In a surprising twist, Congress has just taken a sledgehammer to Biden’s IRS rule on decentralized finance (DeFi), and it’s about time. The rule, finalized in December 2024 and slated for a January 2027 rollout, aimed to classify DeFi trading front-end services as “brokers.” What a joke! This would have forced them to report user transactions. Critics were quick to point out that this move completely undermined DeFi’s entire decentralized nature.
Enter the Congressional Review Act (CRA), a handy tool that Congress used to repeal the rule, and boy, did they do it in style. On March 4, the Senate voted 70-27 to ditch the IRS measure. A bipartisan group rallied together—Seventeen Democrats joined all Republicans to say, “No thanks!” This wasn’t just a political stunt; it was a significant win for the crypto community.
Congress flexed its muscles, using the CRA to repeal the IRS DeFi rule in a stunning bipartisan victory for the crypto community.
The House followed suit with a decisive 292-132 vote, where 76 Democrats teamed up with 216 Republicans. It was a clear message: American innovation matters. Chairman Jason Smith even pointed out how this rule could hurt American businesses. The successful repeal underlines the importance of IRS rule classification in supporting the decentralized ethos of DeFi. Additionally, the Senate voted to overturn two crypto-related regulations, highlighting a growing bipartisan effort to support the industry. Blockchain technology ensures the integrity of transactions without the need for traditional intermediaries.
The implications are huge. DeFi platforms are built on decentralization. They can’t gather the user data needed to comply with traditional broker regulations. So, the repeal isn’t just a political victory; it’s a lifeline for innovation in blockchain finance. It solidifies America’s position as a leader in digital assets and encourages more people to get involved in this rapidly growing market.
Of course, the rule was criticized for going beyond congressional intent from the 2021 infrastructure law. Concerns about losing American leadership in digital assets loomed large. Who wants to see foreign countries benefit from U.S. regulatory blunders?
The crypto community is buzzing. Coinbase hailed it as the most significant bipartisan crypto vote to date. As the resolution edges toward final approval, it looks like America is ready to embrace a crypto-friendly future.
