Blockchain Association Proposes Crypto Tax Reforms

The Blockchain Association, a leading trade group for the digital asset industry, released a comprehensive set of tax principles for cryptocurrencies on Tuesday and met with U.S. House lawmakers to push for reforms in how these assets are taxed. The proposals aim to modernize the Internal Revenue Service's approach, which currently classifies digital assets as property, triggering taxes on most transactions as capital gains or ordinary income.

In meetings on Capitol Hill and with White House officials, the association advocated for treating stablecoins as cash equivalents for everyday purchases. This change would exempt routine uses, such as buying goods, from immediate tax reporting on small gains or losses. The group argued that current rules impose excessive compliance costs on individuals for negligible amounts, overwhelming taxpayers and tax administrators without significant revenue gains for the government.

A key element of the framework is a de minimis exemption for low-value transactions, potentially setting a threshold like $300 to avoid reporting requirements. The association also proposed applying wash-sale rules to digital assets, similar to traditional securities....