- Senate vote signals bipartisan support for balanced digital asset regulations.
- IRS rule repeal safeguards DeFi innovation from excessive government oversight.
- The House decision will determine the future of U.S. crypto tax regulations.
The U.S. Senate has voted decisively to repeal the Internal Revenue Service’s (IRS) DeFi broker rule, in what amounts to a significant shift in digital asset regulation.
The resolution, championed by Senator Ted Cruz, passed with a strong 70-27 majority, showing robust bipartisan support.
Senate Backs Crypto Industry: IRS Rule Repeal Heads to House
With this victory in the Senate, the resolution now moves to the House of Representatives for consideration. If passed, it will prevent the IRS from implementing similar regulations in the future. This action marks a crucial step in protecting financial innovation and digital privacy in the U.S.
Crypto Innovation & Privacy Get Senate Boost
The IRS rule aimed to expand tax reporting requirements for cryptocurrency transactions, including those involving decentralized finance (DeFi) platforms. However, opponents argued the rule was overly burdensome and technologically unfeasible.
Critics, including digital asset advocacy groups, asserted that the rule would force software developers to act as brokers and disclose user information, even when they have no control over transactions. Such measures could drive financial innovation overseas, limiting growth in the U.S. digital asset sector.
Senator Cruz: Repeal “Major Win for American Innovation”
Senator Cruz stated that the repeal of this rule is a major victory for American innovation. The move protects decentralized systems from government overreach and ensures that developers are not unfairly subjected to regulatory burdens.
The strong bipartisan backing for the resolution reflects a growing agreement that digital assets need balanced, thoughtful regulation rather than stifling restrictions.
Broader Battle Over Crypto Regulation
The repeal of the IRS rule is not an isolated event but part of a larger push against heavy-handed cryptocurrency regulations.
The Senate also advanced a resolution to overturn a Consumer Financial Protection Bureau (CFPB) rule affecting fintech apps.
CFPB Rule on Non-Custodial Wallets Also Targeted
The CFPB rule extends obligations under the Electronic Funds Transfer Act to non-custodial crypto wallets. Industry experts argue that compliance is nearly impossible because non-custodial wallets do not hold user funds.
Senator Pete Ricketts spearheaded the effort to roll back the CFPB rule, highlighting the importance of protecting digital financial services from excessive regulation.
Related: IRS Delays Crypto Tax Rules as BlackRock Joins Stablecoin Race
The final vote on this measure is expected soon, potentially marking another victory for the digital asset industry.
House Vote & Presidential Approval Next Steps
The House of Representatives must now decide the fate of the IRS rule repeal.
Related: IRS’s DeFi Broker Rule Faces Backlash, Ripple CTO Highlights Risks
The House Financial Services Committee has already cleared a matching resolution, which suggests strong support. If the House approves the measure, it will move to the president for final approval. With signals from the White House suggesting support for the repeal, the resolution may soon become law.
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