Crypto industry groups urge Congress to pass tax staking and mining bill unchanged

A coalition of digital asset advocacy groups representing some of the cryptocurrency industry's largest exchanges and platforms is urging Congress to pass a tax bill without revisions, saying the measure would provide long-sought clarity on the treatment of mining and staking rewards.

In a letter sent over the weekend to the House Ways and Means Committee Chair Jason Smith and top Democrat Richard Neal, the Blockchain Association, the Crypto Council for Innovation and The Digital Chamber said the legislation is "essential."

"The tax code currently fails to account for how miners and stakers create and interact with assets, and this bill provides much-needed clarity, protects U.S. competitiveness, and preserves a bipartisan compromise already established by that Congress," said The Digital Chamber CEO Cody Carbone.

Earlier this month, the House Ways and Means Committee held a hearing to debate several cryptocurrency bills, including the Tax Clarity for Mining and Staking Act. Over the years, the crypto industry has been pushing for staking rewards to be taxed when they are sold, not when they are created.

The new bill defers taxation for mining and staking until the assets are sold and creates an elective process where people can choose to either pay taxes at the time of sale or at the time of receipt.

The bill has not yet passed out of the tax-focused committee and could be amended in the meantime, as it's par for the course for tax bills to change as they make their way through Congress. There has also been some pushback on how long taxes can be deferred.

The American Bankers Association criticized the bill and said it shows "clear favoritism for cryptocurrencies over other asset classes," and warned it could draw away deposits from traditional banks. The Crypto Council for Innovation has since pushed back on that premise.

The trio of crypto advocacy groups said the bill needs to pass as it was introduced. 

"Reopening the compromise already struck in this legislation would risk reviving the very problems the bill resolves and stalling a bipartisan result that is finally within reach," they said in the letter.