Pressure is building in Washington as major crypto industry groups push Congress to pass a long-debated tax bill without further changes. The Blockchain Association, Crypto Council for Innovation, and Digital Chamber sent a joint letter to leaders of the House Ways and Means Committee on Sunday.
In the letter, the groups said H.R. 9175 would finally resolve years of uncertainty around how staking and mining rewards are taxed. They urged lawmakers to keep the current version of the Tax Clarity for Mining and Staking Act unchanged.
The organizations also argued that the bill would provide clearer rules for digital asset validation while keeping related activity within the United States. However, they warned that reopening negotiations could slow down progress and risk delaying a bipartisan deal that now appears close.
Industry seeks clear tax rules
At the heart of the industry’s push is the technical architecture of Proof-of-Work (PoW) and Proof-of-Stake (PoS) networks, which the groups note now collectively secure more than $1.7 trillion in digital assets.
The coalition pointed to existing IRS guidance as a source of ongoing confusion. Since 2014, miners have been taxed when they receive rewards. In 2023, the IRS applied similar rules to staking rewards. However, critics argue that taxing rewards immediately creates liquidity pressure and can lead to taxation on income that has not yet been realized.
The letter said H.R. 9175 offers a more practical approach. Under the proposal, taxpayers would pay tax when they sell their assets. Consequently, they would not need to sell portions of their holdings just to cover tax obligations.
Crypto Council for Innovation CEO Ji Hun Kim also commented on the debate on X. He said, “For years, CCI has argued for proper taxation of staking rewards. Rep. Horsford’s amendment would unfortunately break H.R. 9175.”
The sudden urgency from the crypto lobby stems from a counter-proposal introduced by Representative Steven Horsford (D-NV). The Horsford amendment seeks to place a mandatory five-year cap on the tax deferral window, meaning stakers would be forced to realize income on an arbitrary timeline regardless of market conditions or liquidity constraints.
Banking industry pushes back
The proposed tax deferrals have drawn sharp criticism from traditional financial institutions. Banking trade groups said the bill gives cryptocurrencies more favorable treatment compared to traditional investments. They pointed out that traditional investment yields, such as stock dividends, are taxed immediately upon receipt, drawing an unfavorable parallel to the tax-deferred framework proposed for crypto stakers.
Meanwhile, lawmakers are still reviewing other crypto-related tax proposals. One of them, the PARITY Act, would instruct the IRS to study possible exemptions for small crypto transactions. At the same time, Kraken reported sending about 56 million tax forms to the IRS, with more than 75% tied to transactions under $50.
As federal lawmakers bicker over framework definitions, individual states are moving ahead with their own agendas. In addition, Illinois has recently introduced stricter rules on digital asset taxation. Coinbase CEO Brian Armstrong warned that the changes could affect jobs, investment flows, and blockchain development in the state.
With the House Ways and Means Committee preparing to move its digital asset agenda forward, the outcome of H.R. 9175 will likely dictate whether the next generation of cryptographic infrastructure remains anchored in the United States or flees overseas.
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