Michaela
Summary: Why are crypto firms urging the Senate to protect developers in new legislation?
They argue that developers and non-custodial service providers should not be regulated like traditional financial intermediaries. Without clear protections, innovation could move overseas, weakening U.S. leadership in digital finance. Safeguards would ensure open-source builders can keep advancing blockchain technology without restrictive barriers.
A coalition of 115 crypto firms, including exchanges like Coinbase, Kraken, and Uniswap Labs, along with investors and advocacy groups, has called on the U.S. Senate to ensure protections for software developers and non-custodial service providers are included in upcoming market structure legislation.
In a letter to Congress, the coalition urged lawmakers to establish strong, nationwide safeguards for software developers and non-custodial service providers within market structure legislation, warning that the bill cannot gain their support without these protections.
“As much-needed digital asset law develops in the United States, it is critical that legislation recognizes and preserves the historical protections afforded to open-source software development, and ensures that software developers and non-custodial service providers who create, support, and enable access to decentralized networks are not forced into unworkable regulatory categories designed for the traditional, intermediated financial world,” the letter wrote.
The coalition emphasized that the United States has long fostered a supportive environment for software development, enabling the country to remain at the forefront of technological innovation over the past fifty years, from early internet advancements to the rise of artificial intelligence.
Furthermore, the firms contend that to maintain U.S. leadership in the digital financial era, and to realize the Trump Administration’s goal of positioning the country as the “crypto capital of the world”, market structure legislation must recognize blockchain as neutral infrastructure and provide clear protections for both the developers building it and the non-custodial service providers facilitating user access.
The crypto firms warn that in the absence of clear legislation, the United States risks falling further behind in software development as regulatory uncertainty drives innovation elsewhere.
Crypto Firms Caution on Intermediary Rules and Innovation
The debate over whether software developers and non-custodial services should be treated as financial intermediaries carries direct implications for ecosystems such as Shiba Inu.
Without explicit protections, developers working on Shibarium could be subjected to heightened compliance obligations, creating delays for upgrades like cross-chain bridges, liquidity integrations, and other infrastructure improvements.
For SHIB holders, the outcome of this policy battle may shape how quickly the ecosystem advances and whether its decentralized finance services remain open, permissionless, and accessible to a global user base.
Industry advocates argue that imposing intermediary-style regulations on builders who never take custody of user funds risks stifling the pace of innovation in projects like Shibarium, where agility and decentralized participation are core to growth.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
