Blockchain Association Urges US Congress to Reform Crypto Tax Laws

The Blockchain Association, a prominent advocacy group representing over 100 member organizations, has formally petitioned US Congressional leaders to advance bipartisan digital asset tax legislation. The letter, submitted on October 22, 2026, outlines a comprehensive framework designed to reduce compliance burdens and provide regulatory clarity for the evolving cryptocurrency ecosystem. By proposing specific reforms to the current tax code, the association aims to foster innovation while ensuring that the United States remains a competitive hub for blockchain technology and digital finance.

Proposed Tax Exemptions and Reporting Adjustments

A central pillar of the proposal is the establishment of a de minimis exemption for small-scale digital asset transactions, which would alleviate the administrative pressure on individuals using crypto for everyday purchases. Furthermore, the association advocates for stablecoins to be treated as cash equivalents for tax purposes, recognizing their role as a medium of exchange rather than speculative investments. The letter also addresses the controversial 1099-DA reporting requirements, suggesting significant reductions to prevent redundant data collection.

• Limiting broker reporting obligations to custodial intermediaries only.
• Excluding non-custodial developers and infrastructure providers from brokerage definitions.
• Clarifying that internal transfers between self-custodied wallets do not trigger taxable events.
• Ensuring that smart contract interactions and cross-chain transfers are non-taxable when economic ownership remains unchanged.

Staking, Mining, and Institutional Integration

The Blockchain Association’s proposal seeks to redefine the timing of taxation for network participation rewards. Under the proposed guidelines, mining and staking rewards would be classified as self-created property, meaning they would only be subject to taxation at the time of disposition rather than at the moment of receipt. This shift would align the taxation of digital assets with other industries where produced goods are only taxed upon sale. Additionally, the association recommends the adoption of mark-to-market accounting for digital assets and the expansion of staking opportunities within retirement accounts to encourage long-term institutional participation.

The association urges the promotion of prudent, bipartisan digital asset tax legislation to resolve existing ambiguities that hinder the growth of the domestic digital economy.

As the Internal Revenue Service (IRS) continues to refine its oversight of the crypto sector, these legislative recommendations highlight the growing demand for a tax code that reflects the technical realities of DeFi and decentralized infrastructure. The outcome of this congressional appeal will likely influence the future tax obligations of both retail investors and enterprise-level blockchain operators across the United States.