All about U.S Congress’s new bill and its intent to protect open-source developers

ambcryptoPublished on 2026-02-28Last updated on 2026-02-28

Abstract

A bipartisan group of U.S. lawmakers introduced the Promoting Innovation in Blockchain Development Act on February 26, aiming to clarify liability for blockchain developers. The bill seeks to protect open-source software developers from being prosecuted under money-transmitting laws, particularly amending Section 1960 of the U.S. Code to limit liability to entities that control customer assets or execute transfers. It comes amid growing regulatory scrutiny and cases like Tornado Cash that raised concerns about criminalizing non-custodial developers. Industry groups, including the Solana Institute and the Blockchain Association, have endorsed the bill, emphasizing the need to distinguish between developers and financial intermediaries. The proposal is part of a broader legislative effort, alongside bills like the Blockchain Regulatory Certainty Act and the GENIUS Act, to provide regulatory clarity and protect innovation in the crypto ecosystem.

A bipartisan coalition introduced the Promoting Innovation in Blockchain Development Act on 26 February. It aims to clarify liability for blockchain developers.

The proposal, led by Congressmen Scott Fitzgerald, Ben Cline, and Zoe Lofgren, arrived as regulatory pressure intensified around decentralized infrastructure. At the same time, prosecutions involving Tornado Cash amplified concerns about criminalizing open-source software development.

The bill, therefore, amends Section 1960 of the U.S Code, a statute originally designed to combat money laundering. However, enforcement trends increasingly extended its scope towards non-custodial developers who only publish or maintain code.

Under the proposal, liability would apply mainly to entities controlling customer assets or executing transfers on users’ behalf. Meanwhile, developers who simply write or distribute open-source software would fall outside prosecutorial reach.

Congressman Ben Cline emphasized the issue, stating, “For too long, federal overreach has blurred the line between bad actors and the innovators building next-generation technology.”

Similarly, Rep. Scott Fitzgerald had previously stated,

“For years, innovators and software developers have been caught in the crosshairs of an aggressive regulatory approach.”

Industry stakeholders rally behind developer protection bill

Early reactions to the Promoting Innovation in Blockchain Development Act emerged quickly across the blockchain policy ecosystem as the proposal entered public debate. Initial responses focused on the bill’s central premise of protecting non-custodial developers from money-transmitter liability.

The Solana Institute responded quickly, emphasizing the importance of developer protections at a critical stage for open-source infrastructure.

The organization stated,

“We’re grateful to Rep. Fitzgerald, Rep. Ben Cline, and Rep. Zoe Lofgren for championing developers at this critical junction for open-source software development and the crypto ecosystem with the introduction of the Promoting Innovation in Blockchain Development Act.”

Shortly afterwards, broader industry advocacy groups reinforced similar sentiments. The Blockchain Association, for instance, publicly endorsed the legislation through CEO Summer Mersinger.

These responses indicate coordinated industry approval, as stakeholders view the bill as establishing a clear boundary between open-source developers and custodial financial intermediaries.

Crypto bills reshape the U.S regulatory landscape

Recent statements from the Blockchain Association highlight rising momentum for developer protections in Washington. This advocacy also coincides with the Blockchain Regulatory Certainty Act, S.3611, debated in early 2026. Despite passing the House in July 2025, the CLARITY Act is still in a stalled state.

As negotiations continue, advocates warn that removing developer exemptions could revive enforcement pressure. Meanwhile, the GENIUS Act added stablecoin guardrails while avoiding liability expansion towards software developers.

Parallelly, the Promoting Innovation in Blockchain Development Act narrows Section 1960 towards custodial actors.

Therefore, industry groups have intensified lobbying across dozens of Senate offices in late February 2026. BRCA now stands as a pivotal test for America’s evolving crypto regulatory framework.

Final Summary

U.S crypto legislation momentum strengthens developer protections, supporting innovation across major networks.
Policy alignment around BRCA and the CLARITY Act may reduce regulatory risk for leading assets such as Bitcoin and Ethereum.

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