A critical development has occurred for the cryptocurrency markets and the decentralized finance (DeFi) sector. On March 4, the US Senate took a significant step towards repealing a controversial crypto reporting requirement that was enacted during the Biden administration. Senators voted 70-27 to repeal the regulation that required DeFi protocols to submit mandatory reports to the US Internal Revenue Service (IRS).
A Critical Turning Point for Crypto
This rule, introduced during the Biden era, aimed to expand the IRS’ reporting obligations. It was required to report income from crypto sales to brokers and tax information of investors involved in these transactions, including decentralized exchanges. However, experts in the sector argued that this was impractical in practice and contrary to the nature of DeFi.
Eli Cohen of Centrifuge said that this regulation “never made sense and has no real-world application,” and that the repeal was a timely decision.
House of Representatives and President Trump Approval Required
The Senate’s move follows a similar initiative in the House of Representatives. Although House members took steps to repeal the regulation on February 26, it has not yet been put to a floor vote.
In order for this decision to become law, it must first be approved by the House of Representatives and then signed by President Donald Trump. Trump’s AI and crypto advisor David Sacks announced that the president supports repealing this regulation.
A Major Victory for the Industry
The Senate’s decision is considered the first major test of the most crypto-friendly Congress in the US so far. Kristin Smith, CEO of The Blockchain Association, stated that the decision is a major victory for the DeFi ecosystem and the US crypto sector. It is stated that this development is an important sign that a more balanced approach can be adopted among policymakers in Washington regarding crypto regulations.
Financial Freedom or Consumer Protection?
On March 4, the Senate also voted to repeal a Consumer Financial Protection Bureau (CFPB) regulation affecting fintech payment apps.
Senate Majority Leader John Thune emphasized that these steps are part of an effort to correct overregulation and are aimed at restoring financial freedom. Supporters of the CFPB rule, on the other hand, argue that the regulation provides critical protections for consumers, while critics argue that it imposes unnecessary burdens on developers.
US Crypto Policy is Reshaping
These decisions taken by the US Senate mark a critical turning point in the future of regulation in the crypto and fintech sector. Crypto-friendly policies and regulatory clarity can strengthen the US’s position in the global crypto market. However, these changes cannot be made official without the approval of the House of Representatives and President Trump.
The developments that will take place in the coming days are of great importance for the future of US cryptocurrency policies. In particular, the vote in the House of Representatives and the decision made by President Trump will be decisive for the sector.
Author: Furkan
