Crypto exchange Coinbase used a congressional hearing on digital asset taxation to push for clearer and less burdensome crypto tax rules, arguing that current requirements create unnecessary complexity for taxpayers, businesses, and regulators.
Speaking before the House Ways and Means Committee on Tuesday, Coinbase Vice President of Tax Lawrence Zlatkin endorsed a series of proposed legislative reforms aimed at modernizing how digital assets are treated under the U.S. tax code.
His testimony came as lawmakers unveiled six standalone digital asset tax bills and a broader discussion draft addressing cryptocurrency taxation.
Coinbase backs tax overhaul for digital assets
Zlatkin told lawmakers that tax policy has not kept pace with the growing adoption of digital assets, despite millions of Americans now owning or using cryptocurrencies. Drawing on his previous experience as a tax executive at General Electric, he argued that clear tax rules generally improve compliance, while uncertainty increases costs and pushes economic activity elsewhere.
According to Zlatkin, Congress has an opportunity to align tax policy with ongoing efforts to establish a broader regulatory framework for digital assets. “Market structure and tax policy go hand in hand,” he said, noting that while separate legislation addressing crypto market regulation is advancing in Congress, tax reforms should move forward independently.
Stablecoin tax rules take center stage
One of Coinbase’s primary recommendations focused on payment stablecoins. Zlatkin argued that requiring users to track gains and losses on transactions involving dollar-pegged stablecoins creates administrative burdens despite generating little taxable income in most cases.
He praised provisions included in legislation introduced by Rep. Rudy Yakym, which would simplify tax treatment for compliant payment stablecoins and reduce reporting requirements for transactions that typically have minimal economic gains. The proposal is designed to make stablecoin payments more practical while reducing reporting obligations for taxpayers and the Internal Revenue Service.
Relief proposed for blockchain network fees
Coinbase also supported provisions aimed at simplifying the tax treatment of blockchain transaction fees. Every transaction on a blockchain requires network fees paid to validators or miners. Under existing interpretations, those small payments can potentially create separate taxable events.
Zlatkin said treating every fee as a reportable transaction adds significant complexity while generating limited tax revenue. He described the committee’s approach as a step toward aligning tax rules with the technical realities of blockchain networks.
Mining and staking rules remain a priority
The exchange also backed legislation introduced by Rep. Mike Carey that seeks to clarify the taxation of mining and staking rewards.
According to Coinbase, current uncertainty can create situations where taxpayers face potential tax obligations before they have converted rewards into cash or otherwise realized economic gains. Zlatkin argued that clearer rules could provide greater certainty for individuals and businesses participating in blockchain infrastructure.
Coinbase seeks broader exemption for everyday transactions
While supporting the committee’s proposals, Coinbase urged lawmakers to go further by creating a de minimis exemption for small digital asset transactions. Under current rules, consumers may need to calculate and report capital gains or losses whenever cryptocurrency is used for purchases, even for low-value transactions.
Zlatkin said requiring taxpayers to track gains on routine purchases creates friction for digital asset adoption while offering limited benefit to tax authorities. A de minimis exemption has long been sought by parts of the crypto industry as a way to make cryptocurrencies more practical for everyday payments.
Coinbase also called for coordination between future international reporting requirements and existing U.S. tax frameworks.
Zlatkin warned that overlapping reporting standards could create duplicate compliance obligations for American businesses operating across jurisdictions. He urged lawmakers to ensure that any future reporting regime avoids conflicting requirements and unnecessary administrative burdens.
Lawmakers examine digital asset tax reform
The hearing featured testimony from representatives across the crypto and financial sectors, including Sarah Reilly of Fidelity Investments, Lawrence Zlatkin of Coinbase, Jason Somensatto of Coin Center, and Mike Kaercher.
The House Ways and Means Committee’s package of digital asset tax proposals represents one of the most extensive congressional efforts to address cryptocurrency taxation to date, as lawmakers continue debating how digital assets should fit within the U.S. tax system.
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