Coinbase Pushes Congress to End Stablecoin Tax Headaches

Coinbase is asking lawmakers to scrap capital gains taxes on stablecoin payments and exempt small crypto transactions from reporting rules that the company calls burdensome.

Lawrence Zlatkin, Coinbase's vice president of tax, delivered the message before the House Ways and Means Committee on June 9. The hearing covered six bills that would rewrite how the U.S. tax code treats digital assets – mining rewards, staking income, charitable donations, broker reporting, and transaction-level rules.

Zlatkin said stablecoins pegged to the dollar at a one-to-one ratio should be treated at face value for tax purposes. Under current law, users must track cost basis and calculate gains or losses every time they spend a stablecoin, even when the value barely moves. That generates paperwork without producing meaningful revenue, he argued.

Alongside the stablecoin proposal, Coinbase endorsed a bill from Congressman Rudy Yakym that would exempt gas fee transactions of up to $10 from tax reporting. The company also called for a broader de minimis exemption covering small purchases made with Bitcoin or other cryptocurrencies, so consumers would not need to calculate taxable gains on every low-value payment.

That request follows earlier debate. In March, Coinbase CEO Brian Armstrong denied accusations that he had lobbied against a Bitcoin tax exemption. He said he had personally supported a de minimis rule for Bitcoin transactions.

Beyond transaction taxes, Coinbase backed legislation from Congressman Mike Carey that would let miners and validators defer taxation on newly created digital assets until they sell them. Zlatkin compared digital asset production to agriculture:

“A farmer is never taxed when a bushel of wheat sprouts from the ground; they are taxed when they harvest that crop, bring it to market, and execute a sale.”

Attention also turned to wash-sale rules, which prevent investors from claiming tax losses when they repurchase the same asset within 30 days of a sale. Coinbase said it supports applying wash-sale restrictions to crypto but warned that implementation is technically difficult. Digital assets trade continuously across centralized exchanges, decentralized liquidity pools, and self-custody wallets. The industry lacks a unified data system to identify violations in real time, Zlatkin said.

For that reason, Coinbase asked Congress to provide at least 18 to 24 months before any crypto wash-sale rules take effect. An immediate rollout could lead to reporting mistakes and more IRS audits, according to Zlatkin.

The testimony arrives as policymakers continue debating crypto regulation beyond taxation. Recent proposals from the New York State Department of Financial Services seek to align state stablecoin oversight with requirements established under the GENIUS Act. Industry participants including Coinbase and Ripple have also called on Congress to advance the CLARITY Act, a market structure bill that preserves certain activity-based stablecoin rewards.