With a White House deadline on the anticipated CLARITY Act set for March 1, crypto policy discussions are intensifying in Washington. On Thursday afternoon, Senate Democrats are scheduled to meet to continue deliberations on the crypto market structure bill.
Ahead of those talks, the Blockchain Association returned to Capitol Hill to press lawmakers on how decentralized finance (DeFi) will be treated in the latest draft from the Senate Banking Committee.
Blockchain Association Lobbies For Developer Protections
The industry trade group, which represents a range of crypto companies, said its advocacy efforts are focused particularly on Title III of the draft legislation and on preserving the Blockchain Regulatory Certainty Act (BRCA) as negotiations move forward.
In a post on social media platform X, the organization stated that leaders from 18 member companies were meeting with 24 Senate offices across both the Banking and Agriculture Committees.
According to the association, the stakes extend beyond technical regulatory language. “Today’s meetings are about whether America will keep its commitment to open innovation — and to the developers who build permissionless software,” the group wrote.
It emphasized that it has consistently pushed for legislation that clearly distinguishes between developers of non-custodial software and financial intermediaries that actually take control of customer funds.
As Congress works toward a comprehensive framework for digital asset markets, the association argued, policymakers must ensure that DeFi protocols are not effectively pushed out of existence through overly broad rules.
Clear Line Between Custodians And Code Writers
Central to the debate is the treatment of open-source developers. The group maintains that developers who publish code but do not custody or manage user assets should not be regulated as financial institutions.
“Open-source developers should not be treated as financial intermediaries when they do not custody or control customer assets,” the association said, adding that the United States has a significant opportunity to lead globally in DeFi innovation if it gets the policy approach right.
Summer Mersinger, the Blockchain Association’s chief executive officer, reinforced that message in a post earlier Thursday. She described developer protections as foundational to what she called the next wave of American innovation.
As lawmakers advance market structure legislation, she said, it is essential to draw a clear boundary between entities that hold and control consumer funds and those that merely create and publish open-source software.
New Bipartisan Crypto Bill
The debate over developer liability is also unfolding in the House of Representatives. On Thursday, crypto journalist Eleanor Terrett reported that Representatives Scott Fitzgerald, Ben Cline, and Zoe Lofgren introduced the bipartisan Promoting Innovation in Blockchain Development Act of 2026.
The proposed legislation is designed to protect software developers from prosecution under Section 1960 of the federal criminal code. The bill seeks to clarify that Section 1960 — originally crafted to address unlicensed money transmitters that custody customer funds — applies only to actors who actually control user assets.
It would exclude developers who simply write or publish code, a distinction that the crypto industry, and especially the DeFi sector, has been advocating to incorporate into the CLARITY Act.
Featured image from DALL-E, chart from TradingView.com
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