- A new letter from the DeFi Education Fund and over 110 industry leaders urges Congress to protect developers and noncustodial service providers in the digital asset industry.
- The letter emphasizes the need for clear, nationwide protections for software developers, as they are the foundation of the blockchain and crypto ecosystem.
- The DeFi Education Fund argues that crypto rules that fail to differentiate between developers and traditional financial intermediaries could cripple innovation in the U.S.
- The initiative is supported by major digital asset organizations like The Bitcoin Policy Institute, The Blockchain Association, and The Chamber of Digital Commerce.
In a growing movement that could shape the future of digital finance in the United States, leading voices from the cryptocurrency industry have come together to urge Congress to protect developers. At the center of the conversation is a new letter submitted to the U.S. Senate Banking Committee, spearheaded by the DeFi Education Fund and supported by more than 110 industry builders, investors, and advocates.
The message is clear: without concrete protections for developers and noncustodial service providers, the digital asset industry risks losing momentum, innovation, and potentially its standing as a global leader in crypto technology.
A Call for Developer Protections
The letter stresses that the foundation of the blockchain and crypto ecosystem lies in its developers—the people writing code, maintaining open-source networks, and building applications that allow users to participate in decentralized finance (DeFi). Unlike traditional financial institutions, these developers do not directly hold customer assets, yet under proposed regulations, they risk being subjected to rules designed for custodial financial entities.
The DeFi Education Fund’s correspondence highlights the importance of creating clear, nationwide protections for software developers. The concern is not merely technical; it is existential. According to the signatories, crypto rules that fail to differentiate between developers and traditional financial intermediaries could cripple innovation in the United States. The letter states plainly: “Without these protections, we cannot support a market structure bill.”
Backing from Major Industry Groups
The initiative is backed by several of the most influential organizations in the digital asset space, including:
Together, these groups argue that for new rules to gain acceptance from the wider industry, they must recognize the unique role of developers. Unlike banks or custodians, developers write software that enables peer-to-peer transactions, but they do not themselves control user funds. This distinction, they argue, is not only logical but essential to keep the U.S. competitive in the global crypto race.
Learning from the Early Internet
One of the strongest arguments made in the letter draws on history. During the early days of the internet, the U.S. government embraced innovation by creating a safe regulatory environment for software developers. This approach allowed Silicon Valley to flourish and helped establish the United States as the undisputed leader of the digital age.
Now, the letter insists, Congress has the opportunity to do the same for blockchain technology. If the U.S. truly wants to become the “crypto capital of the world”—a goal even former President Donald Trump has expressed—the country must protect developers and welcome innovation, rather than burden it with rules that were designed for a different era and a different financial structure.
The Numbers Tell a Worrying Story
The letter also highlights a troubling trend: the share of open-source developers based in the United States is shrinking.
- In 2021, nearly 25% of open-source blockchain developers were based in America.
- By 2025, that number had dropped to just 18%.
This decline, the letter suggests, is not a coincidence. Developers are choosing to leave—or never come to—the U.S. because of uncertainty and lack of clarity in regulations. Other jurisdictions, including Europe and parts of Asia, have begun implementing more predictable frameworks for digital assets, making them more attractive destinations for innovators. Without action, the U.S. risks losing its talent base, along with the economic growth and technological advancements that come with it.
Legislative Progress So Far
Not all is bleak. The letter acknowledges progress made by Congress through inclusion of language from existing legislative proposals:
- The Blockchain Regulatory Certainty Act (BRCA)
- The Keep Your Coins Act
Both of these bills were designed to protect developers of noncustodial software and ensure that individuals maintain control over their own digital assets. The incorporation of these measures into the CLARITY Act is seen as a step in the right direction. However, the signatories emphasize that these protections must not be watered down in the final law. Developers and companies should not face regulation simply for:
- Writing and publishing open-source blockchain code
- Maintaining decentralized networks
- Helping users access software while retaining control of their funds
These actions, the letter explains, are fundamentally different from custodial financial services and should be treated as such.
A Bipartisan Opportunity
In today’s highly polarized political environment, crypto regulation has emerged as one of the few issues capable of generating bipartisan support. The letter highlights that the CLARITY Act passed the House with a supermajority of 294 votes, representing lawmakers from both sides of the aisle. This momentum, the letter argues, should not be squandered. The Senate now has the chance to strengthen developer protections in its version of the bill, further solidifying bipartisan consensus and setting the stage for long-term policy stability. The stakes are high: if the Senate fails to act, developers may continue to leave the U.S., weakening its ability to compete globally in one of the fastest-growing areas of technology.
The Road Ahead
The coming months will be critical for the future of crypto regulation in the United States. The Senate Banking Committee is expected to hold discussions on the CLARITY Act and related proposals, with input from both industry leaders and policymakers. The crypto community, through its unified letter, has made its stance clear: protect developers or risk losing support for any new market structure legislation. For lawmakers, the choice is straightforward but consequential. They can either create a regulatory environment that encourages innovation, retains top talent, and establishes the U.S. as a global leader in blockchain—or risk driving the next generation of internet pioneers overseas.
The debate over cryptocurrency regulation is not just about digital assets; it is about the future of innovation in America. Developers are the backbone of the blockchain revolution, and protecting their ability to write, publish, and maintain code without undue legal risk is essential. The letter to Congress underscores an urgent message: protect developers if the U.S. wants to remain competitive in the digital economy. With bipartisan momentum already behind measures like the CLARITY Act, lawmakers now have an opportunity to enshrine protections that will shape the industry for decades. If Congress listens, the U.S. can remain at the forefront of financial and technological innovation. If not, the talent, investment, and opportunities may flow elsewhere—leaving America behind in the race for digital leadership.
Disclaimer: CryptopianNews shares this for learning and info only. It’s not meant to be financial or investment advice. Crypto markets change a lot and move quickly. Investing in them can be risky. You should always look into things yourself. Talk to a trained financial advisor before making any choices about investing.
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