Lawmakers in the United States have taken a significant step towards protecting user privacy and supporting the growth of decentralized finance platforms by voting to scrap the controversial IRS DeFi broker rule. The rule, which would have required decentralized exchanges and other DeFi platforms to report user transaction details to the IRS, faced strong opposition from both Republicans and Democrats.
The bipartisan support for repealing the rule was evident in the U.S. House of Representatives vote, where a resounding 292-132 majority favored overturning the rule on March 11. Notably, 76 Democrats joined their Republican counterparts in backing the repeal, highlighting the widespread concerns over the compliance burden and privacy implications of the rule.
Critics of the IRS DeFi broker rule argued that it represented a significant government overreach and threatened the privacy of millions of Americans. Republican Representative Mike Carey described the rule as a threat to individual privacy and an impediment to the growth of the digital asset industry. Similarly, House Financial Services Committee Chairman French Hill warned that the rule could drive innovation overseas by stifling the development of digital assets in the United States.
The Senate also played a crucial role in overturning the rule, voting 70-27 in favor of repealing it on March 4. With both chambers of Congress united in their opposition to the rule, the resolution now awaits a final vote in the Senate before reaching President Donald Trump’s desk. The White House has already indicated support for repealing the rule, signaling a likely approval of the resolution.
The decision to scrap the IRS DeFi broker rule is a significant victory for user privacy and the decentralized finance industry. By removing the compliance burden on DeFi platforms and safeguarding user data, lawmakers have taken a crucial step towards fostering innovation and growth in the digital asset space. As the resolution moves towards final approval, the future looks brighter for decentralized finance platforms and the millions of Americans who rely on them for financial services.