The American Bankers Association (ABA) recently published a piece arguing that the Tax Clarity for Mining and Staking Act would confer an unfair tax advantage on crypto investors, at the expense of ordinary savers. The ABA’s argument is wrong on staking, wrong on the law, and wrong on what parity actually requires.
Their core claim is that staking rewards are economically equivalent to bank interest and should therefore be taxed the same way — on a current-year basis upon receipt. That analogy may be superficially appealing but is technically unfounded. Getting tax policy right for digital assets requires understanding what staking actually is, what the legislation actually does, and what parity actually demands.
CCI breaks down each of these three points below.
Staking Rewards Are Not Bank Interest. The Source of the Yield Is Fundamentally Different.
The ABA’s argument rests on a single premise: that staking rewards and bank interest are “similar” returns that should be taxed identically. This comparison fails at the threshold, because it misunderstands where the yield comes from.
Bank interest arises from a bilateral contractual relationship. The depositor transfers funds to the bank; the bank uses those funds and compensates the depositor for the privilege. There is a known obligor, a determinative amount, a predictable payment schedule, and immediate liquidity. The income is certain in value the moment it is credited.
To understand why the analogy fails, it helps to understand what staking actually is. Staking is a method of making the blockchain network more stable, efficient, and secure by incentivizing ecosystem participants to validate and add new blocks to a blockchain.
Proof-of-stake blockchains rely on a network of stakers who temporarily commit, or “stake”, their tokens for the chance to propose, verify, and add new blocks to the chain to keep the network accurate and secure across a globally distributed system. To ensure validators act in good faith, networks define a system of rewards for honest participation and penalties for misconduct — or “slashing,” automatic, protocol-enforced penalty that destroys a portion of their staked assets. To further discourage short-term or opportunistic behavior, protocols require staked assets to remain locked for specified periods before they can be withdrawn or used by stakers.
In return for supporting this process, the validators and other base layer actors that help secure blockchains from bad actor attacks receive newly created tokens and transaction fees. A wide range of U.S. market participants, including individual token holders, validators, custodians, and staking-as-a-service providers, now participate in the multi-billion dollar industry built around securing these networks.
To be clear, the scale and economic significance of this infrastructure is not trivial. In January 2019, total value staked across proof-of-stake networks was approximately $50 million. Today, over $700 billion of value is secured by staking on proof-of-stake networks, with approximately $245 billion in assets directly staked across dozens of networks that provide the foundational infrastructure for stablecoins, tokenized real-world assets, and applications that haven’t yet been imagined. Stablecoins alone, largely built on proof-of-stake networks, now exceed $322 billion in circulation and are used globally for payments, remittances, and settlement. As CCI testified last July before the Committee On Ways & Means (“House W&M Committee”), a functioning digital economy of this size requires a functioning tax framework. That tax framework should not rely on flawed analogies.
In staking, no such counterparty relationship exists. Staking rewards are newly created tokens issued by a protocol as an incentive for validating transactions and securing a decentralized network, a mechanism with no analog in traditional finance. No one borrows the staker’s capital and agrees to pay a return. The yield arises from protocol mechanics, not from a lending relationship. Its value at the moment of issuance is often uncertain: newly issued tokens may be subject to lock-up periods, slashing risk if the validator behaves incorrectly, and meaningful illiquidity that makes the spot price an unreliable proxy for the actual economic value.
Treating these two things identically is not neutrality—it is a category error dressed up as principle.
The Legislation Does Not Create an Indefinite Tax Holiday
The ABA inaccurately characterizes the Tax Clarity for Mining and Staking Act as granting crypto investors an “indefinite election” to avoid tax. They claim that this gives stakers a preferential timing advantage with no parallel elsewhere in the Code. This framing misreads the bill.
The proposed treatment would create an election that would defer inclusion of staking and mining rewards for newly created property until disposition, with cost basis established at that point. The tax obligation is not eliminated. Instead it is timed to the moment when the economic value of the reward is actually realized. That is a meaningful distinction, and it reflects the practical reality that newly created tokens received as staking rewards may not have a liquid market at issuance, may be subject to vesting or lock-up constraints, and may never convert to cash at the value implied by a spot price at the moment of receipt.
The IRS’s existing position in Rev. Rul. 2023-14, issued without notice-and-comment rulemaking, holds that staking rewards are taxable upon receipt at fair market value once the taxpayer gains “dominion and control.” That ruling has been directly contested in federal litigation (see Jarrett v. United States) precisely because the dominion-and-control standard does not map cleanly onto how staking rewards are actually created and received. Congress is not overriding settled law. It is stepping in where guidance has been inadequate and is being actively litigated to provide the statutory clarity that participants need.
The Competition Argument Is a Policy Concern, Not a Tax Argument
The ABA warns that tax advantaged crypto yield products could draw capital away from bank deposits, undermining community lending and CRA obligations. This purported concern is a financial stability argument, not a tax policy argument, and conflating the two obscures both debates.
If the ABA’s concern is that crypto products may attract capital at the expense of insured deposits, the appropriate response is to address that competitive dynamic through prudential regulation. This is precisely the conversation that was had with the GENIUS Act and is being had with broader market structure framework. The tax code is not the right tool for managing competitive dynamics between asset classes, and using it that way would set a troubling precedent that goes well beyond digital assets.
More fundamentally: the tax code does not exist to protect incumbents from competition. If a new activity generates genuine economic returns through a structurally different mechanism, the question is how to tax it accurately and consistently, not how to handicap it in order to preserve existing market share.
True Parity Requires Understanding What You Are Comparing
The ABA closes with an appeal to “tax parity.” This is a principle that CCI strongly supports. Parity, however, means equal treatment of economically similar activities, not identical treatment of activities that are structurally distinct. Bank interest and staking rewards are not the same. They arise through different mechanisms, carry different risk profiles, involve no common counterparty relationship, and have fundamentally different liquidity characteristics at the moment the income is generated.
Parity that ignores those differences does not produce neutrality. Instead it produces systematic disadvantage for a new technology by forcing it into a tax framework designed for a different economic reality. That is not fairness:it is incumbency protection dressed up as fairness.
At the June 9th Committee on Ways & Means hearing and during the process ahead, Congress has the opportunity to get this right by establishing a tax framework that reflects the actual mechanics of blockchain validation, provides long overdue certainty to U.S. participants, and positions American digital asset infrastructure to compete globally. The Tax Clarity for Mining and Staking Act is a serious, carefully constructed step in that direction.
The banking industry’s effort to block it — by invoking the language of fairness while defending a status quo that systematically disadvantages new technology — deserves to be recognized for what it is.
