Lummis–Wyden bill shields non-custodial crypto devs from money transmitter rules

The bipartisan Blockchain Regulatory Certainty Act would exempt non-custodial crypto developers from money transmitter rules, aiming to cut legal risk and keep builders in the U.S.

Summary

• Senators Cynthia Lummis and Ron Wyden introduced the Blockchain Regulatory Certainty Act to clarify that non-custodial developers are not money transmitters.​
• The bill protects activities like writing code, maintaining decentralized networks, and building self-custody tools when developers lack unilateral control over user assets.​
• Industry groups say clearer lines between infrastructure builders and intermediaries could reduce criminal liability fears and stem the outflow of projects overseas.​

Two U.S. senators introduced bipartisan legislation on January 12, 2026, aimed at providing regulatory clarity for cryptocurrency developers by exempting non-custodial builders from money transmitter licensing requirements.

Lummis-Wyden bill to protect non-custodial crypto developers

Senators Cynthia Lummis, a Republican, and Ron Wyden, a Democrat, proposed the Blockchain Regulatory Certainty Act to address regulatory uncertainty facing developers in the digital asset sector, according to statements from the lawmakers.

The bill seeks to exempt cryptocurrency developers who do not process or control user funds from federal and state money transmitter rules. Under the proposed legislation, creating computer software, writing code, or maintaining blockchain networks would not generate licensing obligations.

The measure defines developers who lack unilateral control over assets as non-money transmitters, establishing a legal distinction between infrastructure development and custodial financial activity. Protected activities would include blockchain software development, maintenance of decentralized networks, self-custody tools, and infrastructure services.

Senator Lummis stated that developers have faced regulatory threats despite having no custody roles, arguing that money transmitter classifications restrict innovation without reducing money laundering risks. Senator Wyden cited privacy and free speech concerns, stating that applying rules designed for exchanges to code writers reflects a misunderstanding of the technology.

Blockchain developers have raised concerns about potential criminal liability for third-party use of their software, according to industry observers. Some projects have relocated operations overseas to reduce regulatory risk, the senators noted.

The legislation represents a response to increased enforcement actions involving non-custodial protocols that have alarmed developers in recent years. The bipartisan sponsorship reflects uncommon alignment on cryptocurrency policy between the two major parties.

The bill currently stands as standalone legislation in the Senate but may be incorporated into broader market structure proposals, according to congressional sources. Negotiations on final legislative packaging continue.

Industry participants have expressed support for clearer distinctions between developers and financial intermediaries, stating the bill could reduce compliance uncertainty and encourage domestic blockchain development. Proponents say the proposal aims to preserve U.S. competitiveness in digital finance by retaining talent and investment.

The legislation does not restrict regulation of cryptocurrency exchanges or brokers. Senator Wyden emphasized that enforcement of tax and trading rules would continue, noting the bill is intended to narrow regulatory scope rather than weaken oversight.

The measure reflects the principle of technology neutrality, with lawmakers stating regulation should focus on function rather than code creation, consistent with previous internet policy approaches.

The bill’s future depends on broader Senate negotiations, but its introduction signals lawmakers’ willingness to update regulatory frameworks for emerging financial technologies.