US House Proposes Stablecoin Tax Safe Harbor and Staking Reward Deferrals

Bipartisan U.S. House members led by Reps. Max Miller (R-OH) and Steven Horsford (D-NV) have drafted a crypto tax framework that would create a tax safe harbor for routine payments made with regulated, dollar‑pegged stablecoins and defer taxation on blockchain validation rewards. Key provisions propose exempting capital gains on regulated stablecoin payments of small value (example threshold drafted around $200, with peg stability criteria like a $0.99–$1.01 band and issuer standards tied to legislation such as the GENIUS Act), allowing an annual cap on the exemption, and excluding brokers/dealers from the safe harbor. The draft also would permit deferral of staking, mining and verifier rewards (taxed later as ordinary income, possibly up to five years), offer optional mark‑to‑market accounting for eligible traders, extend wash‑sale rules to crypto, and waive appraisal requirements for large charitable crypto donations. The framework aims to align crypto tax treatment with existing securities tax regimes, improve reporting accuracy following IRS moves to push more reporting and cost‑basis obligations onto exchanges (Form 1099‑DA phased in 2025–2026), and reduce compliance burdens for small transactions. Negotiations continue over exact thresholds, anti‑abuse measures and caps. Traders should monitor final language for the size of the safe‑harbor threshold, exclusions for brokers, timing of staking‑reward taxation and any annual caps, as these details could affect transaction costs, tax planning, exchange reporting flows and short‑term stablecoin demand.