US Lawmakers Propose Tax Relief for Small Stablecoin Transactions

According to Cointelegraph, U.S. lawmakers have introduced a draft proposal aimed at reducing the tax burden on everyday cryptocurrency users. The proposal, presented by Representatives Max Miller of Ohio and Steven Horsford of Nevada, seeks to amend the Internal Revenue Code to accommodate the increasing use of digital assets in payments. The draft aims to exempt small stablecoin transactions from capital gains taxes and offers a new deferral option for staking and mining rewards. The draft specifies that users would not need to recognize gains or losses on stablecoin transactions up to $200, provided the asset is issued by a permitted issuer under the GENIUS Act, pegged to the US dollar, and maintains a stable trading range around $1. The bill includes safeguards to prevent misuse, such as excluding brokers or dealers from the benefit and retaining Treasury's authority to issue anti-abuse rules and reporting requirements. Beyond payment transactions, the proposal addresses concerns about "phantom income" from staking and mining. It allows taxpayers to defer income recognition on staking or mining rewards for up to five years, rather than being taxed immediately upon receipt. This provision is described as a compromise between immediate taxation upon dominion and control and full deferral until disposition. Additionally, the draft extends existing securities lending tax treatment to certain digital asset lending arrangements, applies wash sale rules to actively traded crypto assets, and permits traders and dealers to elect mark-to-market accounting for digital assets. In related developments, the Blockchain Association recently sent a letter to the US Senate Banking Committee, signed by over 125 crypto companies and industry groups. The letter opposes efforts to extend restrictions on stablecoin rewards to third-party platforms, arguing that such measures would stifle innovation and increase market concentration in favor of large incumbents. The group compared crypto rewards to incentives commonly offered by banks and credit card companies, warning that banning similar features for stablecoins would undermine fair competition.