The U.S. Senate will hold a hearing next week. Will there be changes to encryption taxes?

Key Highlights: The U.S. Senate Finance Committee will hold a meeting next Wednesday to discuss how to tax encryption assets. This hearing has invited Coinbase's Vice President of Tax, Lawrence Zlatkin, Jason Somensatto from the think tank Coin Center, and a number of tax experts to testify.

Background: In July, the White House released a report stating that the current encryption tax rules are too chaotic and called for Congress to establish clearer rules. If Congress does not take action, the Treasury Department and the IRS will issue their own guidelines covering issues like stablecoin payments, airdrops, mining, and staking rewards.

How ridiculous the situation is: The IRS now treats encryption and NFTs as “property”, meaning that you have to pay taxes on every transaction that makes a profit. Even more outrageous is that those who mine and stake are subjected to “double taxation”—paying taxes once when receiving mining rewards and again when selling.

Someone is resisting: Senator Cynthia Lummis has been calling for an end to this “unfair tax treatment,” stating that the U.S. cannot become a global superpower in Bitcoin and encryption if this continues. In July, she also attempted to insert an amendment into Trump's budget proposal, but it ultimately did not succeed.

Hearing Chair: Senator Mike Crapo presides, representing the Senate Finance Committee.

This matter has quite a significant impact on people doing on-chain business. Let's wait and see if this tax system can eventually be clarified.