Cryptocurrency Industry Scores Significant Victory with IRS Rule Repeal, Gains Momentum in Congress

The crypto industry has achieved a major victory with the recent repeal of an IRS rule, marking a significant shift in its relationship with Congress. Just a few years ago, the industry was met with skepticism, but it now has staunch allies in the White House and US financial agencies. The successful votes in the Senate and House of Representatives to overturn the IRS rule on decentralized finance projects demonstrate that the industry's support among lawmakers runs deep, with many Democrats joining Republican allies to pass the measures. This newfound support could lead to more favorable legislation for the industry, including bills on stablecoins and market-structure rules. The industry's ability to advocate for its interests has been bolstered by the efforts of groups such as the Blockchain Association and the Fairshake political action committee, which has expended significant funds to support pro-crypto lawmakers. As a result, the industry may be able to push for more expansive legislation without having to make significant compromises. The digital assets bill closest to completion is the effort to govern US stablecoin issuers, with both the House and Senate versions making progress. The industry's ultimate goal is to establish a clear system of regulations for US crypto trading and transactions, which could eliminate legal uncertainty and negate the need for court intervention. Lawmakers are building on previous efforts, including the Financial Innovation and Technology for the 21st Century Act, which passed the House in the last session. The rare bipartisan cooperation on crypto issues could allow lawmakers to focus on the actual policy, rather than partisan politics. The industry's growing influence in Congress can be attributed to the influx of new allies after the 2024 elections, as well as the efforts of pro-crypto groups to support lawmakers who share their views. With significant funds at their disposal, these groups are well-positioned to continue advocating for the industry's interests in the years to come.