Three leading trade groups representing the crypto industry have called on the US Congress to quickly pass a new tax bill on digital assets. The regulation in question stipulates that crypto rewards obtained through mining and staking will be excluded from the scope of taxable income. However, Democrats in the House of Representatives say that this approach could make crypto assets more advantageous compared to traditional investment instruments such as stocks and bonds.
Call from the industry to the committee for speed
In a letter sent this week to senior Republican and Democratic members of the House Taxation and Revenue Committee, executives from the Blockchain Association, Crypto Council for Innovation and Digital Chamber asked for the bill to move forward in its current form. These organizations are among the main institutions defending the interests of the crypto industry in Washington.
In their letter, the groups stated that reopening the previously reached consensus on the bill could bring back the problems sought to be resolved and lead to a delay in the outcome approaching bipartisan support.
The proposal, called the Tax Clarity for Mining and Staking Act, was one of six crypto tax bills considered in committee this month. If the regulation is adopted, assets obtained from mining and staking activities will not be considered declarable income unless they are sold. In current practice, newly generated crypto assets and staking rewards of US taxpayers are considered income regardless of whether they are converted into cash or not.
Why are Democrats keeping their distance?
The bill was one of the most controversial topics during the committee discussions. Democratic members argued that providing a special tax advantage for crypto could affect the balance in financial markets. According to them, such a change could make digital assets more attractive compared to traditional investment instruments that are taxed.
Leading Democrats on the committee have previously said they do not expect any crypto tax bill to become law before the midterm elections in November. The approaching election calendar makes the prospects for progress later this year even more uncertain.
Lobby traffic accelerated
A representative speaking on behalf of the Digital Chamber said the agency plans to take about a dozen member companies to Congress on Wednesday to rally support for the tax bill. Asked whether the bill could pass before the election despite growing Democratic opposition, the representative said this week’s contacts would provide a clearer picture of the level of political will.
The pressure is not limited to this bill only
Similar time pressure is being felt on the Clarity Act, which is being closely watched in the Senate. This bill aims to provide a clearer legal basis for the majority of crypto activities by reshaping US securities law. Supporters of the bill state that if the regulation does not advance by August, it may become difficult to become law in the near term.
This table shows that tax and market structure topics in crypto regulations in the USA directly intersect with the election calendar. While sector representatives want the current consensus to be preserved, the opposition wing argues that the impact of the bill on the markets should be evaluated more carefully.
