Blockchain Association Proposes Tax Relief on Small Crypto Transactions to US Lawmakers in Washington

A major US crypto lobbying group, the Blockchain Association, has laid out its vision for how digital currencies should be taxed, and it’s sparking debate on Capitol Hill.

On Tuesday, the group shared its tax policy positions with lawmakers, emphasizing that “low-dollar” crypto transactions shouldn’t be bogged down by heavy reporting requirements.

According to the Association, taxing tiny gains or losses from routine crypto transactions adds paperwork and administrative costs without generating meaningful revenue.

Their proposal includes treating stablecoins like cash for everyday purchases and exempting small transactions from federal taxes.

Wash Sale Rules for Crypto Gains and Losses

Beyond small transaction relief, the Blockchain Association also recommended applying wash sale rules to cryptocurrencies.

This would allow investors to claim losses on a sale even if they immediately repurchase the same asset — a concept already familiar in the stock market but new in crypto.

The organization emphasized that tax reporting for digital assets should balance enforcement with privacy, making sure the IRS can catch illicit activity without burdening ordinary users with excessive reporting requirements.

Mining and Staking Still on the Hook

While the Association wants lighter rules for everyday transactions, it made clear that crypto mining and staking should remain taxable.

Capital gains tax should apply to rewards earned through these activities, reflecting the group’s acknowledgment that not all crypto-related income is trivial.

Legislative Context and Capitol Hill Conversations

This policy push comes as Congress debates the shape of US crypto taxation.

Republican Senator Cynthia Lummis introduced a bill in July that would exempt some crypto transactions from reporting requirements, aligning with many recommendations from the Blockchain Association.

However, Democratic Senator Elizabeth Warren has strongly opposed these measures. She argues that a de minimis exception, allowing transactions under $300 to go unreported, could cost the US roughly $5.8 billion in lost tax revenue.

Warren challenged the idea by asking, “If someone bought $300 worth of gold, or $300 worth of Apple stock, would they be required to report any income they made from those transactions?”

Earlier this month, the Blockchain Association also met with White House officials to advance market structure legislation, which included provisions favorable to stablecoin rewards — a key priority for the crypto industry.

International Echoes

While the US debates crypto taxation, other countries are also moving fast.

The Dutch House of Representatives recently advanced a 36% tax law on certain crypto activities, and in Asia, India continues to enforce its crypto tax rules strictly, highlighting the global complexity of regulating digital assets.

What’s Next?

The coming months could see intense negotiations in Congress as lawmakers weigh the Blockchain Association’s recommendations against revenue and enforcement concerns.

Expect continued hearings, lobbying efforts, and possibly amendments to Senator Lummis’ bill.

The fight over small transaction exemptions versus broader enforcement priorities will likely dominate crypto tax policy discussions through 2026.

Investors and everyday crypto users should watch closely: even minor policy tweaks could change reporting obligations and affect how rewards from staking or small transactions are treated for tax purposes.

Summary

The Blockchain Association has outlined its preferred approach to US crypto taxation, calling for exemptions on low-dollar transactions, stablecoins treated like cash, and wash sale rules applied to digital assets.

Mining and staking activities would remain taxable.

The group has met with Congress and the White House to advocate for these positions, but Democratic Senator Elizabeth Warren opposes the proposed exemptions, citing significant revenue loss.

With debates ongoing, US crypto taxation is poised for intense scrutiny, and future legislation could reshape reporting rules and investor obligations.