Bitcoin Advocates Lobby US Lawmakers on Tax Rules for Stablecoins

Bitcoin advocacy groups have pressed Congress to extend planned tax breaks on Bitcoin and major network tokens beyond stablecoins, warning that limiting the relief to dollar-pegged tokens alone would not solve the compliance challenges faced by millions of Americans who use cryptocurrencies for everyday payments.

The Bitcoin Policy Institute, along with Bitcoin Voter, Blocks, Crypto Council, Digital Chamber, MoonPay, River and others, sent the letter on Sunday to Senate Finance Committee Chairman Michael Crapo and House Ways and Means Committee Chairman Jason Smith.

The coalition warned that current proposals to limit de minimis tax exemptions only to payment stablecoins compatible with the GENIUS Lawenacted in July, would undermine the very purpose of tax reform.

The letter comes as lawmakers struggle over how to simplify tax reporting for crypto transactions, while the IRS still treats cryptocurrencies as property, which means even buying a coffee with bitcoin triggers a taxable event that requires basis tracking and profit or loss calculations.

The letter also recommended cash-like treatment for GENIUS-compliant payment stablecoins, with no transaction or annual limits, similar to physical cash.

“Payment stablecoins do not operate in a vacuum; they run on open blockchain networks that rely on separate network tokens for consensus, security, and transaction execution,” the coalition wrote, arguing that both types of assets must receive relief for the policy to work in practice.

The coalition proposed a $25 billion market capitalization threshold to determine which network tokens qualify for exemptions, along with a limit of $600 per transaction and an annual limit of $20,000.

Around 45 Million Americans Own Cryptocurrencies, Led by Bitcoin and Federal Reserve Data sample that approximately 7 million Americans used Bitcoin or other network tokens for payments in 2024, the letter notes.

The groups say more than 3,500 merchants in all 50 US states now accept Bitcoin at the point of sale, making the country the largest jurisdiction for Bitcoin payments.

The push revives an effort that stalled in July when Sen. Cynthia Lummis (R-WY) failed to attach crypto tax amendments to President Donald Trump’s reconciliation bill.

The founder of the block, Jack Dorsey. revived the debate Last October, he asked for federal tax breaks on everyday Bitcoin transactions when his payments company introduced integrated crypto wallets for small businesses.

At the time, Lummis promised to reintroduce the proposal in upcoming Senate sessions, calling it a key step toward Bitcoin adoption.

The urgency has increased with new broker reporting rules requiring reporting of digital asset sales on Form 1099-DA for transactions occurring on or after Jan. 1, 2025, the coalition noted.

“Without calibrated de minimis relief, the result will be widespread discrepancies, unnecessary audit risks, and reporting complexity grossly disproportionate to the economic substance of the transactions involved,” the letter says.