TLDR
A coalition of cryptocurrency businesses is urging Congress to extend tax relief beyond stablecoins to include Bitcoin and other digital currencies.
The groups argue that limiting tax exemptions to stablecoins will complicate tax reporting for millions of Americans using cryptocurrency.
The proposal calls for network tokens like Bitcoin to qualify for tax relief if their market value exceeds $25 billion.
The coalition suggests capping individual transactions at $600 with an annual spending limit of $20,000 to qualify for tax exemptions.
The groups warn that without broader tax relief, new reporting rules set for 2025 could lead to increased audit risks and reporting complexity.
A group of cryptocurrency businesses is calling on Congress to extend tax benefits beyond stablecoins to include Bitcoin and other digital currencies. These businesses argue that limiting the proposed tax relief to stablecoins will create unnecessary complexity for millions of Americans who use cryptocurrency in everyday transactions. In a letter sent to key members of Congress, they emphasized the need for broader tax exemptions for digital assets to simplify compliance.
Groups Advocate for Wider Crypto Tax Benefits
The coalition, led by the Bitcoin Policy Institute, includes Bitcoin Voter, Crypto Council, MoonPay, and several other prominent cryptocurrency companies. They urge House Ways and Means Committee Chairman Jason Smith and Senate Finance Committee Chairman Michael Crapo to broaden the scope of the GENIUS Act tax provisions.
The proposed tax relief currently only applies to payment stablecoins, which meet specific regulatory standards outlined in the GENIUS Act passed in July. The group argues that excluding Bitcoin and other major cryptocurrencies from these tax exemptions would undermine efforts to simplify crypto tax rules.
The groups suggest that the narrow focus on stablecoins disregards the broader crypto market, where Bitcoin remains a popular payment method. Under current IRS rules, using Bitcoin to purchase even small items like a cup of coffee is considered a taxable event. Users must track their original purchase price and calculate capital gains for each transaction, which can create a compliance burden.
Zakhil Suresh, founder of BitSave, pointed out, “Imagine having to pay capital gains every time you swipe a card? It’s definitely discouraging crypto payments.”
Proposal Seeks Fair Tax Rules for Bitcoin
The coalition’s proposal outlines specific requirements for expanding the tax relief to include other digital currencies like Bitcoin. They suggest that network tokens, such as Bitcoin, must have a market value of at least $25 billion to qualify for tax relief. Furthermore, individual transactions should be capped at $600, with an annual spending limit of $20,000. These guidelines are designed to address the concerns of both users and tax authorities, offering a balanced approach to crypto taxation.
Under the proposal, payment stablecoins, like the ones used for blockchain-based payments, would receive the same treatment as physical cash. By broadening the tax relief, the coalition believes it would encourage the use of cryptocurrencies for everyday purchases, benefiting both consumers and businesses. With over 45 million Americans holding cryptocurrency, the coalition’s proposal has significant implications for the future of crypto transactions in the United States.
The groups stress that without tax relief, the complexity of reporting crypto transactions could discourage adoption. With new broker reporting rules set to take effect in 2025, they warn of widespread discrepancies and increased audit risks. The coalition urges Congress to act swiftly to ensure the future of cryptocurrency remains viable for millions of Americans.
