US Lawmakers Introduce Cryptocurrency Taxation Proposal

US lawmakers propose digital asset tax plan, considering stablecoin transactions and staking deferral.

American lawmakers have introduced a proposal for taxing digital assets, which considers small transactions with stablecoins and provides a deferral for staking. 

The bipartisan proposal, put forward by Representatives Max Miller of Ohio and Steven Horsford of Nevada, aims to amend the Tax Code to reflect the growing use of cryptocurrencies in payments.

The primary objective of the document is to “exclude from income recognition low-profit transactions arising from the ordinary use of regulated payment assets by consumers.”

According to the bill, investors will not need to recognize gains or losses on stablecoin transactions up to $200, provided the coin is issued by a licensed issuer in accordance with the GENIUS Act. 

Beyond payment transactions, the proposal addresses concerns about “phantom income” from staking and mining. If enacted, taxpayers will be allowed a deferral of up to five years on recognizing as income the rewards received from locking or mining assets.

Previously, coins obtained in this manner were taxed immediately upon receipt. 

“This provision is intended to reflect the necessary compromise between immediate taxation of ownership and control and full deferral until the disposition of the position,” the document states.

The project also extends the existing tax regime for securities lending operations to certain digital asset lending schemes, applies “wash sale” rules to actively traded cryptocurrencies, and allows traders and dealers to choose their coin accounting method.

In December, under the GENIUS Act, the Federal Deposit Insurance Corporation published a proposal for rules governing the application process for issuing “stablecoins.”

In the same month, the Commodity Futures Trading Commission launched a pilot program to use digital assets as collateral in derivatives markets.