The U.S. Senate will discuss encryption tax reform next week, and Bitcoin holders may face significant changes in the tax system.

The regulatory landscape for Crypto Assets in the United States is about to undergo a significant turn. The Senate Finance Committee has officially announced that it will hold a special hearing next Wednesday, focusing on tax issues related to digital assets, which could fundamentally change the tax environment for Crypto Assets investors. This hearing will be chaired by Committee Chairman Mike Crapo and will bring together industry leaders and tax experts to discuss how to establish a more reasonable and clearer framework for encryption taxation.

Crypto Tax Reform Hearing: Industry Giants and Tax Experts Gather Together

(Source: U.S. Senate Finance Committee official website)

According to the official notice released on September 25, this high-profile hearing will have several heavyweight figures testifying, including Jason Somensatto, the policy director of the crypto policy think tank Coin Center. These two industry representatives will share their insights on crypto tax reform from the perspectives of exchange operations and policy research.

The hearing also invited authorities in the field of taxation, including Annette Nellen, chair of the Digital Assets Taxation Working Group of the American Institute of Certified Public Accountants, and Andrea S. Kramer, founder of ASKramer Law in Chicago. Kramer's firm specializes in encryption tax matters and has rich experience in digital asset tax law.

“This is an unprecedented opportunity for lawmakers to hear directly from industry and tax experts,” said crypto tax advisor Sarah Johnson. “The composition of the hearing shows that Congress is seriously considering establishing a tax framework specifically for digital assets, rather than continuing to apply traditional property tax rules.”

White House Crypto Assets Report: Blueprint for Tax Reform Revealed

The convening of this hearing is highly consistent with the cryptocurrency recommendations released by the White House's Digital Assets Working Group in July. The report calls on lawmakers to view crypto assets as a unique new asset class and to adjust existing securities and commodity tax rules according to the characteristics of digital assets.

The report emphasizes that if Congress fails to pass specific legislation, the Treasury Department and the IRS should issue clear guidance to clarify several key issues:

· How to handle tax treatment for stablecoin payments

· How to handle small amounts of Crypto Assets obtained from airdrops, mining, and staking

· How to simplify tax reporting requirements for small transactions

“The White House report essentially set the agenda for this hearing,” said tax policy analyst Robert Chen. “We can expect that senators will discuss these proposals and may propose more specific legislative frameworks based on them.”

Current Tax System Pain Points: Double Taxation and Excessive Complexity

The Internal Revenue Service (IRS) currently views crypto assets and non-fungible tokens (NFTs) as property rather than currency, which means that each transaction, conversion, or even using crypto assets to purchase coffee could trigger a capital gains tax event. This treatment has led to numerous issues, including significantly increased tax reporting complexity and potential double taxation.

Senator Cynthia Lummis has been a strong advocate for addressing the inequities in crypto tax treatment. She specifically pointed out the “unfair tax treatment” faced by miners and stake holders – they are taxed twice: first when they receive block rewards, and second when they sell those rewards.

“Now is the time to stop this unfair tax treatment and ensure that the United States becomes the world's superpower in Bitcoin and Crypto Assets,” Lummis emphasized in a statement made at the end of June.

At the beginning of July, Loomis attempted to include a provision to address this issue in Trump's budget reconciliation bill, but the provision ultimately failed to make it into the Senate's amendment for consideration. This specialized hearing may provide new momentum for her proposal.

Trump Administration: A New Chapter in Crypto Assets Regulation

Since Trump returned to the White House in January 2025, significant progress has been made in the regulation of Crypto Assets. The new government views the development of the encryption industry as an important measure to promote innovation and retain talent, and is committed to bridging the gap caused by the slow regulatory progress during the previous administration.

“The Trump administration's attitude towards Crypto Assets is obviously more positive,” said blockchain policy advisor Michael Zhang. “From the signing of the GENIUS Act to the current discussions on tax reform, we have seen a more comprehensive and systematic regulatory framework taking shape.”

During the Biden administration, tax rules were one of many issues that left industry participants confused. The lack of clear guidance led many investors to face tax compliance dilemmas, uncertain about how to correctly report their Crypto Assets and transactions.

Possible Reform Directions: Expert Predictions

Tax experts predict that the key reform directions that may be discussed in this hearing include:

· Establish a minimum tax reporting threshold: Exempt small transactions from tax reporting obligations, simplifying compliance burdens for ordinary users.

· Clarify taxation on mining and staking: Address the current issue of double taxation, which may delay income recognition until the asset is sold.

· Special treatment for stablecoins: Consider treating transactions of stablecoins for specific purposes as “quasi-cash” to reduce tax events.

· NFT classification standards: Establish clear standards to distinguish between NFTs that are taxable as collectibles (28% tax rate) and ordinary assets.

· Special Regulations for DeFi Protocols: Establishing specific tax guidelines for liquidity provision, yield farming, and other DeFi activities.

“The ideal outcome is to establish a balanced framework that ensures tax fairness without stifling innovation,” said crypto tax attorney Jennifer Moore. “Overly strict regulations may drive innovation and capital outflow, while overly lenient regulations could create tax loopholes.”

Industry Response and Market Impact

The cryptocurrency industry has responded positively to this hearing. Kristin Smith, Executive Director of the Blockchain Association, stated: “Clear tax guidance is key to the healthy development of the industry. We look forward to the Senate Finance Committee hearing from all parties and formulating policies that both protect consumer interests and support the United States in maintaining its leading position in global crypto innovation.”

Market analysts point out that the clarification of tax policies may have a positive impact on Crypto Assets prices. “Regulatory uncertainty has been one of the main barriers for institutional investors entering the crypto market,” said Crypto Assets analyst David Wang. “If tax rules become clearer and more reasonable, we may see more institutional funds flowing into this area.”

However, experts also remind investors to remain cautious. “Although the hearing is a positive step, there is still a long way to go from discussion to legislation to implementation,” warned tax policy expert Robert Lee. “Investors should continue to maintain good record-keeping habits and consider consulting professionals before the tax rules are finalized.”

Future Outlook: The Roadmap for Crypto Assets Tax Reform

As the hearing approaches, industry insiders are closely monitoring the potential legislative roadmap. Experts predict that the following developments may arise after this hearing:

· The Finance Committee may draft a detailed report on Crypto Assets tax reform proposals.

· The tax bureau may issue temporary guidance before legislation to address the most pressing issues.

· Bipartisan lawmakers may introduce a dedicated Crypto Assets tax bill before the end of 2025.

· The Ministry of Finance may establish a dedicated working group to study the long-term framework for digital asset taxation.

“This hearing is just the beginning,” said an insider involved in policy-making. “The real challenge is how to integrate various opinions into a framework that is both technically feasible and politically acceptable.”

As the United States' crypto tax policy evolves, other countries around the world are closely watching. The decisions made by the U.S. may set the tone for international crypto tax standards, influencing the global regulatory landscape for digital assets.