- Cryptocurrency/Web3 | Central Bank Policy
- Three major cryptocurrency lobbying groups, the Blockchain Association, the Crypto Council for Innovation, and the Chamber of Digital Commerce, have jointly written to the U.S. Congress, urging lawmakers to pass the "Mining and Staking Tax Clarity Act" without any amendments and to reject any further modification requests.
- The core provision of the bill allows cryptocurrency miners and network stakers to have the autonomy to choose when to report taxes, either at the time of receiving crypto rewards or when the related assets are actually sold. This aims to directly address the long-standing issue of liquidity depletion in the industry caused by "taxation on unrealized income."
Democratic Representative Steven Horsford previously proposed an amendment to the bill, intending to strictly limit the tax deferral period for crypto rewards to five years. However, this proposal faced strong opposition from the CEO of the Crypto Council for Innovation, who argued that it would undermine the core value of the bill and only bring negligible revenue to the treasury.
Deferred Tax System Focuses on Liquidity Relief
The core of this legislative battle is to redefine the taxation point of wealth creation from crypto assets. Under the current tax framework, miners and stakers are considered to have realized income the moment a block is generated and rewards are received, regardless of the market liquidity and asset realization channels at that time. This mechanism often forces network participants to sell assets during market downturns to raise fiat currency for tax payments, exacerbating the cyclical downturn pressure on the crypto market. The bill's proposed optional deferred tax mechanism is seen by the industry as a key institutional innovation to ensure stable cash flow for network node operations.
Amendment Battle Triggers Industry Backlash
Representative Horsford's proposed five-year deferral cap amendment reflects fiscal regulators' concerns about long-term capital gains tax loss and tax base erosion. However, the three lobbying groups pointed out in their joint letter that adding a five-year limit would complicate the originally clear tax path and increase the operational audit costs for compliant partnerships. The crypto lobbying groups emphasized that the current version of the bill is a fragile consensus reached after multiple rounds of bipartisan hearings and interest balancing, and any tweaks could jeopardize the bipartisan cooperation achieved on this issue.
Traditional Finance vs. New Economy Interests
Meanwhile, the bill is facing strong resistance from traditional financial forces within Congress. The American Bankers Association (ABA) has explicitly opposed the bill, arguing that the legislation grants more significant tax privileges to crypto assets compared to traditional financial instruments. The traditional banking sector believes that allowing specific digital assets to defer income recognition will distort capital allocation efficiency. Lobbying groups countered that traditional financial institutions fail to understand the unique nature of blockchain's underlying clearing and settlement, and renegotiating the already compromised terms will only revive previously resolved compliance issues in the industry.
