framework where writing open-source code could send you to a federal prison depending on the political climate in Washington, D.C. Instead, they’ll set up shop in Singapore, Switzerland, the UAE — any jurisdiction that doesn’t treat software engineers like unlicensed money transmitters. A CLARITY Act without robust BRCA developer protections won’t just fail to provide clarity. It will speed up the very capital flight that Congress says it’s trying to stop.
Congress Could Strangle the Agentic Economy Before It Begins
The departure of developers would be devastating on its own. But the timing couldn’t be worse, because Congress risks suffocating a budding technological revolution that has the potential to drive meaningful GDP growth for decades: the agentic economy.
Autonomous AI agents — software systems capable of negotiating, transacting, and carrying out tasks on behalf of users without human involvement — are emerging as the next major computing paradigm. NVIDIA CEO Jensen Huang projected a $1 trillion agentic AI opportunity at GTC 2026. OpenAI is developing models specifically designed for multi-agent architectures. Institutional investment is pouring in. And the infrastructure these agents need to function at scale — micropayments, round-the-clock settlement, programmable wallets, cryptographic verification — is all built on blockchains.
This isn’t a crypto-industry fantasy. It’s the shared outlook of the world’s largest technology companies and investors. AI agents require permissionless, always-available financial infrastructure. Traditional payment systems, with their batch processing, minimum transaction fees, and business-hour restrictions, simply can’t support an economy where machines transact with machines thousands of times per second. Blockchains can. And the developers building that emerging infrastructure are the very same developers the CLARITY Act threatens to criminalize and push overseas.
We’ve faced this crossroads before. In the late 1990s, Congress encountered a similar turning point with the early internet. Lawmakers could have imposed heavy-handed regulations on the young web — requiring licenses for website operators, holding platform developers liable for user-generated content, taxing digital transactions before the market had time to develop. They chose restraint. That decision — deliberate, bipartisan, and forward-thinking — enabled the creation of the most remarkable engine of economic value in modern history. Google, Amazon, Apple, Meta, Microsoft, NVIDIA, Tesla — trillions of dollars in publicly traded equity, millions of American jobs, and an entire generation of global technological leadership — all trace their origins to a Congress that understood that excessive regulation kills innovation.
The agentic economy is the internet boom of the 2020s. The question is whether this Congress will demonstrate the same wisdom — or whether it will over-regulate a transformative technology in its earliest stages, handing what should be a new era of American economic leadership to competing nations that won’t make the same mistake.
A Violation of the Toolmaker Principle
Even if we set aside the economic disaster that would inevitably follow from officially criminalizing crypto and AI software development, the government’s current stance on developer liability — which would become permanently enshrined by a CLARITY Act lacking strong BRCA protections — represents something more fundamental: a breach of basic American legal principles.
We don’t prosecute automobile executives as accessories to bank robberies because the
The getaway driver used a Ford. We don’t charge Google engineers with conspiracy because criminals coordinated an attack over Gmail. We don’t indict Microsoft engineers for money laundering because a cartel tracked its finances using Excel. In every other area of American commerce, we acknowledge a basic legal principle: the creator of a tool is not responsible for its misuse.
Crypto developers are the only group of toolmakers in the American economy being targeted for this punitive treatment. And the tool they are creating — non-custodial, open-source software that enables individuals to transact without intermediaries — is arguably more in line with American values of individual freedom, financial privacy, and free enterprise than any technology since the printing press.
This is not a partisan issue. The BRCA was co-introduced by a Republican and a Democrat. It passed in the House of Representatives with a 70% margin. The principle it represents — that publishing code is not a crime — should be as uncontroversial as the principle that publishing a newspaper is not a crime. Yet here we are, watching a Congress that promised to make America the crypto capital of the world negotiate away the one provision that would actually make that possible.
What Congress Needs to Hear
Making America the crypto capital of the world was a central promise of the current administration and the congressional majority that came into office alongside it. Voters heard that promise. The industry heard it. The world heard it. The CLARITY Act, without strong developer protections, would fall disastrously short of fulfilling that promise.
The debate over stablecoin yields will be resolved. Nobody wants to see the digital yuan win because bank lobbyists needed the gravy train to keep running through Wall Street. The regulatory competition between the SEC and the CFTC will be resolved. A new Howey framework will be developed. These are all important details, but ultimately they are just that – implementation details. The existential question — the one that determines whether there will even be an American crypto industry left to regulate by 2030 — is whether Congress will protect the developers who build this technology from criminal prosecution for the act of writing code.
The BRCA must be included in any market structure bill. It must be included with teeth. And it must not be weakened, carved out, or traded away in backroom negotiations over provisions that, however important, are not the difference between an industry that thrives in America and one that packs its bags for Hong Kong or Singapore.
Congress has a very narrow window of opportunity left. The midterm elections in November look set to be a political earthquake. The legislative timer in Washington D.C. is rapidly running out of sand. A generational opportunity for the United States to assert its continued leadership in the new multi-polar world order is disappearing. The time to get this right is now — not because the crypto lobby is demanding it, but because the principles of American innovation, equal treatment under the law, and our continued economic and technological leadership of the world demand it.
The question is not whether the United States will have a market structure bill. The question is whether that bill will be worth the paper it’s printed on.
This is a guest post by Kyle Olney. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
