The Blockchain Association urged an overhaul of digital asset tax rules, including tax exemptions for small transactions and taxation of mining and staking rewards when they are sold.

On Oct. 22, local time, the Blockchain Association said in a letter to House and Senate leaders that 67 million Americans hold or use digital assets, but the current tax system was designed for past economic conditions and is creating uncertainty and excessive burdens for taxpayers, Bitcoin Magazine reported.

Its key demands include tax exemptions for small transactions, treating stablecoins as cash under tax law, and taxing mining and staking rewards at the time of sale. It also called for broker reporting obligations to apply only to intermediaries that custody or control customer assets. It stressed that wash-sale rules limiting tax deductions after repurchasing assets following loss realization should be extended to digital assets, but should not regulate everyday transactions.

The demands also included a safe harbor for foreign investors using U.S. exchanges, an option for mark-to-market taxation, and applying research and development tax credits to blockchain development. The letter did not include an expression of support for any specific bill under discussion in Congress.

The House Ways and Means Committee passed the Digital Asset Tax Certainty Act (H.R. 10357) last month. Under certain conditions, the bill exempts recognition of gains and losses when network and transaction fees of $10 or less are paid in digital assets, and extends wash-sale and deemed sale rules to digital assets. It excluded qualified dollar-pegged stablecoins from wash-sale rules.

But provisions that the industry had prioritised to defer taxation of mining and staking rewards were removed from the final text. Related language pushed by Representative Mike Carey was included in the initial draft, but the final version classified validation rewards as ordinary income and taxed them at the time of receipt.

In the Senate, the ADAPT Act introduced by Senator Steve Daines is under discussion. It would exempt recognition of gains and losses for payments made with dollar-pegged stablecoins covered by the GENIUS Act and create an exception for fees of $10 or less. It would also expand wash-sale rules but include transition rules for existing holdings and provide exceptions for mining and staking rewards. A bill previously introduced by Senator Cynthia Lummis included a small-transaction tax exemption capped at $300 per transaction and $5,000 per year, but it remains pending in the Senate Finance Committee.

The Blockchain Association assessed the ADAPT Act as progress toward establishing a comprehensive digital asset tax system. It said member companies are reviewing the bill’s details and it will continue consultations during the legislative process.

The legislative calendar is also tight. Congress is in recess until after the Nov. 3 midterm elections. Even after lawmakers return, there is little time left before the end of the 119th Congress, and they also must address other issues such as the government budget. Lummis’s planned departure in January 2027 is another variable.

The industry is pushing tax discussions in part because of delays in processing the Clarity bill. The bill passed the House in July 2025, but ran into disagreements in the Senate over stablecoin revenue structures and ethics provisions related to the Trump family’s cryptocurrency business. On Sept. 15, a motion to end debate to begin consideration of the bill failed, with 49 in favour and 50 against. Senator Thom Tillis submitted a motion to reconsider, leaving procedural room to revive the effort.

Separately from congressional talks, regulators are continuing to refine policy. The Office of the Comptroller of the Currency (OCC) on Oct. 21 announced final rules to implement the GENIUS Act. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are also fine-tuning market structure policy through rulemaking and enforcement. The remaining question is whether Congress can also resolve uncertainty over digital asset taxes within its short session.