BREAKING: Bipartisan Crypto Tax Bill Targets Stablecoins & Staking Income

Washington just fired a shot across the crypto industry's bow. A new bipartisan bill—spearheaded by Representatives Max Miller and Steven Horsford—aims to drag digital asset taxation into the 21st century, with stablecoins and staking rewards squarely in the crosshairs.

The Regulatory Hammer Drops

Forget the wild west. This legislation proposes clear, formal tax rules for two of crypto's most ubiquitous—and currently murky—areas. The goal? To eliminate guesswork for investors and create a compliant framework that could finally lure institutional capital off the sidelines.

Stablecoins: No More Free Pass?

The bill tackles the multi-trillion-dollar stablecoin market head-on. It seeks to define exactly how transactions and yields from these dollar-pegged tokens should be taxed, potentially closing loopholes that have let some activity slip through the cracks. A move that screams 'maturity' for an asset class often criticized as a tax haven for the digitally savvy.

Staking's Tax Day of Reckoning

Proof-of-Stake networks, brace for impact. The draft legislation takes aim at the income generated from staking crypto assets. The current ambiguity—is it income at receipt, or only upon sale?—has created a compliance nightmare. This bill could force a definitive answer, bringing staking rewards in line with traditional investment income. Because nothing says 'mainstream adoption' like a clear 1099 form.

The Fine Print & The Fallout

While details are still emerging, the market's initial reaction will be a key bellwether. Clarity often breeds confidence, but overreach could stifle innovation. The industry now faces a classic Washington bargain: accept heavier oversight in exchange for legitimacy and a potential path for broader ETF and retirement account inclusion. Wall Street bankers, meanwhile, are probably just annoyed they didn't think of tokenizing the tax code first.

This isn't just another draft floating around the Hill. It's a direct signal that lawmakers are done waiting for the industry to self-police. The era of 'move fast and break things' is colliding with the immutable reality of the IRS. The final text could either lay the groundwork for a regulated boom—or trigger a defensive scramble. One thing's for sure: the free ride is over.

Stablecoin payments under $200 will get capital gains relief under bipartisan tax bill

The lawmakers said they chose to start with stablecoins because Congress has already passed laws governing how those tokens operate.

The draft proposal will also exempt transactions under $200 made with “regulated, dollar‑pegged” stablecoins from capital gains taxes, but the Representatives made it clear that this does not apply to other forms of crypto, and it does not cover trading activity beyond those limited payments.

Max said the current tax system does not match how people actually use crypto today. “America’s tax code has failed to keep pace with modern financial technology. This bipartisan legislation brings clarity, parity, fairness, and common sense to the taxation of digital assets,” he said.

The draft mixes early legislative language with policy goals and has not yet been turned into a formal bill. Steven’s office said the goal is cooperation inside the committee. “The hope is that the committee will work together in good faith to set these critical rules of the road,” a spokesperson said.

The draft also addresses how staking and mining rewards are taxed. Under IRS guidance issued during the Biden administration, those rewards are taxed as income at the moment they are received.

House Republicans argue that approach taxes value before a gain exists. Progressive Democrats argue the rewards function like pay and should be taxed immediately.

Max and Steven propose a middle option. Taxpayers could choose to delay taxes on staking rewards for up to five years. At the end of that period, the rewards WOULD be taxed as income based on their fair market value. The approach differs from a proposal introduced earlier this year by Senator Cynthia Lummis, which would delay taxes until the rewards are sold.

Meanwhile, Max and Steven’s proposal also allows mark‑to‑market accounting, letting traders report unrealized gains and losses each year, which can offset income like wages.

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