A major cryptocurrency bill has run into opposition from religious groups. As reported by The Block, around 100 Catholic leaders representing congregations across the country have spoken out against legislation designed to establish a regulatory framework for the digital asset market.
The CLARITY Act is one of the key bills expected to shape future crypto regulation in the US. According to the authors of the appeal, several provisions in its current form could undermine efforts to combat financial crime, including human trafficking.
Concerns Over a Controversial Provision
The letter was sent to Senate Republican Majority Leader John Thune and Democratic Leader Chuck Schumer. It was prepared by members of an anti-human trafficking alliance backed by several major Catholic organizations.
Punchbowl News was the first outlet to report on the existence of the letter.
The main concerns focus on Section 604, better known as the Blockchain Regulatory Certainty Act (BRCA). This provision exempts developers of non-custodial services from being classified as money transmitters.
“Financial systems should serve people, especially those who are most vulnerable. We support innovation, but it cannot come at the expense of human dignity and social responsibility,” the authors of the letter said.
According to the signatories, this language could make it harder for law enforcement agencies to investigate transactions linked to organized crime, child exploitation, sanctions evasion, and human trafficking.
Industry Rejected Criticism of the CLARITY Act
Representatives of the crypto industry pushed back against the criticism. Industry players argue that without provisions like these, developers will continue operating under legal uncertainty, while technology companies may increasingly move their business outside the United States.
Cody Carbone, CEO of industry association Digital Chamber, rejected the criticism raised by religious organizations.
“Section 604 makes it clear that non-custodial developers must not be classified as money transmitters. There needs to be a distinction between those who build tools and those who operate financial infrastructure,” he said.
The Bill Moves to the Next Stage of Review
On July 17, the US House of Representatives will hold official hearings on the CLARITY Act. Lawmakers will review the disputed provisions and attempt to strike a balance between financial oversight concerns and the interests of the crypto industry.