The DeFi Debrief

Week of May 26, 2025: BRCA Reintroduced; GENIUS Act Update; SEC Oversight Hearing

Blockchain Regulatory Certainty Act Reintroduced

On Wednesday, May 21, 2025, House Majority Whip Tom Emmer (R-MN) re-introduced the bipartisan Blockchain Regulatory Certainty Act (BRCA) to the 119th Congress with co-sponsor Representative Ritchie Torres (D-NY).

The bill stipulates that blockchain developers and service providers would not be classified as money transmitters, under state or federal law, or financial institutions, under the Bank Secrecy Act, provided they do not control user digital assets in the ordinary course of business — defining control as "the unilateral and independent legal right, authority, or ability to obtain, upon demand, data sufficient to initiate transactions.”

The legislation includes similar principles to the Financial Crimes Enforcement Network’s (FinCEN) 2019 Guidance on virtual currencies, in which FinCEN recognizes that in order to be classified as a money transmitter under the Bank Secrecy Act, one must exercise “total independent control” over user assets. By codifying this control principle, the legislation would reaffirm that peer-to-peer, self-custodial blockchain services should not be subject to the immensely burdensome and incompatible regulations suited for centralized financial intermediaries.

The DeFi Education Fund applauds Majority Whip Emmer and Representative Torres for their leadership in protecting blockchain development in the United States, delivering much-needed clarity to the builders of our financial future. The passage of this legislation would also help to manifest Congress’s intent to protect developers of noncustodial protocols from unreasonable prosecution for registration violations, such as prosecutions under Section 1960.

For DEF’s one-page summary of the BRCA, click here. For background on the history and design of the BSA, its application to crypto, and why software providers and noncustodial operators across the technology stack are not subject to the BSA read DEF’s article written by Lizandro Pieper and Gavin Zavatone: “Square Peg in a Round Hole: Why the Bank Secrecy Act Should Not Apply to Blockchain Participants."

Senate Successfully Invokes Cloture on GENIUS Act

On Monday, May 19, 2025, the Senate successfully invoked cloture, a procedural motion to advance legislation, on the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, with almost all Senate Republicans and 16 democrats voting in favor 66-32. Following the advancement, on May 21, the Senate voted on a second procedural motion, picking up three more Senators in favor of the motion 69-31.

Next up? The GENIUS Act will proceed to the Senate floor for debate, and then to the final vote. The Senate is poised to consider the legislation after Memorial Day recess.

Of note, the bill is now open to amendments for consideration on the Senate floor. Senators have already introduced amendments targeted at illicit finance, certain ethics rules, consumer protections, and extraneous policy proposals including credit card regulations.

DeFi Education Fund is thrilled that a bipartisan group of Senators recognize the critical importance of providing clarity for stablecoin issuers. We are one step closer to creating a more welcoming environment for digital assets in the United States. DEF looks forward to the Senate passing this law out of the chamber and encourages all Senators to support the legislation.

Please urge your Senator to support the GENIUS Act:

https://www.standwithcrypto.org/

House Appropriations Committee SEC Oversight Hearing

On May 20, 2025, the House Appropriations Subcommittee on Financial Services and General Government conducted an oversight hearing of the Securities and Exchange Commission (SEC) in which Paul Atkins, Chairman of the Commission, testified. One of the primary topics discussed during the hearing was how the SEC can create a clear regulatory framework for digital assets and blockchain technology. When asked by Representative John Joyce (R-PA) about how Atkins envisions a regulatory framework for digital assets, Atkins stressed, above all else, the need to clarify the definition of a security. To do so, Atkins said that the Crypto Task Force would continue holding roundtable discussions and engaging with key stakeholders. As for what comes next, Atkins hinted at a report from the SEC Crypto Task Force outlining next steps within the next few months.

DeFi Education Fund is grateful to Chairman Atkins for his commitment to providing a clearer regulatory framework for digital assets in the United States.