The decision was made after a similar Senate vote, and if approved again, it will go to President Trump. Meanwhile, the Senate Banking Committee is preparing to vote on the updated GENIUS Act, which is a stablecoin regulation bill that could grant US-issued stablecoins a competitive edge. Additionally, Senator Cynthia Lummis reintroduced the BITCOIN Act, which will allow the US government to hold more than 1 million Bitcoin.
DeFi Broker Rule Repeal Gains Momentum
The US House of Representatives voted to nullify a controversial rule that would have required decentralized finance (DeFi) protocols to report to the Internal Revenue Service (IRS). In a March 11 vote, 292 representatives supported the repeal, while 132 opposed it. The regulation is commonly referred to as the IRS DeFi broker rule, and it was going to expand existing tax reporting requirements to encompass DeFi platforms. As a result, they would have had to disclose gross proceeds from crypto transactions along with taxpayer information.
The vote saw strong Republican backing, with some bipartisan support as 76 Democrats joined their counterparts in favor of overturning the rule. The decision was made after the US Senate’s earlier March 4 vote, where the motion also passed with a majority of 70 to 27. If it clears another Senate vote, it will be sent to President Donald Trump, who has made it very clear that he is ready to approve the repeal.
Proponents of the repeal argue that the rule constitutes government overreach and could stifle innovation in the crypto sector. Republican Representative Mike Carey, who introduced the motion, is concerned about privacy violations and the potential harm the rule could inflict on the US crypto industry. House Financial Services Committee Chairman French Hill agrees, and believes that the regulation will push digital asset development outside of the United States.
On the other hand, opponents argue that removing the rule will create tax loopholes and facilitate illicit financial activity. Democrat Representative Lloyd Doggett criticized the repeal effort by arguing that it will make tax evasion and money laundering easier for wealthy people and criminal organizations. He warned that eliminating the regulation could lead to increased financial crime through decentralized exchanges.
The debate over the rule also attracted attention from the White House. AI and crypto czar David Sacks previously stated that the administration supports the repeal. Officials from the Office of Management and Budget also voiced concerns over the rule’s impact on innovation and privacy, and argued that it will impose excessive compliance burdens on American DeFi companies.
Its ultimate fate now rests on another Senate vote before potentially being enacted with presidential approval.
Senate Banking Committee to Vote on Stablecoin Bill
In other regulatory news, the US Senate Banking Committee is set to vote on a Republican-led stablecoin framework bill on March 13 after it was updated. Senator Bill Hagerty, one of the bill’s co-sponsors, announced on March 10 that the revised version of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act will proceed to the committee for consideration. The bill was originally introduced in early February, and was co-sponsored by Republican Senators Cynthia Lummis and Tim Scott, alongside Democratic Senators Kirsten Gillibrand and Angela Alsobrooks.
The updated bill includes several key revisions addressing consumer protections, stablecoin issuers, risk mitigation, insolvency, and transparency. Senator Gillibrand said that these improvements were made to ensure a more robust regulatory framework while also accommodating input from both parties.
One of the main provisions of the bill is that stablecoin issuers with market caps exceeding $10 billion, like Tether’s USDT and Circle’s USDC, will be subject to Federal Reserve oversight. Those below the threshold could opt for state-level regulation.
The bill started a lot of discussions about its potential impact on US-issued and foreign stablecoins. Dom Kwok, co-founder of Web3 learning app EasyA, pointed out that the latest version of the bill gives US-issued stablecoins a competitive advantage by imposing stringent requirements on foreign issuers. These include high standards for reserves, liquidity, anti-money laundering checks, and sanctions compliance, making it difficult for most foreign issuers to compete. Crypto lawyer Jeremy Hogan noticed that the bill’s provisions align well with US-issued stablecoins like Circle’s USDC and Ripple Labs’ Ripple USD.
Despite the progress, the GENIUS Act still has a long way to go before becoming law. If the Senate Banking Committee approves it, the bill will move to a full Senate vote, where it may face further debate. If it passes the Senate, it will proceed to the House of Representatives. Should the House approve the bill without modifications, it will be sent to President Donald Trump for either approval or a veto.
Senator Lummis Revives Bill to Expand Bitcoin Reserves
Senator Cynthia Lummis also recently reintroduced the BITCOIN Act, which is a bill that could allow the US government to hold more than 1 million Bitcoin as part of a newly established strategic reserve. It was originally introduced in July, and mandates the US government to buy 200,000 Bitcoin annually over five years by using funds diversified from the Federal Reserve system and the Treasury Department. However, the updated version expands the government’s ability to acquire Bitcoin through legal means beyond direct purchases, including civil and criminal forfeitures, gifts, and transfers from federal agencies.
Additionally, US states that choose to store their Bitcoin holdings in the strategic reserve can contribute to the government’s total, though these funds will be kept in segregated accounts. According to Senator Lummis, making this initiative law will help address national debt while also maintaining the country’s leadership in digital innovation. She introduced the updated bill on March 11 at a conference that was hosted by The Bitcoin Policy Institute.
The bill gained several new co-sponsors, including Republican Senators Jim Justice, Tommy Tuberville, Roger Marshall, Marsha Blackburn, and Bernie Moreno. Justice praised the initiative, and called it a “common-sense bill” that strengthens economic security and provides a potential tool for managing national debt.
The updated bill introduces changes regarding Bitcoin forks and airdropped assets held in the reserve. The original bill required all forked assets to be held for a minimum of five years without being sold or disposed of unless authorized by law. The revised version now mandates a formal evaluation process after the holding period, allowing the Secretary to retain the most valuable asset based on market cap while keeping the dominant Bitcoin asset. This change acknowledges Bitcoin’s history of forking, like the creation of Bitcoin Cash in 2017 and Bitcoin Gold later that same year.
Lummis’ reintroduction of the bill follows President Donald Trump’s recent executive order establishing a Strategic Bitcoin Reserve and a Digital Asset Stockpile. The reserve will initially be funded by Bitcoin that was confiscated in criminal and civil cases. The BITCOIN Act’s progress in Congress will determine the extent to which the US government formally integrates Bitcoin into its financial and economic framework.
This article was originally Posted on Coinpaper.com
