US Congress Targets Easier Crypto Use and an Extra $500M in Tax Revenue

The proposed legislation would apply wash sale rules to digital assets while reducing tax burdens on stablecoins and fees from small transactions

A House crypto tax overhaul is expected to generate an estimated $500 million while lowering tax burdens on stablecoin payments and small transaction fees.

The House Ways and Means Committee is set to review H.R. 10357, the Digital Asset Tax Certainty Act, on Sept. 16, bringing a broad overhaul of digital-asset taxation before lawmakers after months of debate over how closely crypto should follow traditional financial asset rules.

The Joint Committee on Taxation estimates that the legislation would boost federal receipts by roughly $500 million on a net basis between fiscal 2027 and 2036, after accounting for measures that both increase and reduce government revenue.

The package contains provisions addressing stablecoins, transaction fees, trading losses, digital-asset lending, staking and previous tax violations.

That fiscal result reflects the bill’s main trade-off. Lawmakers would ease some tax burdens that make routine crypto activity more complicated while applying securities-style rules to traders, potentially generating billions of dollars in additional revenue.

Commenting on the legislation, crypto tax attorney Andrew Gordon said:

“This is a massive step forward for crypto investors who simply want rules on tax. We all pay taxes, the rules need to be clear.”

Stablecoin Relief Comes With New Costs#

Qualifying US dollar stablecoins would receive special tax treatment to prevent small fluctuations around their $1 peg from creating taxable gains or losses that users must calculate whenever they spend the tokens.

Under the proposal, the redemption value would generally set the basis and proceeds for eligible transactions conducted within specified ranges around the peg. Traders, brokers and dealers would be excluded, as would certain users who complete more than 5,000 counted transactions and taxpayers whose functional currency is not the US dollar.

The measure would also exclude gains or losses when digital assets are used to cover network or transaction fees of up to $10, including expenses such as blockchain gas fees and certain trading or liquidity costs.

The provision would apply to dispositions made after Dec. 31, 2027, and represents one of the package’s largest revenue costs. The JCT estimates that the small-fee relief would lower federal receipts by $2.365 billion through 2036.

The legislation does not create a broad $10 exemption for purchases made using Bitcoin or other cryptocurrencies. Instead, the exclusion applies to transaction-related fees, meaning most purchases will remain subject to the existing tax treatment of digital assets as property.

Lawmakers would recoup revenue elsewhere by removing a tax benefit that crypto investors have historically enjoyed compared with stock traders.

The bill extends wash sale restrictions to traded digital assets other than qualifying US dollar stablecoins. Under existing rules, an investor can generally sell Bitcoin at a loss, immediately buy it back and still use the loss for tax purposes because the wash-sale regime principally covers stocks and securities.

H.R. 10357 would limit that strategy while also covering certain economically similar assets, including wrapped and tokenized versions. The JCT estimates that the change would raise federal receipts by $1.707 billion over the budget window.

Another provision would broaden access to mark-to-market accounting for digital-asset dealers and traders whose activities qualify as a trade or business. The JCT estimates these changes would generate $2.332 billion in additional revenue through 2036.

Together, the two trading provisions are projected to bring in more than $4 billion in federal receipts, helping offset tax cuts included elsewhere in the legislation.

Lending and Staking Move Closer to Traditional Finance#

The package goes beyond trading by applying the tax treatment already available for securities lending to qualifying loans involving digital assets.

That could resolve uncertainty over whether temporarily transferring crypto through a lending arrangement counts as a taxable sale. Qualifying arrangements would generally defer immediate recognition of gains or losses when they satisfy requirements covering the return of equivalent assets and the economic terms of the transaction.

Investment trusts would receive another specific adjustment. The bill would stop an otherwise qualifying trust from losing its tax status solely because its trustee stakes digital assets held by the vehicle, potentially removing an obstacle for investment products looking to generate staking rewards.

However, the proposal takes a narrower approach to individual miners and stakers. It treats validation income as ordinary income and sets sourcing rules, while keeping the current timing framework that generally recognizes staking rewards when taxpayers gain control over them.

That means the package does not go as far as an industry proposal that would postpone taxes on newly generated mining or staking rewards until those assets are ultimately sold.

Taxpayers with past reporting issues would have another path toward compliance. Treasury would be instructed to create a Digital Asset Voluntary Disclosure Program, allowing eligible taxpayers to amend previous filings, settle unpaid taxes and interest, and potentially obtain relief from certain penalties.

Wednesday’s markup will be the first test of whether those compromises withstand the legislative process. Committee members can make changes to the measure before voting on its advancement, while approval would still leave H.R. 10357 subject to a House floor vote, Senate review and presidential action.

Changes to the wash-sale, fee or stablecoin provisions during markup could also affect the JCT’s projected $500 million net revenue increase, leaving lawmakers to determine how much tax relief they can offer without making the broader package a net revenue loss.