The United States House of Representatives has voted to revoke an IRS rule that would have imposed data collection obligations on decentralized finance (DeFi) platforms. With a bipartisan vote of 292 in favor and 132 against, Congress has advanced a resolution that prevents the tax agency from introducing similar rules in the future.
This decision has important implications for the cryptocurrency industry in the United States. The regulation, introduced in the final days of Joe Biden‘s administration, aimed to equate DeFi platforms with traditional financial brokers. However, critics argued that this rule was difficult to apply and risked stifling technological innovation in the sector.
Summary
A controversial IRS regulation: Donald Trump supports DeFi
“`htmlThe political debate on the regulation of cryptocurrencies has been heated. Representative Jason Smith, a Republican from Missouri, highlighted how the regulation could harm businesses in the United States and hinder the development of the digital sector.
“`“DeFi platforms are not like traditional stock exchanges or centralized financial institutions. These entities neither have the means nor the ability to collect the information requested by the IRS.”
On the other hand, the democrats defended the rule by arguing that it was in line with the regulation already applied to the stock markets. Danny Davis, a representative from Illinois, compared cryptocurrencies to stocks, stating that tax transparency is essential to ensure a fair system.
“When selling stocks through a broker, they automatically report the transaction to both the client and the IRS. This ensures that all gains are declared correctly.”
However, the republicans argued that the regulation went beyond the original intentions of the 2021 infrastructure law from which it originated. According to North Carolina Representative Tim Moore, it would have placed unsustainable burdens on software developers and threatened American leadership in cryptocurrency innovation.
A possible presidential veto?
“`htmlThe resolution has already obtained the support of the Senate, where 70 senators voted for the repeal of the rule. However, the legislative procedure requires further confirmation before it can be forwarded to President Donald Trump for the final signature.
“`Trump’s allies have already stated that the president is in favor of revoking the rule. If he signs the resolution, the IRS will no longer be able to introduce similar regulations in the future. This would represent a significant victory for the cryptocurrency industry and for those who support less oppressive regulation of the sector.
Not everyone, however, agrees with this decision. Lloyd Doggett, democratic representative from Texas, criticized the resolution, calling it an “act in favor of the interests of large companies”. He also highlighted how this move could favor tax evasion, drug trafficking, and the financing of terrorism. According to Doggett, repealing the rule would result in a loss of 4 billion dollars for the American treasury, going against Trump’s goal of reducing public debt.
Next steps
Before the vote on the IRS regulation, the House also approved a resolution for the funding of the federal government until September 30, 2025. This measure received 217 votes in favor and 213 against and will now be reviewed by the Senate.
In the meantime, the world of cryptocurrencies is attentively awaiting the final outcome of the resolution on the IRS. If confirmed, this decision will mark an important turning point for the DeFi sector, preventing future similar regulations and leaving more room for technological innovation.
