Discussions in the U.S. Congress regarding cryptocurrency tax rules are intensifying. The House Ways and Means Committee is reportedly circulating seven draft bills on digital asset taxation and is preparing to hold a hearing on the topic on June 9. Unlike pushing for a complete overhaul all at once, lawmakers are breaking the issue down into several separate bills for easier implementation.
Stablecoin payments to be promoted separately
One of the more noteworthy draft bills is the "Digital Asset Parity Act." First introduced on May 19th, this proposal's core focus is on reducing the likelihood of everyday encrypted payments triggering tax returns, addressing long-standing user complaints about the cumbersome tax processing for small payments.
This also shows that stablecoins have become a key focus of the current tax reform discussions. While regulators are still discussing a broader regulatory framework for cryptocurrencies, Congress is first focusing on how federal tax law should handle everyday digital asset transactions.
The proposed change is to change the taxation method from staking and mining to selling.
The method for taxing staking and mining is also a core element of this draft. For the past few years, miners and validators have opposed taxing income before selling rewards, arguing that this would create a situation where "taxes are paid on paper, but cash is not realized."
According to the currently leaked draft, staking and mining rewards will no longer be immediately included in taxable income upon acquisition, but rather the tax liability will be recognized upon actual sale. For relevant practitioners, this will significantly change the timing of tax liability recognition.
Lending and laundering rules are included together
Crypto lending has also been included in the scope of the review. The draft proposes to extend securities lending rules to digital assets, and eligible lending transactions will no longer be considered taxable sales. This means that some lending activities may receive a clearer tax exemption.
However, the draft bill is not entirely geared towards tax cuts. It also plans to introduce wash trading rules to the crypto asset sector for the first time. If investors declare tax losses and then buy back similar assets, they may need to wait 30 days to avoid triggering related restrictions.
Furthermore, the draft bill proposes to simplify the tax treatment of charitable donations of highly liquid tokens, while strengthening scrutiny of potential misuse of speculative assets. Overall, the US Congress is attempting to shift the crypto tax system from a fragmented approach to a more categorized management system closer to traditional financial assets.
