Introduction: A Change in DeFi Rules
The White House has decided to support getting rid of a controversial IRS rule that affects the world of decentralized finance (DeFi). This change was suggested by David Sacks, who worked on AI and crypto in the Trump administration. The rule says that software providers who help with DeFi transactions are like brokers and must follow special rules.[1][3][5] This is a big deal because it’s part of a big debate about how to make rules for digital money without stopping new ideas.
Understanding the DeFi Broker Rule
The IRS rule was agreed on in December 2024, just before the U.S. government changed leaders. It makes DeFi projects report lots of information about transactions and collect personal data like names and what people have done.[3][5] This has made people worry about privacy and how hard it is for small DeFi businesses to follow the rules, since they are often new startups or people working together on open-source projects.[3][5]
Why People Don’t Like This Rule
The people who work with crypto don’t like this rule. They think it doesn’t understand how DeFi works and might stop new ideas from happening. The Blockchain Association has said this could hurt the American digital money industry.[3] People are also worried about privacy because the rule would make them share personal information.[3][5]
Trying to Get Rid of the Rule
Senator Ted Cruz and Representative Mike Carey have started a plan to get rid of this rule using something called the Congressional Review Act (CRA).[1][3] The CRA lets Congress say no to new rules with a simple vote.[3] The White House says it will support this plan if it passes, and the President would probably sign it into law.[1][3][5]
What Could Happen if the Rule Goes Away
If this rule is gone, it would be easier for U.S. DeFi businesses to follow the rules, so they can focus on coming up with new ideas instead.[5] It would also help with privacy because there wouldn’t be as much need to collect and share personal information.[3][5]
Conclusion: A New Way for DeFi Rules
The White House’s support for getting rid of the DeFi broker rule is a big moment in how we make rules for digital money. If this happens, it would help with privacy and let new ideas happen more easily in the U.S. As the rules keep changing, it’s important for the people who make them to find a good balance between watching what happens and helping new technologies.[1][3][5]
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Sources:
– cointelegraph.com
– cryptobriefing.com
– chaincatcher.com