Promoting Innovation in Blockchain Development Act

This bill makes a narrow amendment to the federal law governing unlicensed money transmission businesses. It adds language clarifying that anyone who exercises control over currency, funds, or other value that substitutes for currency without proper licensing violates the law, not just those who actively transmit it. This is intended to ensure that certain cryptocurrency custodians and blockchain operators that hold digital assets on behalf of others must be properly licensed.

Cryptocurrency businesses, blockchain developers, digital asset custodians, and others who hold or manage digital currencies on behalf of clients. Federal prosecutors would have clearer authority to charge unlicensed crypto businesses operating in legal gray areas.

Unlicensed entities that hold or control digital assets on behalf of others would more clearly fall within the scope of the federal money transmission law, potentially leading to more enforcement actions. This could push blockchain companies toward proper licensing but may also add regulatory burden to the industry.