Bitcoin Advocates Press US Lawmakers on Stablecoin Tax Rules – Decrypt

Bitcoin advocacy groups have pressed Congress to extend planned tax exemptions to Bitcoin and major network tokens beyond stablecoins, warning that limiting relief to dollar-pegged tokens alone would not resolve the compliance challenges facing millions of Americans who use crypto for everyday payments.

The Bitcoin Policy Institute, joined by Bitcoin Voter, Blocks, Crypto Council, Digital Chamber, MoonPay, River, and others, sent the letter on Sunday to Senate Finance Committee Chairman Michael Crapo and House Ways and Means Committee Chairman Jason Smith. 

The coalition warned that current proposals to limit de minimis tax exemptions solely to payment stablecoins compliant with the GENIUS Act, signed into law in July, would undercut the very purpose of tax reform.

The letter arrives as lawmakers grapple with how to simplify tax reporting for crypto transactions, with the IRS still treating crypto as property, meaning even buying a coffee with Bitcoin triggers a taxable event requiring basis tracking and gain or loss calculations.

The letter also recommended cash-like treatment for GENIUS-compliant payment stablecoins with no transaction or annual limits, similar to physical cash. 

“Payment stablecoins do not operate in a vacuum; they run on open blockchain networks that rely on separate network tokens for consensus, security, and transaction execution,” the coalition wrote, making the case that both asset types must receive relief for the policy to work in practice.

The coalition proposed a $25 billion market capitalization threshold to determine which network tokens qualify for exemptions, along with a $600 per-transaction limit and a $20,000 annual cap.

About 45 million Americans own crypto, led by Bitcoin, and Federal Reserve data shows that roughly 7 million Americans used Bitcoin or other network tokens for payments in 2024, the letter noted.

The groups say over 3,500 merchants across all 50 U.S. states now accept Bitcoin at the point of sale, making the country the largest jurisdiction for Bitcoin payments.

The push revives an effort that stalled in July when Senator Cynthia Lummis (R-WY) failed to attach crypto tax amendments to President Donald Trump’s reconciliation bill. 

Block founder Jack Dorsey rekindled the debate last October, calling for federal tax exemptions on everyday Bitcoin transactions as his payments company debuted crypto-integrated wallets for small businesses.

At the time, Lummis vowed to reintroduce the proposal in upcoming Senate sessions, calling it a key step toward Bitcoin adoption.

The urgency has heightened with new broker reporting rules requiring digital asset sales reporting on Form 1099-DA for transactions occurring on or after January 1, 2025, the coalition noted.

“Without calibrated de minimis relief, the result will be widespread discrepancies, unnecessary audit risk, and reporting complexity vastly disproportionate to the economic substance of the transactions involved,” the letter says.