Tax Clarity for Staking and Mining
The bipartisan consensus on the GENIUS and STABLE Acts
What’s at Risk
IRS guidance issued in 2023 treats newly created tokens as immediate income—an approach that is inconsistent with longstanding principles of U.S. tax law and is administratively burdensome.
A modernized tax framework should treat newly created tokens in the same way other newly created property is treated and tax them only when they are disposed of. Updated guidance should apply longstanding character and sourcing rules to any gain realized at sale, maintain neutrality across all digital asset consensus mechanisms, and reduce compliance burdens while providing greater certainty for developers and validators.
.png)
Why this Matters
Fair and consistent tax treatment will help transform digital assets from unfairly disadvantaged assets into legitimate portfolio components.
.png)
These Tokens Aren’t Income at Creation
In proof-of-stake systems, validators independently create new blocks, which generates new tokens. These tokens are not received from someone else and do not represent a transfer of wealth. Under a consistent, realization-based tax framework, mining and staking rewards become taxable only when disposed of, and the gain or loss is measured at that time.
.png)
The Phantom Income Problem
Under the IRS’s 2023 interpretation, newly created tokens are taxed as if they were income, even when no gain has been realized and no transfer has occurred. This creates non-existent or “phantom” income, forcing millions of Americans into taxable events that are not gains under any standard economic definition.
.png)
American Crypto Leadership
Staking and mining secures the networks underpinning the next generation of financial infrastructure, and the U.S. should capture the economic value this innovation creates—not let it shift overseas. Clear, modern staking tax rules would strengthen domestic validator activity, attract investment, and keep the growth of the digital asset economy anchored in America.
A Sensible, Neutral Approach
A Pathway for U.S. Leadership
Reforming mining and staking taxation is one of the highest-impact, lowest-friction steps the U.S. can take to strengthen domestic blockchain infrastructure, attract validator activity, and restore policy competitiveness. The current mismatch between technology and tax guidance suppresses responsible innovation and driving activity offshore. A fix would expand tax fairness, reduce administrative strain, and support American leadership in decentralized technologies.
