Crypto’s Everyday Tax Problem Heads to Congress

In Brief

• The Blockchain Association wants small crypto payments exempt from tax reporting.
• The group argues mining and staking rewards should be taxed only when sold.
• Congress now faces pressure to modernize digital asset tax rules.

The Blockchain Association is pushing Congress to rethink how the U.S. taxes everyday crypto activity. In a new policy push, the group urged lawmakers to exempt low-dollar crypto transactions from tax reporting and to tax mining and staking rewards only when users sell them, not when they receive them.

The proposal targets one of the most persistent frictions in U.S. crypto policy. Treating routine blockchain activity as if it were complex securities trading. Right now, even small crypto payments can trigger taxable events, forcing users to track cost basis and report gains or losses for transactions worth only a few dollars. The Blockchain Association argues that this approach discourages real-world usage and creates compliance burdens far out of proportion to the revenue collected.

At the same time, the group wants clarity around mining and staking. Current guidance treats rewards as taxable income at the moment of receipt, even though recipients may not have sold or realized any cash value. That rule, according to the Association, misaligns taxation with economic reality.

Why the Blockchain Association Is Pushing for Change

The Association’s argument centers on practicality. Low-dollar crypto transactions resemble cash payments, not investment trades. Indeed, when someone buys a coffee with crypto, tracking capital gains introduces complexity that most consumers cannot manage. As a result, many avoid using crypto for payments altogether.

Exempting small transactions would mirror existing tax treatment for foreign currency. Importantly, U.S. taxpayers do not report minor gains or losses when exchanging small amounts of euros or yen. The Blockchain Association says crypto should follow a similar framework if policymakers want it to function as a medium of exchange.

On mining and staking, the group emphasizes timing, meaning rewards earned through network participation do not represent realized income until sold. Therefore, taxing them upon receipt can force participants to sell assets just to pay taxes. Which distorts market behavior and penalizes long-term participation in proof-of-stake networks.

Summer Mersinger, CEO of Blockchain Association, stated:

“Our principles offer a pragmatic foundation for achieving clarity while strengthening American competitiveness.”

What This Means for Congress and the Crypto Market

The proposal now sits with United States Congress, where lawmakers continue to debate how to modernize digital asset taxation. Several members have previously signaled support for de minimis exemptions, but no comprehensive fix has passed into law.

If Congress adopts these changes, the impact could be meaningful. Retail users would face fewer reporting hurdles. Developers and network participants would gain predictable tax treatment. Compliance costs would drop, while enforcement could focus on higher-value activity where revenue impact actually matters.

Critics may argue that exemptions reduce oversight. However, the Blockchain Association counters that clarity improves compliance. When rules align with how people actually use technology, adherence rises.

Ultimately, this push reflects a broader shift in crypto policy discussions. Instead of debating whether crypto should exist, lawmakers now debate how it should function inside existing systems. Tax treatment plays a central role in that transition.

If Congress acts, crypto could move closer to everyday utility rather than remaining locked in investment-only status. If it does not, the U.S. risks maintaining a framework that treats small blockchain transactions like complex financial instruments, an approach increasingly out of step with how the technology operates.