DeFi Taxation New Regulations: The Beginning of a New Financial Colonial Era in the United States

The U.S. Treasury Department and the IRS recently released an important new regulation that includes front-end service providers of DeFi under the definition of "broker." This means that starting from 2026, platforms including decentralized exchanges will need to collect user transaction data and submit relevant information to the IRS starting in 2027. Although there is still some time before the new regulation is implemented and the definition of "broker" is controversial, this move undoubtedly marks a significant shift in the U.S. regulatory policy regarding digital assets.

From Traditional Colonization to New Financial Colonization

Traditional colonial resource logic

During the traditional colonial era, resource plunder was mainly achieved through military force and territorial occupation. For example, Britain controlled India's cotton and tea through the East India Company, while Spain plundered gold from Latin America. These are typical cases of direct resource possession leading to wealth transfer.

Modern Model of Financial Colonialism

Modern colonialism is centered on economic rules, achieving wealth transfer through capital flows and tax control. The United States' Foreign Account Tax Compliance Act (FATCA) is an important embodiment of this logic, requiring global financial institutions to disclose asset information of U.S. citizens. The new tax regulations for DeFi are a continuation of this model in the digital asset space, with the core focus on utilizing technological means and rules to enforce global capital transparency, allowing the U.S. to acquire more tax revenue while strengthening its control over the global economy.

America's New Colonial Tools

Tax Regulations: From FATCA to Decentralized Finance New Rules

Tax rules are the foundation of the new colonial model in the United States. FATCA mandates global financial institutions to disclose asset information of U.S. citizens, setting a precedent for the weaponization of tax. The new regulations on DeFi taxation further extend this logic by requiring DeFi platforms to collect and report user transaction data, thereby expanding U.S. control over the digital economy.

The Combination of Technology and the US Dollar: The Dominance of Stablecoins

In the 200 billion USD stablecoin market, dollar stablecoins account for over 95%, with the underlying anchor assets primarily being U.S. Treasury bonds and dollar reserves. Dollar stablecoins have reinforced the global status of the U.S. dollar through their application in the global payment system, locking more international capital into the U.S. financial system.

The Appeal of Financial Products: Bitcoin ETF and Trust Products

The Bitcoin ETFs and trust products launched by Wall Street giants have attracted a large influx of international capital into the U.S. market through legalization and institutionalization. These financial products not only provide greater enforcement space for U.S. tax rules but also further incorporate global investors into the U.S. economic ecosystem. The current market size has reached $100 billion.

Real Asset Tokenization (RWA)

Tokenization of real assets is becoming an important trend in the field of Decentralized Finance. The scale of tokenization of U.S. Treasury bonds has reached $4 billion. This model enhances the liquidity of traditional assets through blockchain technology, while also creating new dominance for the U.S. in the global capital markets.

Economy and Finance: Deficit Pressure and Tax Equity

US Deficit Crisis and Tax Loopholes

In the fiscal year 2023, the U.S. federal deficit approached $1.7 trillion, while the global market value of cryptocurrencies once exceeded $3 trillion, yet most of it remains outside the tax system. This is intolerable for modern nations that rely on tax revenues.

Defending Financial Sovereignty and the US Dollar

The rise of DeFi and stablecoins challenges the dominance of the US dollar in the global payment system. Through tax regulation, the United States aims not only to gain fiscal benefits but also to re-establish control over capital flows and defend the hegemony of the dollar.

Industry Perspective: Choices and Trade-offs for Practitioners

Importance Assessment of the US Market

Practitioners in DeFi projects need to rationally assess the strategic value of the U.S. market for their business. If the main trading volume and user base come from the U.S. market, an exit could mean significant losses. On the contrary, if the U.S. market share is not high, a complete exit becomes a viable option.

Three Major Response Strategies

1. Partial compliance: Establish a subsidiary in the United States, separate the protocol from the frontend, and introduce a KYC mechanism.
2. Complete Exit: Implement geographical blocking, focusing on markets more favorable to cryptocurrency such as Asia-Pacific, the Middle East, and Europe.
3. Complete Decentralization: Abandon front-end services and fully transition the platform to protocol autonomy, developing trustless compliance tools.

Deeper Thoughts: The Future Game of Regulation and Freedom

The evolution of legislation and long-term trends

In the short term, the industry may delay the implementation of regulations through litigation. However, in the long run, the trend towards compliance is difficult to reverse. Regulation will drive the DeFi industry to become polarized: on one end are large platforms that are fully compliant, while on the other end are small decentralized projects that choose to operate in secrecy.

Philosophy Reflection on Freedom and Control

The core of DeFi is freedom, while the core of government is control. This game has no end. The future of the cryptocurrency industry may exist in the form of "compliant decentralization": a coexistence of technological innovation and regulatory compromise, with privacy protection and transparency advancing alternately.

Conclusion

This bill is an inevitable result of the development of political, economic, and cultural logic in the United States. For the DeFi industry, this is both a challenge and an opportunity for transformation. At this historical juncture, how to balance compliance and innovation, protect freedom and bear responsibility is a question that every practitioner must answer. The future of the cryptocurrency industry depends not only on technological advancements but also on how it finds its position between freedom and rules.