US lawmakers are weighing a new tax proposal that could significantly reduce the burden on everyday crypto users, particularly those using stablecoins for payments or earning rewards through staking and mining.
The discussion draft, introduced by Representatives Max Miller and Steven Horsford, aims to modernize the tax code to better reflect how digital assets are used in practice. At its core, the proposal seeks to remove friction from routine crypto activity that currently triggers complex tax reporting despite minimal economic impact.
Key takeaways:
Lawmakers propose a $200 tax exemption for small stablecoin payments.
Staking and mining rewards could qualify for multi-year tax deferral.
The draft focuses on everyday crypto use rather than speculative trading.
Anti-abuse safeguards and Treasury oversight remain in place.
One of the most notable elements is a de minimis exemption for small stablecoin payments. Under the draft, consumers would no longer need to calculate capital gains or losses on stablecoin transactions of up to $200, as long as the asset is a regulated, dollar-pegged stablecoin that trades within a tight range around $1. Lawmakers argue this change would make stablecoins more practical for everyday spending, such as retail purchases or peer-to-peer payments.
The proposal includes guardrails designed to prevent misuse. The exemption would not apply to professional traders or brokers, and it would be suspended if a stablecoin deviates meaningfully from its peg. The Treasury Department would also retain broad authority to introduce additional anti-abuse measures and reporting rules.
Staking Rewards and “Phantom Income” Reform
Beyond payments, the draft tackles one of the crypto industry’s most persistent tax complaints: being taxed on staking or mining rewards before those assets are sold. The bill would allow taxpayers to defer recognizing income from such rewards for up to five years, addressing what critics often call “phantom income.” Lawmakers describe the provision as a compromise between immediate taxation and full deferral until disposal.
Additional changes in the draft extend familiar tax concepts into the crypto realm. These include applying securities-style lending rules to certain digital asset lending arrangements, enforcing wash sale restrictions on actively traded crypto assets, and giving professional traders the option to use mark-to-market accounting.
The proposal arrives amid broader debate over stablecoin regulation. Industry groups have recently pushed back against efforts in the Senate to restrict stablecoin reward programs, warning that such limits could stifle innovation and entrench dominant players. Advocates argue that crypto rewards function much like bank or credit card incentives and should be treated similarly under the law.
While the draft remains at an early discussion stage, it signals growing momentum in Washington to move beyond treating all crypto activity as speculative trading — and toward a framework that distinguishes everyday use from investment behavior.
