The United States Senate is set to vote this week on a resolution that aims to overturn the controversial Internal Revenue Service (IRS) crypto reporting rule. This rule has been a point of contention within the industry, with many arguing that it poses a threat to the decentralized finance sector.
Rumors of the Senate’s intention to challenge the IRS rule first surfaced at the end of February. Alongside this, lawmakers are also looking to overturn the Consumer Financial Protection Bureau (CFPB) rule, which focuses on digital payment applications.
Senator Ted Cruz has taken the lead in introducing the resolution against the IRS rule under the Congressional Review Act, while Senator Pete Ricketts has put forth a separate resolution to contest the CFPB rule. The Congressional Review Act allows for additional congressional oversight, enabling lawmakers and the comptroller general of the Government Accountability Office to review federal agency rules before they come into effect.
The IRS’ broker rule, which was unveiled in December 2024, requires decentralized crypto projects to disclose operational details and tax information. This has been met with strong opposition from the crypto industry, with concerns that the regulation could stifle innovation in the U.S.
On the other hand, the CFPB rule, introduced on January 10, 2025, seeks to extend consumer protections to the digital asset space, including stablecoins and other crypto payment options. By applying the Electronic Fund Transfer Act and Regulation E guidelines to the digital payment ecosystem, the rule aims to safeguard consumers. However, analysts have raised alarms about the potential negative impact on tech companies offering crypto wallets and payment apps.
If the Senate votes to repeal these rules, both the IRS reporting requirements and the CFPB payment application rule could be nullified. This move aligns with the broader effort by the new administration under President Donald Trump to shift away from the restrictive stance on crypto seen during the previous administration.
In a related development, following Trump’s recent announcement regarding a strategic crypto reserve for the U.S., House Representatives unveiled a bipartisan initiative to support the crypto industry. Led by House Republican Tom Emmer and Democrat Ritchie Torres, the Congressional Crypto Caucus aims to advocate for a more favorable regulatory environment for cryptocurrencies.
The outcome of the Senate vote on the IRS and CFPB rules will have significant implications for the future of the crypto industry in the U.S. As the debate continues, stakeholders are closely monitoring the developments to see how these regulatory challenges will shape the landscape of decentralized finance and digital payments in the country.