U.S. Lawmakers Draft Crypto Tax Rules for Payments

• Draft bill offers a $200 capital gains exemption for regulated dollar-backed stablecoin payments used in everyday purchases.
• Staking and mining rewards get a five-year tax deferral election, a compromise between immediate taxation and full deferral.
• Proposal applies securities-style tax rules to crypto, including wash sales, constructive sales, and mark-to-market options.

U.S. House lawmakers released a draft crypto tax framework in Washington, according to Bloomberg. The proposal came from Representatives Max Miller and Steven Horsford on the Ways and Means Committee. The draft aims to modernize digital asset taxes, reduce small-payment compliance, and clarify reward taxation through defined elections.

Stablecoin Payments Get a Narrow Tax Safe Harbor

Notably, the draft creates a capital gains exemption for small stablecoin payments under $200. The safe harbor applies only to regulated, dollar-pegged stablecoins, not other cryptocurrencies. The rule targets everyday purchases, not trading activity or investment gains.

However, eligibility remains strict to limit abuse. Stablecoins must come from permitted issuers under the GENIUS Act. They must track the U.S. dollar and stay within 1% of $1.00 for most days. Brokers and dealers remain excluded, while lawmakers consider an annual cap.

A Compromise on Staking and Mining Taxes

Next, the framework addresses when staking and mining rewards face taxation. Under IRS guidance reaffirmed in October 2024, rewards face tax when received. Senator Cynthia Lummis proposed full deferral until sale earlier this year, which stalled.

Instead, the Miller-Horsford draft offers an election to defer taxes for up to five years. After that period, rewards face ordinary income tax at fair market value. The draft calls this a compromise between immediate taxation and full deferral.

Extending Securities-Style Tax Rules to Crypto

Finally, the proposal applies several securities tax rules to digital assets. Notably, it extends wash-sale rules to crypto, limiting loss harvesting through quick repurchases. It also adds constructive sale rules to prevent locking gains while delaying taxes.

Moreover, the draft allows non-taxable treatment for qualifying crypto lending of liquid, fungible assets. NFTs and illiquid tokens remain excluded. Eligible traders may elect mark-to-market accounting, while large-cap digital asset donations avoid appraisal requirements.

According to Horsford’s office, committee members aim to set clear tax rules. The stablecoin provision would apply after December 31, 2025. Miller said last week the broader bill could advance before August 2026.