Congress wants to make crypto easier to use and still collect $500 million more in taxes

A House crypto tax overhaul would raise an estimated $500 million while easing taxes on stablecoin payments and small fees.

The House Ways and Means Committee is scheduled to consider H.R. 10357, the Digital Asset Tax Certainty Act, on Sept. 16, putting a broad rewrite of digital-asset taxation before lawmakers after months of negotiations over how closely crypto should be treated like traditional financial assets.

The Joint Committee on Taxation estimates the legislation would increase federal receipts by about $500 million net from fiscal 2027 through 2036, after accounting for provisions that both raise and reduce government revenue.

The package includes rules covering stablecoins, transaction fees, trading losses, digital-asset lending, staking and past tax violations.

That fiscal outcome reflects the bill's central trade-off. Lawmakers would remove some tax friction that makes routine crypto activity cumbersome while extending securities-style rules to traders that could generate billions of dollars in additional receipts.

Speaking on the legislation, Andrew Gordon, a crypto tax lawyer, 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 a cost

Qualifying US dollar stablecoins would receive special treatment to prevent minor movements around their $1 peg from creating gains or losses that taxpayers must calculate each time they use the tokens.

Under the proposal, redemption value would generally determine the basis and proceeds for qualifying transactions occurring within prescribed bands around the peg. Traders, brokers and dealers would be excluded, along with certain users completing more than 5,000 counted transactions and taxpayers whose functional currency is not the dollar.

The measure would also disregard gains or losses when digital assets are used to pay network or transaction fees of no more than $10, covering costs such as blockchain gas fees and certain trading or liquidity charges.

That provision would take effect for dispositions after Dec. 31, 2027, and carries one of the package's highest costs. JCT estimates the small-fee relief would reduce federal receipts by $2.365 billion through 2036.

The legislation does not establish a general $10 exemption for purchases made with Bitcoin or other cryptocurrencies. The exclusion is tied to transaction-related fees, leaving most purchases subject to the existing treatment of digital assets as property.

Lawmakers would recover revenue elsewhere by ending a tax advantage crypto investors have long held over 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 restrict that strategy and would also reach certain economically equivalent assets, including wrapped and tokenized versions. JCT estimates the change would increase federal receipts by $1.707 billion over the budget window.

Another provision would expand access to mark-to-market accounting for digital-asset dealers and traders whose activities qualify as a trade or business. JCT estimates those changes would raise $2.332 billion through 2036.

Together, the two trading provisions are expected to generate more than $4 billion in receipts, helping absorb tax reductions elsewhere in the legislation.

Lending and staking move closer to traditional finance

The package reaches beyond trading by extending tax treatment already available for securities lending to qualifying digital-asset loans.

That could remove uncertainty over whether temporarily transferring crypto under a lending agreement constitutes a taxable sale. Qualifying arrangements would generally avoid immediate recognition of gains or losses if they meet requirements governing the return of equivalent assets and the transaction's economics.

Investment trusts would receive another targeted change. The bill would prevent an otherwise qualifying trust from losing its tax status solely because its trustee stakes digital assets held by the vehicle, potentially removing a barrier for investment products seeking to earn staking rewards.

However, the proposal is more limited for individual miners and stakers. It classifies validation income as ordinary income and establishes sourcing rules, while leaving intact the existing timing framework that generally recognizes staking rewards when a taxpayer obtains control of them.

That means the package stops short of an industry proposal to defer taxation of newly generated mining or staking rewards until the assets are eventually sold.

Taxpayers with older reporting problems would get another route into compliance. Treasury would be directed to establish a Digital Asset Voluntary Disclosure Program that would allow eligible taxpayers to correct past filings, pay outstanding tax and interest, and potentially receive relief from certain penalties.

Wednesday's markup is the first test of whether those compromises survive the legislative process. Committee members can amend the measure before voting on whether to advance it, and approval would still leave H.R. 10357 facing a House floor vote, Senate consideration and presidential action.

Changes to the wash-sale, fee or stablecoin provisions during markup could also alter JCT's projected $500 million net revenue gain, requiring lawmakers to decide how much tax relief they are willing to provide without turning the broader package into a revenue loser.