The White House has officially backed a resolution aimed at repealing the IRS rule for DeFi developers, underscoring the importance of this issue for blockchain innovation in the U.S.
Pushback Against IRS Rule
The IRS rule expands tax reporting requirements to DeFi developers and software providers. Critics argue that this classification is impractical as DeFi platforms lack centralized control over user transactions. Many protocols rely on smart contracts that automate processes without direct human intervention. Consequently, requiring DeFi developers to report transactions is nearly impossible since they do not manage user funds or identities.
Broader Implications for Crypto Regulation
The upcoming Senate vote on the CRA resolution could significantly impact the future of U.S. crypto regulation. The vote, initially expected on March 5th, may be delayed due to the State of the Union address. However, if successful, it may signal a shift towards a more pro-innovation approach.
White House Stance and Political Interest
Additionally, the development of the DeFi debate comes amid heightened political interest in cryptocurrency. Over the weekend, former President Donald Trump expressed support for a crypto reserve. There is also a plan for a high-level meeting of regulators and crypto leaders at the White House. The Commodity Futures Trading Commission (CFTC) is arranging a forum with crypto executives.
The White House's support for the CRA resolution illustrates a governmental commitment to fostering a favorable regulatory environment for blockchain innovation while retaining U.S. leadership in digital finance.
