DeFi Regulation: A Big Change is Coming!
The White House has some big news for the world of decentralized finance, or DeFi for short. They’re supporting a plan to get rid of a rule that was causing some trouble in this fast-growing part of the crypto world. This rule, pushed by the IRS, was making it hard for DeFi projects to operate and was also raising some serious privacy concerns.
What’s the Deal with this DeFi Rule?
The rule in question was approved late last year, just before the new U.S. government took over. It was making DeFi projects collect lots of detailed information about their users, like who they are and what transactions they’ve made. This was a big worry for DeFi businesses, many of which are small startups or open-source projects. They were concerned about the extra work this would mean and the privacy of their users.
Why is Everyone Upset about This?
The crypto industry is not happy about this rule. They think it’s not fair to treat DeFi software providers like brokers. They’re also worried that this rule could stop new ideas from happening in the American digital asset world. Plus, there are big privacy concerns. This rule would mean sharing sensitive information about taxpayers.
Can This Rule Be Stopped?
Yes, there’s a way to stop this rule! Senator Ted Cruz and Representative Mike Carey have started a process called the Congressional Review Act (CRA) to get rid of this rule. If they succeed, the President would likely sign it into law. The White House has said they support this plan.
What Happens if the Rule is Gone?
If this rule is repealed, it would be a big help to U.S. DeFi businesses. They wouldn’t have to spend so much time and money on following the rules, and could focus on coming up with new ideas instead. It would also mean less sharing of private information, which is a good thing for everyone’s privacy.
Looking Ahead: A New Path for DeFi
The White House’s support for getting rid of this DeFi rule is a big deal. It shows that they’re listening to the concerns of the crypto industry and want to help DeFi grow in the U.S. As the rules for digital assets keep changing, it’s important for the people in charge to find a good balance between keeping things safe and letting new technologies thrive.