Today, the House Committee on Ways and Means held a hearing on tax policy for digital assets. It is an important step in surfacing the issues that millions of Americans and U.S. businesses face under a tax framework that was not designed for this technology. With market structure advancing through the Senate and stablecoin rules moving into implementation, tax is the third leg of the stool, and today’s hearing brought it squarely onto the agenda.
What are the stakes?
Total crypto asset market capitalization stands at $3.2 trillion. One in four Americans own cryptocurrency, and 73% of small business owners expect crypto to grow as a business payment method. Yet the current framework is riddled with ambiguity. More than half of American crypto holders do not understand the fundamental question of when their holdings are taxable.
What is the cost of uncertainty?
As much as 88% of centralized exchange trading volume occurred on non-U.S. exchanges in 2025, and roughly 70% of staking infrastructure across the ten largest blockchain protocols now sits offshore. Unclear rules are pushing activity, infrastructure, and talent overseas. The Committee’s attention to these questions signals that Congress is prepared to treat tax not as an afterthought but as a structural part of getting digital asset policy right.
Witnesses from across the industry testified to how these issues play out in practice, for institutions managing digital assets at scale and for the everyday users navigating reporting obligations on routine transactions.
What did the industry say?
CCI members Fidelity and Coinbase testified as expert witnesses.
According to Sarah Reilly, Vice President and Senior Tax Counsel, Fidelity Investments, “Absent legislative action, tax uncertainty has real and harmful consequences.” She continued, listing four of these consequences: “It undermines taxpayer confidence and exposes taxpayers to unnecessary tax risk, particularly when varied interpretations result in confusing or contradictory tax advice from different advisers; It can produce inconsistent taxpayer outcomes, and create opportunities for more sophisticated taxpayers to take aggressive positions while discouraging market participation by careful taxpayers; It makes compliance more challenging, particularly for those without access to specialized tax advisers; and It incentivizes the offshoring of innovation and infrastructure, impairing U.S. competitiveness.”
On why these points matter, Reilly said, “although these issues may have once been viewed as affecting primarily crypto native market participants, the increasing use of blockchain technology in traditional finance has expanded their relevance. As a result, the lack of tax clarity impacts not only those directly involved in the crypto space but also the financial sector at large – for example, tokenized securities and payment stablecoins all run on blockchain.”
Coinbase was represented by Vice President of Tax, Lawrence Zlatkin. He set the stage for how big this market is and why Congress should care:
Digital assets represent the most important financial innovation of our lifetime – a market that has rapidly scaled to a $2+ trillion global economy. This technology is no longer a niche, theoretical experiment; it is a foundational layer of modern global commerce and finance. Yet, for over a decade, our tax laws have remained stubbornly stuck in the past. We have forced 21st-century financial innovation into 20th-century tax rules, producing entirely predictable and counterproductive results: massive confusion for everyday taxpayers, unmanageable data-processing burdens for the Internal Revenue Service (IRS), and a steady flight of technological innovation and capital away from the United States.
He made the case that a federal approach would remove the growing patchwork approach and how tax is the next critical step for protecting American consumers. “If market structure legislation provides the regulated highway, tax policy dictates whether capital will actually choose to drive on it. The need for federal action is becoming more and more urgent as states begin to consider their own digital asset tax regimes, creating the risk of a fragmented patchwork of taxes, reporting requirements, and compliance obligations that undermines the certainty Congress is working to establish. Moreover, as evidenced this month by Illinois, some of these state proposals will impose new transaction taxes that will erode parity with other financial products and threaten the global leadership America is working to secure.”
What does today’s hearing mean?
Alison Mangiero, Head of Strategy and U.S. Policy at the Crypto Council for Innovation, said the hearing reflected a growing recognition that Congress is ready to focus on comprehensive digital asset tax policy legislation. The questions before the Committee are concrete and addressable. Getting these right will provide clarity for consumers and builders, support innovation, and keep this industry onshore. Digital asset tax, she says, is “the third leg of the stool.”
CCI has urged the Committee to develop comprehensive tax legislation grounded in five principles: parity, fostering innovation, preserving core infrastructure, use case enablement, and global competitiveness. Those principles point toward a workable set of reforms.
Today’s hearing does not resolve these questions, but it puts them before the committee with the jurisdiction to act. Tax has too often been the missing piece of the policy conversation, even as market structure and stablecoin legislation moved forward. Surfacing these issues in an open hearing is how durable, comprehensive law begins.
CCI has been at the forefront of advocacy on digital asset tax issues, and we will continue to work with the Committee, members on both sides of the aisle, and our coalition partners to turn as the process moves forward. Clear tax rules will give consumers and builders the certainty they need, unlock innovation, and keep this industry in the United States. We look forward to the work ahead.
Learn more about CCI’s digital asset tax positions and access resources here:
- LETTER: Support for the Development of a Comprehensive Legislative Tax Framework for Digital Assets to the Committee on Ways & Means
- BRIEF: How Revising Tax Policy on Staking can Secure a Growing Sector of the Financial System
- OP-ED: Tax Season Is Here — Crypto Tax Policy Needs a Reset
- LETTER: An Open Letter in Support of a Digital Asset De Minimis Tax Exemption
- BLOG: Congress Passed GENIUS. Market Structure Is Next. But Skipping Crypto Tax Would Be a Mistake
