Senators Lummis and Wyden introduce a standalone bill protecting non-custodial DeFi developers as the Senate prepares to mark up broader crypto market structure legislation this week.

The bipartisan proposal, co-sponsored by Senator Ron Wyden, revives the Blockchain Regulatory Certainty Act, clarifying that software developers, miners, validators, and infrastructure providers who do not control user funds or hold private keys should not fall under federal money transmission rules. The bill reinforces the principle that “code is not custody,” limiting regulatory liability to entities that actually control customer assets.

Standalone Bill Highlights Developer Protections

The move comes amid intense last-minute negotiations over the Senate’s comprehensive Digital Asset Market Clarity Act, expected to be finalized and made public as early as Tuesday, with a Senate Banking Committee markup scheduled for Thursday. While earlier drafts of the market structure bill included similar developer protections, that language has remained a point of contention during negotiations.

“It’s time to stop treating software developers like banks simply because they write code,” Lummis said, emphasizing growing concern that recent enforcement actions risk criminalizing open-source software development.

Stablecoin Yield Restrictions May Favor Banks

The latest leaked draft of the Clarity Act (page 189) includes provisions restricting companies from paying interest solely on stablecoin balances. Users may still earn rewards, but only by taking specific actions, such as trading, staking, providing liquidity or collateral, or participating in governance. Crypto journalist Eleanor Terrett noted that banks may have gained the upper hand in negotiations on stablecoin yields. Senators have 48 hours to submit amendments, leaving it unclear whether the rules will remain unchanged in Thursday’s markup.

Sources >> US Lawmakers Introduce Standalone Bill to Protect Blockchain Developers Ahead of Broader Crypto Legislation