US President Donald Trump signed into law a bill on Thursday to overturn a revised rule by the Internal Revenue Service (IRS) that expanded the definition of a broker to include decentralized cryptocurrency exchanges.

The decision follows a broader policy shift announced earlier. Trump said he would temporarily suspend tariffs on many US trading partners while sharply increasing them on Chinese imports. The move reversed course less than 24 hours after new levies triggered a global market downturn. The White House said the pause would last 90 days for countries willing to negotiate new trade agreements.

IRS DeFi Rule Faces Legislative Repeal

The IRS rule, issued in the final weeks of the Biden administration, was updated in December 2024 to clarify that it would apply to decentralized finance (DeFi) exchanges. In response, both the House of Representatives and the Senate voted in March to reverse the IRS revision through the Congressional Review Act.

The crypto industry criticized the revised rule, arguing that it was unworkable for DeFi platforms. They stated that since DeFi exchanges do not act as intermediaries and do not have user data, they could not comply with the IRS reporting requirements.

You may want to read at financemagnates.com: President Trump Creates Crypto Working Group, Bans Digital Dollar.

IRS Rule Targets DeFi Tax Reporting

Centralized exchanges like Coinbase and Kraken act as intermediaries, while DeFi platforms allow users to transact directly on blockchain networks. The IRS rule, part of the 2021 bipartisan Infrastructure Investment and Jobs Act, aimed to ensure tax compliance by requiring brokers to send tax forms to both the IRS and digital asset holders.

Trump, who had previously expressed support for the cryptocurrency industry, had pledged to be a "crypto president." During his time in office, he ordered the creation of a cryptocurrency working group and signed an executive order to create a federal bitcoin stockpile.

Source: Finance Magnates