US Lawmakers Introduce Stablecoin Tax Break, Staking Rewards Proposal
US lawmakers have introduced a discussion draft that aims to reduce the tax burden on everyday crypto users by exempting small stablecoin transactions from capital gains taxes and offering a new deferral option for staking and mining rewards. The proposal, introduced by Representatives Max Miller of Ohio and Steven Horsford of Nevada, seeks to amend the Internal Revenue Code to reflect the increasing use of digital assets in payments.
The draft aims to “eliminate the recognition of low-value profits arising from the routine use of stablecoins for regulated payments by consumers.” Under the bill, users would not be required to recognize gains or losses on stablecoin transactions of up to $200, provided the asset is issued by a GENIUS Act-approved issuer, is pegged to the U.S. dollar, and maintains a narrow trading band around $1.
The bill contains safeguards to prevent misuse, including excluding brokers or dealers from the benefit and giving the Treasury Department the authority to issue anti-abuse regulations and reporting requirements. The exemption would not apply if a stablecoin trades outside a narrow price range.
The bill explains the reasons for tax relief. According to the draft, this provision is intended to reflect a necessary compromise between the immediate taxation of dominion and control and a complete deferral pending disposition.
Deferring Taxes on Crypto Staking Rewards
Beyond payments, the proposal addresses long-standing concerns about “phantom income” from staking and mining. Taxpayers could elect to defer income recognition from staking or mining awards for up to five years, rather than being taxed immediately upon receipt.
The draft also extends the existing tax treatment of securities lending to certain digital asset lending arrangements, applies wash-sale rules to actively traded crypto assets, and allows traders and dealers to elect to mark-to-market accounting for digital assets.
Crypto Industry Reaction
Last week, the Blockchain Association sent a letter to the U.S. Senate Banking Committee signed by more than 125 crypto companies and industry groups opposing efforts to expand restrictions on stablecoin rewards on third-party platforms. The group argued that expanding the boundaries of the GENIUS Act beyond stablecoin issuers would stifle innovation and increase market concentration in favor of large incumbents.
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