The House Ways & Means Committee held a June 9 hearing on 7 crypto tax draft bills targeting staking rewards, stablecoins, DeFi wash sales, and more — the most comprehensive U.S. crypto tax overhaul proposed to date.
For the first time in a decade, the most powerful tax-writing body in Congress is actively rewriting how the IRS treats digital assets — and the implications touch everyone from a Bitcoin holder paying for groceries to a DeFi protocol running automated liquidity pools.
On June 9, 2026, the House Ways and Means Committee convened a dedicated hearing on seven draft bills that would collectively overhaul U.S. crypto tax law. The proposals cover stablecoin payments, staking and mining income, wash-sale rules, small-transaction relief, and more — addressing the patchwork of IRS guidance that has made crypto one of the most compliance-intensive asset classes in the country.
Chairman Jason Smith (R-MO) called the bills essential for U.S. competitiveness. Ranking Democrat Richard Neal offered cautious support. And a legal expert warned that one provision could become a vehicle for unlimited tax deferral. Here is what each bill does, what the hearing revealed, and what it means for your portfolio.
Why Crypto Taxes Are Broken
To understand the stakes, start with the current baseline. The IRS has treated cryptocurrency as property since a 2014 Revenue Notice, which means every transaction — a swap on Uniswap, a stablecoin payment at checkout, a DeFi yield claim — is technically a taxable event requiring cost-basis tracking.
- Billions in unreported gains. IRS enforcement notices have gone out to hundreds of thousands of crypto holders, many of whom did not realize routine DeFi activity triggered taxable events.
- Chilling effect on stablecoin payments. A $12 coffee purchased with USDC can theoretically generate a taxable gain or loss if the stablecoin deviated from $1.00 — absurd in practice but legally accurate under current rules.
- Double taxation on staking rewards. Validators earning ETH or SOL staking rewards must report them as ordinary income at the time of receipt, then pay capital gains tax again when those same tokens are eventually sold.
- The wash-sale loophole. Unlike stocks, crypto investors can sell holdings at a loss to harvest a tax deduction and immediately rebuy — a strategy explicitly prohibited for traditional securities.
The seven bills address every one of these issues, though none has been voted on yet.
The Seven Bills: What Each One Does
1. De Minimis Relief for Small Transactions. Excludes gains or losses below a set threshold — the debate centers on whether that threshold should be $200 or $600 — from tax reporting requirements. The goal: eliminate the accounting burden on everyday crypto purchases and small DeFi interactions.
2. Stablecoin Payment Exemptions. Exempts GENIUS Act-compliant stablecoins from gain or loss calculations when used for payment transactions. The practical effect: USDC, PYUSD, and similar regulated stablecoins would function more like digital dollars for tax purposes, with no taxable event triggered on routine purchases.
3. Staking and Mining Income Deferral. Validators and miners could elect to defer recognizing income from newly minted coins until they are sold, rather than paying ordinary income tax at the time of receipt. Currently, a Solana validator earning 100 SOL must report its dollar value at receipt as income — then pay capital gains when they eventually sell.
4. Wash-Sale Rules Applied to Crypto. The bill would extend the standard 30-day wash-sale prohibition to digital assets for the first time. Crypto investors would no longer be able to sell a position at a loss and immediately repurchase the same asset — the same rule that applies to stocks and mutual funds.
5. Network Fee Relief. Excludes minor gains or losses from paying blockchain network fees — gas fees, transaction fees — from tax reporting. A meaningful change for active DeFi users who interact with smart contracts dozens of times a week.
6. Charitable Donation Appraisal Waiver. Currently, donating appreciated crypto to a charity requires a formal third-party appraisal — a requirement that does not apply to donating stocks. The bill would align crypto charitable donations with traditional securities treatment.
7. Securities Treatment for Widely-Traded Digital Assets. Applies mark-to-market accounting and securities-lending rules to digital assets that trade like securities, bringing them closer to the regulatory framework already governing stocks and bonds.
Stablecoins: The Credit Card Problem
The stablecoin tax exemption drew the most attention from Chairman Smith, who framed it in unusually direct terms.
"If Americans want to pay with a stablecoin instead of a credit card, they should proceed without excessive tax paperwork," Smith told the committee.
The proposal specifically targets GENIUS Act-compliant stablecoins — those meeting the reserve and disclosure requirements under the stablecoin banking bill the Senate is racing to finalize before a July 18 implementation deadline. That linkage is deliberate: it creates a tax incentive for using regulated stablecoins over non-compliant alternatives.
For Tether (USDT), which remains outside GENIUS Act compliance standards, the implications are significant. Transactions in non-compliant stablecoins would remain subject to current property rules — creating a regulatory moat around dollar-pegged assets that register with U.S. banking regulators.
The proposal would benefit PayPal's PYUSD, Circle's USDC, and any bank-issued stablecoin that clears GENIUS Act standards. Combined, these tokens processed roughly $2.8 trillion in on-chain transaction volume in Q1 2026, according to The Block's research.
Staking Deferral: Tax Fix or Loophole?
The most technically contentious bill is the staking and mining income deferral, and the June 9 hearing surfaced sharp disagreement.
Mike Kaercher, a tax law expert from NYU School of Law, told the committee the proposal "violates parity with traditional finance and the principle that income is taxed on receipt." More bluntly, he warned the bill "could enable permanent tax avoidance through certain business structures" — specifically citing cases where pass-through entities could theoretically defer staking income indefinitely by never triggering a qualifying sale event.
Proponents argue the current setup is genuinely unfair. If you stake 100 ETH and receive 3 ETH in rewards over a year, you pay ordinary income tax on the fair-market value at receipt. If ETH then drops 40% and you eventually sell at a loss, you have paid tax on income that effectively evaporated. The deferral option would let stakers match their tax recognition to their actual economic outcome.
Industry groups including the Digital Chamber of Commerce and Coin Center have pushed for this reform for years, arguing it aligns crypto staking more closely with stock options, where income is not recognized until exercise.
The Democratic concern: without guardrails, the deferral election becomes a wealth-management tool for high-net-worth individuals who can hold staking rewards indefinitely — effectively creating a new form of stepped-up basis avoidance unavailable to ordinary investors.
Closing the Wash-Sale Loophole
One of the more surprising proposals is the wash-sale extension — a provision that actually increases the tax burden on active crypto traders while bringing the asset class into parity with traditional finance.
Currently, a Bitcoin holder can sell $100,000 of BTC at a $20,000 loss on December 28, claim the deduction on their 2026 return, and repurchase the same BTC on December 30 without penalty. Stock traders are explicitly prohibited from this strategy under the 30-day wash-sale rule.
Applying wash-sale rules to crypto is opposed by active traders but welcomed by institutional compliance teams that want a consistent rulebook across asset classes. Estimates have put the 10-year revenue impact of closing this loophole in the $10 billion range.
Wash-sale reform also has direct DeFi consequences. Automated yield strategies and portfolio rebalancing protocols frequently generate losses that users harvest at year-end. A 30-day prohibition would force DeFi protocols to redesign how loss-harvesting vaults and tax-optimization features operate.
The Bipartisan Problem — And What Happens Next
Despite broad acknowledgment that current crypto tax rules are unworkable, the June 9 hearing made clear that lawmakers remain far apart on the details. "I'm aligned with that goal — eventually. There's healthy skepticism on both sides," said Ranking Democrat Richard Neal, capturing the room's mood.
- The staking and mining deferral benefiting high-income investors disproportionately
- Missing revenue estimates for several provisions
- Potential for the stablecoin exemption to favor specific corporate structures
- The Senate having made minimal progress on companion legislation
Republicans centered their arguments on U.S. global competitiveness, particularly as jurisdictions like the UAE, Singapore, and Europe's MiCA framework have already built stable regulatory environments that crypto firms are using to plan long-term capital allocation.
The bills remain at the preliminary hearing stage — well before markup, let alone a floor vote. With Congress also managing the GENIUS Act stablecoin timeline, the CLARITY Act market structure bill, and the budget reconciliation package, the realistic window for crypto tax reform in the current session is narrow. Both chambers must pass identical legislation before anything becomes law.
What This Means for Investors
Even in draft form, these seven bills send a clear signal: the current crypto tax framework is untenable, and Washington is beginning to act. Three practical takeaways apply regardless of whether any bill passes in 2026.
Track your cost basis meticulously now. If any of these bills pass with retroactive provisions or mid-year effective dates, you will need clean records to elect favorable treatment for staking rewards or to demonstrate compliance with de minimis thresholds. Every exchange transaction, DeFi swap, and staking reward matters.
Reassess your stablecoin exposure. If you run a business treasury in USDC or make payments in stablecoins, the proposed exemption would dramatically simplify your accounting. Structuring payments with GENIUS Act-compliant stablecoins positions you to capture the tax benefit if the bill advances in 2026 or early 2027.
Get ahead of the wash-sale change. Tax-loss harvesting in crypto works precisely because wash-sale rules do not apply today. That window may close. If you have a year-end loss-harvesting strategy or participate in DeFi vaults that automate tax-loss realization, the timeline for executing it may compress significantly if markup accelerates in Q3 2026.
At the macro level, every congressional session that seriously debates crypto taxation moves the asset class closer to full institutional legitimacy. The seven bills are imperfect drafts with real partisan obstacles — but they represent the most substantive congressional engagement with crypto taxation in the asset class's history. Whether the GENIUS Act's stablecoin momentum, the CLARITY Act's market structure framework, and this new tax package can converge into a coherent U.S. crypto legal stack before the end of the 119th Congress is the central regulatory question of the year.
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