Coinbase Demands US Lawmakers Overhaul Outdated Crypto Tax Rules Stifling Adoption
Coinbase is escalating pressure on U.S. lawmakers to urgently reform digital asset taxation, warning that current "pre-crypto era" rules treat every minor transaction as taxable property events—creating a compliance nightmare that actively hinders mainstream adoption. Chief Policy Officer Faryar Shirzad argues the fundamental mismatch between 20th-century tax codes and blockchain technology's operational reality is blocking crypto's everyday utility, forcing the exchange to intensify its lobbying for regulatory clarity.
Coinbase sees 34% jump in tax queries
Shirzad mentioned that under the current rules, something as simple as paying a gas fee or using a stablecoin for a routine transaction is technically a taxable event. He added that the users are expected to calculate cost basis, track gains or losses, and report them. This happens even when the amounts involved are negligible.
He noted that crypto’s ability to move seamlessly across wallets and platforms makes this even harder. It often leaves gaps in reporting that brokers themselves cannot fully resolve.
According to a report, Coinbase has seen a 34% jump in customer service inquiries. All of them were linked to tax reporting compared with the same period last year. Meanwhile, the introduction of new reporting needs is generating what the company describes as a paperwork overload.
It added that millions of Form 1099-DAs will be issued for the 2025 tax year. However, many of them are tied to extremely small transactions. A big portion of these forms relates to proceeds under $600, and hundreds of thousands even track activity below $1.
The volume of reporting risks is doing the opposite. It is not improving the clarity among users and is burying meaningful info under huge amounts of data. Cost basis tracking is another structural issue among users. The exchange estimates that more than 63% of users have gaps in their records. This is purely due to crypto’s move between wallets and exchanges. Because of this, taxpayers either overpay or are forced to manually reconcile transactions, and that too with limited support.
De minimis exemption for small transactions might work here. Similar limits already exist in other parts of the tax code. It can be applied to crypto to eliminate the need to report minor payments.
Euro stablecoin holders jump to 1M
The report highlighted that the GENIUS Act has already established a clearer framework for stablecoins and the market. Meanwhile, the Internal Revenue Code remains largely unchanged for cryptos. The cumulative digital assets market is hovering around the $2.4 trillion mark. A recent sell-off has dragged Bitcoin to trade below the $70k level.
It is expected that the tax rules could push users and innovation offshore. The company framed the issue not just as a compliance challenge, but as a competitiveness one. It warns the US of losing ground in a sector that it is trying to lead.
Data shared by Dune shows that Euro-pegged stablecoin supply has surged from $203 million in January 2023 to $912 million by February 2026. Holders grew from 13,000 to over 1 million during this period. Circle’s EURC leads this tally with $500 million. However, there are 13 euro-pegged stablecoins in the market. This includes EURS, EURe, EURI, EURCV, and more.
Euro stablecoins: $203M → $912M supply. 13K → 1M+ holders.@circle EURC leads at $500M, but there are 13 euro-pegged stablecoins across the ecosystem — EURS, EURe, EURI, EURCV, and more.
Post-MiCA, the euro stablecoin market is growing and fragmenting into specialized… pic.twitter.com/IBzxDSkyzI
— Dune | We Are Hiring! (@Dune) March 26, 2026
Post-MiCA regulatory clarity has pushed this 4.5x supply and 80x holder growth. Euro stablecoins now represent over 80% of the non-USD stablecoin supply in the region. The cumulative stablecoin market holds a cap of more than $319 billion. Tether’s USDT leads the sector with an over $184 billion market cap.
Beyond policy, Coinbase entered traditional finance with crypto. The company recently partnered with Better Home & Finance to allow homebuyers to use digital assets like Bitcoin and USDC as collateral for down payments.
Despite the major announcement, the COIN price dropped by more than 4% in the last session. It has seen a decline of almost 45% over the last 6 months. COIN traded at $173.38 in the last session.
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