Close to 100 Catholic leaders representing congregations across the country sent a letter on Tuesday to Senate Majority Leader John Thune and Senate Democratic Leader Chuck Schumer opposing a provision in the Clarity Act cryptocurrency market structure bill. The Alliance to End Human Trafficking, supported by Catholic organizations, warned that Section 604 of the bill could weaken safeguards designed to combat human trafficking and make it harder to oversee illicit activity linked to trafficking and other crimes. The letter reflects ongoing tensions in cryptocurrency legislation as lawmakers attempt to balance technological innovation with regulatory oversight and public safety concerns.
Section 604 Creates Safe Harbor for Non-Custodial Developers
Section 604, also known as the Blockchain Regulatory Certainty Act (BRCA), is a standalone bill that has been incorporated into the Clarity Act. The provision creates a safe harbor for non-custodial developers, clarifying that they are not money transmitters. The BRCA provision has emerged as a key point of contention as lawmakers try to pass broader crypto legislation.
Catholic Leaders Warn of Regulatory Gaps in Trafficking Prevention
The Catholic leaders stated in the letter that Section 604 "could create broad carveouts and regulatory ambiguities that may make it more difficult to responsibly monitor illicit financial activity tied to trafficking, organized crime, child exploitation, sanctions evasion, and other forms of abuse." The letter, obtained by The Block, emphasized that "the Catholic Church has long taught that economic systems and markets must ultimately serve the human person, especially the poor, vulnerable, and those at greatest risk of exploitation." The group acknowledged the promise of emerging financial technologies and support for responsible innovation, but stated that "innovation cannot come at the expense of human dignity or public accountability."
Digital Chamber CEO Defends Developer Protections
Digital Chamber CEO Cody Carbone pushed back against the letter on Tuesday. Carbone said in a post on X that "Section 604 says NON-CUSTODIAL developers are not money transmitters. Those who are building tools are different than those running banks." Many in the crypto industry strongly support the measure, saying it provides legal certainty for software developers and helps prevent innovation from moving offshore.
Catholic Organizations Sign Opposition Letter
Leaders from the Sisters of Saint Joseph of Philadelphia, Sisters of the Blessed Virgin Mary, and the Congregation of Sisters of St. Agnes signed the letter. Punchbowl News earlier reported news of the letter.
FAQ
What did Catholic leaders oppose in the Clarity Act?
Close to 100 Catholic leaders sent a letter on Tuesday opposing Section 604 of the Clarity Act, warning that the provision could weaken safeguards against human trafficking and make it harder to oversee illicit activity linked to trafficking, organized crime, child exploitation, sanctions evasion, and other crimes.
What does Section 604 of the Clarity Act do?
Section 604, also known as the Blockchain Regulatory Certainty Act (BRCA), creates a safe harbor for non-custodial developers, clarifying that they are not money transmitters. The Digital Chamber CEO Cody Carbone stated that the section distinguishes between those building tools and those running banks.
Which Catholic organizations signed the opposition letter?
Leaders from the Sisters of Saint Joseph of Philadelphia, Sisters of the Blessed Virgin Mary, and the Congregation of Sisters of St. Agnes signed the letter sent to Senate Majority Leader John Thune and Senate Democratic Leader Chuck Schumer.
