In a major breakthrough for the digital asset sector, President Donald Trump signed into law bills that repealed an IRS regulation that would have imposed additional tax reporting requirements on cryptocurrency transactions, including DeFi platforms. It is the first cryptocurrency bill enacted into law in the United States, and it represents a major change in federal crypto policy.

Bipartisan Support Reverses Biden-Era IRS Rule

The Economic Times reports that according to a White House statement, US President Donald Trump signed a bill into law on Thursday that repeals a recent IRS rule that expanded the definition of a “broker” to include decentralized bitcoin exchanges. This rule went into effect in the last few weeks of the Biden administration in December 2024. It broadened the IRS’s new crypto tax reporting rules to cover DeFi platforms. 

A tax rule introduced by the Biden administration aimed to treat DeFi platforms and cryptocurrency wallet manufacturers as “brokers” and force them to collect and report user information to the IRS.  Critics argued that the mandate was unfair and unworkable, especially for platforms that do not collect user identities.

Both the House and Senate in March voted to overturn the rule through the Congressional Review Act, which allows lawmakers to repeal new federal regulations with a simple majority vote. The official Press release notes that, 

“U.S. Representative Mike Carey (R-Ohio-15), a member of the House Ways and Means Committee, attended the signing ceremony where President Trump signed his bill, which repealed the Internal Revenue Service (IRS) Digital Assets Sale and Exchanges Rule, otherwise known as the “DeFi Broker Rule,” into law. This is the first cryptocurrency bill ever signed into law and the first tax-related Congressional Review Act of Disapproval (CRA) signed into law.”

According to Reuters, in March, both the House and Senate voted to repeal a revised IRS rule through the Congressional Review Act, which permits Congress to overturn new federal regulations with a simple majority. The crypto industry had strongly criticized the rule, saying it was impractical for decentralized finance (DeFi) platforms and had called on Republican lawmakers to rescind. It further reports that, 

“Centralized exchanges such as Coinbase and Kraken act as the intermediary between buyers and sellers, while DeFi exchanges aim to cut out the middleman and allow users to transact directly on a blockchain network, which powers cryptocurrencies.”

The repeal had significant bipartisan support in both the House and the Senate, showing an unusual move by some Democrats to oppose a policy proposed by former President Biden just months after he left office.

Strategic Policy Shift for Trump Administration

By signing the repeal, Trump not only overturned the IRS rule but also signaled a broader push to ease digital asset regulations. The move aligns with his administration’s goal to position the U.S. as a crypto-friendly nation amid growing global competition. It also reflects Trump’s wider strategy to promote Bitcoin, set his policies apart from the previous administration, and appeal to the growing community of crypto supporters.

Although the repeal does not do away with all IRS crypto-reporting requirements, it significantly alters how decentralized organizations will be treated under US tax law going forward. The IRS is now forced to begin anew and develop a fresh paradigm that differentiates between centralized and decentralized operators more distinctly.

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