Two U.S. lawmakers have put forth a bill to clarify the taxation of Bitcoin and cryptocurrency miners on block rewards. Representatives Drew Ferguson and Wiley Nickel introduced the Providing Tax Clarity for Digital Assets Act to the U.S. House of Representatives. The proposed legislation aims to categorize staking rewards as created property under the U.S. tax code, with taxes on block rewards being collected upon acquisition.
Representative Ferguson stated that the U.S. is lagging behind other countries in providing tax clarity for the emerging digital asset industry, leading to confusion, double taxation, and the relocation of American businesses overseas. Crypto advocacy group Coin Center praised the bill for its reasonable policies, which tax block rewards from proof-of-work and proof-of-stake networks when they are sold or spent, rather than when they are acquired. Sheila Warren, CEO of the Crypto Council for Innovation, also commended the legislation for providing much-needed guidance.
Coin Center argued that block rewards should be classified as value creation resulting from user actions and efforts, rather than income from an employer. They believe that this simple policy would resolve major issues with the current taxation of cryptocurrencies and level the playing field for the technology.
The bill comes approximately 10 days after the Bitcoin miner rewards were halved from 6.25 BTC to 3.125 BTC per block. Bitcoin halvings historically decrease the new supply of the cryptocurrency and eventually lead to price surges. At the time of writing, the price of BTC was $58,030, experiencing an approximately 11% decrease since the halving on April 19.