House votes to nullify IRS DeFi broker rule as Financial Services Committee deliberates on stablecoin framework

The House of Representatives met on Tuesday to vote on repealing the Internal Revenue Services (IRS) DeFi broker rule, which sought to impose data collection rules on DeFi platforms. The Senate will make a final vote on the resolution, which, if it passes, would prevent the IRS from proposing such a framework again.

Meanwhile, the Financial Services Committee met for a hearing where members discussed the proposed Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act alongside other legislative proposals.

House votes against controversial DeFi law

The US House of Reps moved to resolve a controversial proposal from the IRS to regulate DeFi platforms. In a bipartisan vote of 292 to 132, decision-makers settled to repeal the IRS DeFi broker rule, first introduced by former President Joe Biden's administration in December.

"Joined by 76 Democrats, a bipartisan coalition in the House just passed a resolution rescinding the IRS' unworkable DeFi broker rule which would have set a dangerous precedent for Americans' privacy," said Coinbase Chief Policy Officer Faryar Shirzad in an X post on Tuesday.

The rule opted to identify crypto entities as brokers, including DeFi platforms, thereby obligating them to report details of their users' transactions and their potential tax requirements.

The rule faced strong opposition as it allowed the IRS to expand its tax requirements to decentralized platforms.

Several government officials, including AI and Crypto Czar David Sacks, highlighted the rigor that would come with this rule on DeFi platforms. Sacks stated in an X post that the White House would back the efforts of Congress to repeal the broker rule.

The move to abolish the proposal will be subject to a final vote by the Senate. If it passes at the Senate level, the joint resolution will go on to President Donald Trump's table for signing. Once signed, the IRS will be prohibited from issuing such proposals again.

Financial Services Committee reviews stablecoin framework

While the House rescinded the DeFi rule, the Financial Services Committee held a hearing to deliberate on stablecoin payment regulations in the US.

The hearing explored the potential of blockchain technology, focusing on stablecoins in payments. It also observed the implications of the Committee's STABLE Act on stablecoin payments issuers and consumer protection.

"A properly regulated stablecoin market can strengthen the U.S. dollar's dominance, modernize our payments infrastructure, and promote financial access without government overreach," said Financial Committee Chairman French Hill at the hearing.

The Committee aims for the bill to become a framework for stablecoin payments regulation in the US. So far, it has won the support of several industry leaders present for the hearing.

"We commend this Committee for its work to develop a targeted federal framework that addresses threshold questions such as who can issue stablecoins, who can hold stablecoin reserves, and the types of assets that comprise those reserves," Caroline Butler, Global Head of Digital Assets at The Bank of New York Mellon Corporation shared.

This comes after Senator Bill Hagerty, alongside other members of the Senate, released an update to the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.

The updated bill aims to provide a suitable framework for regulating stablecoins, including clarity on the requirements for foreign issuers to launch stablecoins in the US.

The bill is set for a markup by the Senate Banking Committee, House Financial Services Committee, and Urban Affairs on Thursday.