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Seven major Bitcoin advocacy groups told congressional tax leaders this week that proposed cryptocurrency tax exemptions should cover Bitcoin and other major tokens, not just dollar-backed stablecoins, arguing that narrow relief would leave millions of users stuck with complex reporting requirements for everyday purchases.
In a letter sent this week to Senate Finance Committee Chairman Mike Crapo and House Ways and Means Committee Chairman Jason Smith.
The groups stressed that limiting de minimis exemptions only to dollar-pegged stablecoins could undercut efforts to make crypto practical for everyday payments.
The push comes as Congress weighs updates to the Internal Revenue Code to ease compliance for digital asset transactions, while the IRS still treats crypto as property, meaning routine uses like buying a cup of coffee with Bitcoin can trigger capital gains reporting, cost basis tracking and potential tax liability.
The coalition which includes the Bitcoin Policy Institute, Bitcoin Voter, Blocks, Crypto Council, Digital Chamber, MoonPay and River, warned that narrowing tax relief to only GENIUS-compliant stablecoins would seriously miss the mark and leave millions of crypto users facing undue complexity.
Central to the coalition’s argument is that stablecoins and network tokens like Bitcoin operate on interconnected blockchain systems. Exempting one while excluding the other, they argue, could create regulatory distortions that undermine the U.S. goal of fostering innovation in digital payments.
The letter recommends treating qualifying payment stablecoins as cash-like, with no per-transaction or annual limits, and proposes thresholds such as a $25 billion market cap to determine which network tokens qualify for relief.
Advocates highlighted data showing real-world adoption of cryptocurrencies: roughly 7 million Americans used Bitcoin or other network tokens for payments in 2024, and over 3,500 merchants across all 50 states now accept Bitcoin at the point of sale, the coalition noted.
These figures point to the growing role of digital assets beyond speculation, with supporters of tax reform saying the current tax regime’s treatment of earnings and spending as taxable events has dampened enthusiasm among consumers and small businesses alike.
“Payment stablecoins do not operate in a vacuum; they run on open blockchain networks that rely on separate network tokens for consensus, security, and transaction execution” – the coalition wrote in their letter.
Opposition from some lawmakers and regulators, however, underscores the challenge ahead. Critics argue that tax code changes must balance innovation with safeguards against abuse, revenue loss and market distortions.
The advocacy push arrives against the backdrop of broader crypto policy developments in Washington.
In July 2025, Congress enacted the GENIUS Act, establishing the first federal regulatory framework for stablecoins that requires issuers to maintain reserves backed one-to-one with cash or low-risk assets and imposes licensing and disclosure requirements.
While that law represents a milestone in digital asset regulation, it did not include comprehensive changes to how crypto transactions are taxed.
As lawmakers continue debating revisions to tax treatment, including recent bipartisan proposals to create safe harbor exemptions for small stablecoin transactions and tax deferral options.
The staking and mining rewards industry stakeholders are pressing to ensure that policy keeps pace with evolving market realities.
As discussions unfold in committee hearings and legislative drafts, the central question remains whether Congress will adopt a narrower tax relief focused only on stablecoins or broader reforms encompassing major cryptocurrencies used for everyday payments.
This is a decision with far-reaching implications for investors, merchants and the future of digital finance in the U.S.
