The U.S. Senate is set to vote this week on a resolution to repeal an Internal Revenue Service (IRS) rule that has drawn strong opposition from the crypto industry due to its potential impact on decentralized finance (DeFi).
Lawmakers are using the Congressional Review Act (CRA) to challenge that regulation and another last-minute rule from the Consumer Financial Protection Bureau (CFPB) affecting digital payment apps, according to a source familiar with Senate planning.
The IRS rule, introduced in December, sought to expand the definition of intermediaries that must report tax information. The change was met with resistance from the crypto industry, which argued that DeFi platforms would be unfairly targeted. Senator Ted Cruz is leading a Senate resolution to eliminate the IRS regulation, while Senator Pete Ricketts is leading a similar effort against the CFPB rule.
“The Biden administration has done everything it can to stifle financial innovation in the United States by threatening to send digital asset companies overseas,” Majority Leader John Thune said. “The Senate is working to roll back these burdensome regulations one by one to restore financial freedom for the American people.”
The House Financial Services Committee recently introduced a resolution targeting the IRS rule, paving the way for a vote in the House. If the Senate approves, the resolution will require the President’s signature to become law.
“In a stroke of midnight, the Biden administration issued a decentralized finance rule that will directly and immediately harm American crypto innovation and drive development offshore,” Senator Cruz said. “This week, Congress will vote on my resolution to repeal this regulation. I am confident we will do so.”
The CRA sets strict deadlines for repealing federal agency regulations, as each measure must be repealed within a limited legislative session after it is passed. The Senate effort reflects broader Republican priorities and echoes moves by former President Donald Trump’s administration to dismantle regulations enacted by his Democratic predecessors.
The CFPB rule, which has also been targeted by lawmakers, aims to regulate big tech companies that operate digital wallets and process high-volume consumer payments, such as Apple, Amazon and Google, under a framework similar to major U.S. banks. Senator Ricketts criticized the rule as a rushed effort following the Biden administration’s election loss.
*This is not investment advice.
