A safe harbor from licensing and registration requirements would be provided for non-controlling blockchain developers and blockchain service providers under a bipartisan bill sponsored on Aug. 17 by U.S. Rep. Tom Emmer (R-MN).
“For the future of blockchain, decentralized finance and America’s support for innovation and emerging technologies, it’s imperative that we provide the framework for this technology to thrive, without being limited by outdated rules and overregulation,” Rep. Emmer said on Tuesday.
The Blockchain Regulatory Certainty Act, H.R. 5045, which Rep. Emmer introduced with original cosponsor U.S. Rep. Darren Soto (D-FL), would remedy Financial Action Task Force (FATF) proposed guidance that could stifle blockchain innovation in the United States and send it overseas, according to information provided by Rep. Emmer’s office.
The FATF earlier this year issued draft guidance to expand the definition of a virtual asset service provider to include any provider that may develop or operate a decentralized finance platform, regardless of whether they interact with users. If implemented, such action would require many in the blockchain space that never transmit money or hold consumer funds to deal with the U.S. money transmission system, the information says.
“Certain blockchain developers and service providers, like miners and multi-signature service providers, should not have to register as money transmitters because, simply put, they never custody consumer funds,” said Rep. Emmer. “Blockchain service providers need clear rules of the road to be able to develop and invest in the United States, and this clarity is more necessary than ever as the FATF tries to encapsulate more non-custodial blockchain developers in the money transmission system.”
If enacted, H.R. 5045 would protect non-controlling blockchain services and software developers from being treated as a money transmitter, a financial institution or any state or federal legal designation requiring licensing or registration unless the developer or provider has control over digital currency, according to the text of the bill.
“The United States should prioritize accelerating the development of blockchain technology and create an environment that enables the American private sector to lead,” Rep. Emmer said. “These technologies hold untold promise for our economy and for all Americans, and we should be embracing them.”
The Coin Center, the Blockchain Association, and the Chamber of Digital Commerce endorsed H.R. 5045.
“By providing commonsense regulatory guardrails, this legislation goes a long way in ensuring the U.S. remains at the forefront of crypto innovation,” said Blockchain Association Executive Director Kristin Smith.