Congress Debates Whether Crypto Tax Relief Should Extend Beyond Stablecoins
Congress is weighing whether tax relief for digital assets should be limited to stablecoins or expanded to cover a broader range of cryptocurrency transactions, placing Bitcoin, staking rewards and on-chain activity at the center of a growing policy debate in Washington.
The issue is expected to take center stage June 9 when the House Ways and Means Committee holds a hearing on digital asset taxation. According to CryptoSlate, lawmakers will hear testimony from representatives of Fidelity Investments, Coinbase, Coin Center and New York University’s Tax Law Center as they examine whether current tax rules are discouraging everyday crypto use.
The industry has long argued that the IRS treats cryptocurrencies as property instead of currency. As a result, users may have to calculate capital gains or losses each time they spend crypto, trade tokens, or pay blockchain transaction fees.
The hearing comes as Congress continues advancing legislation aimed at integrating digital assets into the financial system. The GENIUS Act, signed into law last year, established a federal regulatory framework for payment stablecoins, while the CLARITY Act recently advanced in the House as lawmakers work to define oversight responsibilities for the crypto sector, Reuters reported.
While stablecoin regulation has moved forward, lawmakers are now confronting a separate question — whether tax rules should be updated to make digital assets easier to use.
CryptoSlate noted that one proposal attracting attention is the Digital Asset PARITY Act, a package that would address stablecoin payments, mining and staking rewards, charitable donations, lending transactions and other tax issues affecting digital asset users.
A key provision would allow qualifying regulated stablecoin payments to receive tax treatment similar to cash transactions. Supporters argue that approach reflects the growing role of dollar-backed stablecoins in payments and settlement systems.
The proposal, however, has sparked debate because similar relief would not automatically apply to Bitcoin or other cryptocurrencies. Under current IRS rules, spending Bitcoin generally remains a taxable event, requiring users to track cost basis and calculate gains or losses.
That distinction has become increasingly important as stablecoins gain political support in Washington. Policymakers from both parties have promoted regulated dollar-backed tokens as a way to strengthen the role of the U.S. dollar in global digital finance, according to Reuters.
The broader crypto industry has pushed for a wider exemption covering small transactions. Senator Cynthia Lummis has previously proposed a de minimis exemption that would shield certain low-value crypto purchases from capital gains reporting requirements, CoinDesk reported.
Lawmakers are also reviewing how tax rules apply to staking and mining rewards. Current IRS guidance generally treats rewards as taxable income when received, even if the assets have not been sold. According to CryptoSlate, the PARITY proposal would allow taxpayers to defer recognizing that income for up to five taxable years.
Network fees are also under scrutiny. Blockchain users often pay fees to move assets between wallets or complete transactions, yet those payments can generate additional reporting obligations under existing tax rules.
Industry groups have argued that clearer reporting rules alone will not solve usability concerns if routine transactions continue to trigger tax calculations. The June 9 hearing is expected to give lawmakers a clearer picture of whether support exists for stablecoin-only relief or broader reforms covering everyday crypto activity.
Written comments on the proposal are due by June 23, giving tax writers additional feedback as Congress continues its wider effort to establish rules for digital assets, stablecoins and crypto markets.
