- Senate votes on resolutions to reverse IRS DeFi tax rule.
- Senator Cruz leads effort to rescind the IRS’s DeFi broker rule.
- White House plans March 7 summit on cryptocurrency regulations.
The U.S. The Senate is set to vote on a resolution that could reverse a controversial IRS rule affecting decentralized finance (DeFi). This rule, which the crypto industry has criticized, requires certain tax disclosures for crypto brokers. If the Senate approves the measure, it could significantly impact the future of DeFi projects in the U.S.
Senate votes on resolutions to reverse IRS and CFPB rule
Senator Ted Cruz introduced the resolution under the Congressional Review Act (CRA). The CRA allows Congress to overturn recently issued regulations within a specific timeframe. Cruz’s resolution aims to rescind the IRS’s DeFi tax disclosure requirement, which many argue could stifle innovation in the crypto space.
The IRS rule, finalized in December, extended broker obligations to cover decentralized finance projects. These projects, often built on blockchain technology, typically operate without a central intermediary. The new regulation mandates that DeFi platforms report certain user transactions to the IRS, a move that critics say could harm the industry.
Moreover, another Biden-era regulation faces scrutiny. The Consumer Financial Protection Bureau (CFPB) issued a rule targeting digital payment apps from large tech companies. This rule mandates that companies like Apple, Google, and Amazon undergo increased regulatory oversight, similar to that of U.S. banks.
Senator Pete Ricketts is leading the charge against the CFPB rule, also through a CRA resolution. Ricketts argues that the rule oversteps by applying heavy regulation to tech firms. He claims this will create unnecessary barriers to innovation and potentially harm job growth in the digital payments sector.
Senate Vote to Reshape Crypto and DeFi Landscape
These resolutions aim to address what lawmakers see as burdensome regulations. These measures, pushed by Republican lawmakers, align with broader efforts to reduce government interference in digital asset markets. The resolutions could gain significant traction due to support from both the Senate and the House.
If the Senate approves the resolutions, they will move to the House for a vote. If both chambers approve the measures, they will be sent to the president for signing into law. The timing is crucial, as the CRA imposes strict deadlines on reversing regulations issued within the final months of an administration.
White House crypto summit on March 7
The Biden administration’s push for these rules coincided with increased scrutiny of the cryptocurrency industry. Many believe that such regulations may push innovation outside the U.S., a concern voiced by critics of the IRS and CFPB rules. Congress now seeks to balance oversight and foster a favorable environment for emerging technologies like cryptocurrency and digital payments.
This week, the White House is also preparing for a summit on cryptocurrency, scheduled for March 7. The event will bring together key industry leaders and regulators to discuss the future of digital assets. These discussions could provide further insight into the regulatory landscape for cryptocurrencies and digital payments.