Coinbase urges Congress to scrap taxes on stablecoin spending

Coinbase has urged U.S. lawmakers to remove capital gains tax requirements on stablecoin payments and exempt small crypto transactions from burdensome reporting rules.

According to testimony delivered by Coinbase vice president of tax Lawrence Zlatkin before the House Ways and Means Committee on June 9, the current tax framework forces Americans to calculate gains and losses on routine stablecoin payments and blockchain transaction fees, creating compliance burdens with little practical benefit.

Zlatkin appeared during a hearing focused on six digital asset tax bills that would update how the U.S. tax code treats cryptocurrencies, including proposals covering mining rewards, staking income, charitable donations, broker reporting obligations, and transaction-level tax rules.

Stablecoin payments should not trigger taxable events

Speaking on behalf of Coinbase, Zlatkin told lawmakers that federally regulated stablecoins pegged to the U.S. dollar should be treated at face value for tax purposes because they are designed to maintain a one-to-one relationship with the dollar.

Under the current system, users may need to track cost basis and calculate gains or losses every time they spend stablecoins, even when those transactions involve minimal value changes. Zlatkin argued that such requirements generate paperwork without producing meaningful tax revenue.

Alongside stablecoin reforms, Coinbase backed a proposal introduced by Congressman Rudy Yakym that would exempt gas fee transactions of up to $10 from tax reporting requirements.

The company also called for a broader de minimis exemption covering small purchases made with Bitcoin and other cryptocurrencies. Under Coinbase’s proposal, consumers making low-value crypto payments would not need to calculate taxable gains for every transaction.

The request follows earlier debate around crypto tax exemptions. In March, Coinbase chief executive Brian Armstrong rejected claims that he had lobbied against a Bitcoin tax exemption, describing those accusations as false and stating that he had personally supported a de minimis rule for Bitcoin transactions.

Coinbase seeks changes for staking and wash-sale compliance

Beyond transaction taxes, Coinbase endorsed legislation introduced by Congressman Mike Carey that would allow miners and validators to defer taxation on newly created digital assets until those assets are sold.

Explaining the company’s position, Zlatkin compared digital asset production to agricultural activity.

“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 currently prevent investors from claiming tax losses when they repurchase the same asset within 30 days of a sale.

While Coinbase said it supports applying wash-sale restrictions to crypto markets, Zlatkin warned that implementation presents technical challenges because digital assets trade continuously across centralized exchanges, decentralized liquidity pools, and self-custody wallets.

According to his testimony, the industry lacks a unified data system capable of identifying wash-sale violations across those venues in real time.

For that reason, Coinbase asked Congress to provide an implementation period of at least 18 to 24 months before any crypto wash-sale rules take effect. Zlatkin said an immediate rollout could result in reporting mistakes and increased IRS audits.

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.

Meanwhile, crypto investment firm Paradigm has separately urged the FDIC to revise parts of its proposed stablecoin framework that could restrict rewards offered by third-party companies.

Several 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 reward programs.