Recently, the U.S. House of Representatives is brewing a tax proposal regarding stablecoins, which sounds very tempting. Let me break down what this proposal is really about.

The core content is actually quite straightforward: regulated stablecoins that maintain a value between $0.99 and $1.01 do not require capital gains tax when traded. Additionally, rewards obtained through staking or mining can defer tax payments. This is indeed good news for the entire crypto industry. Why? Because tax costs have always been a bottleneck for the industry's development. If this proposal is really implemented, it will significantly lower investors' trading costs and could likely trigger a new wave of capital influx.

But—note this "but"—there are three pitfalls hidden that must be seen clearly in advance.

**The First Pitfall: The Threshold of "Regulated".** The prerequisite for tax exemption is that stablecoins must be regulated, and those stablecoins without regulatory qualifications do not enjoy this benefit at all. The problem is that a large number of retail investors cannot distinguish between regulated stablecoins and those that are not. As a result, some people get scammed—blindly buying stablecoins issued by certain small platforms, not only failing to enjoy the tax exemption policy but also potentially facing the risk of the platform collapsing, leading to a complete loss of capital.

**The second pitfall: the real profits of stablecoin arbitrage.** Yes, it's tax-free, but the spreads and fees are still there. Frequent trading of stablecoins for arbitrage can ultimately result in trading costs eating up most of the profits. Moreover, the competition in the stablecoin market is fierce, and many coins have very low interest rates to begin with, making the arbitrage opportunities almost negligible. With significant market fluctuations, losses have instead become the norm.

**The third pitfall: Uncertainty of policies.** The current proposal is still at the draft stage among House representatives, and it must go through a series of processes such as voting, Senate review, and presidential signing. Whether it will pass and when it will pass are all unknowns. At this time, major capital is most likely to play tricks—using this favorable news to pump the price, and if the proposal ultimately fails to pass or does not meet expectations, they will seize the opportunity to dump, leaving retail investors as the ones stuck holding the bag.

From a short-term perspective, this news will indeed boost the related coins of the stablecoin concept, such as the platform coins that issue stablecoins which may rebound. However, the key still lies in when the proposal will actually be implemented. Before the news is confirmed, aggressive operations carry too much risk.