2024

United

Bitcoin

Two U.S. lawmakers have proposed a bill that clarifies the taxation framework for cryptocurrency staking rewards. 
Bipartisan lawmakers Reps. Wiley Nickel, D-N.C., and Drew Ferguson, R-Ga, <a href="https://twitter.com/RepDrewFerguson/status/1785332985710964926?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1785332985710964926%7Ctwgr%5E8672373dc0cbacb54e9206e89d4e38c6c60c23cf%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.cryptotimes.io%2F2024%2F05%2F02%2Fus-representatives-introduce-cryptocurrency-tax-clarity-bill%2F" target="_blank" rel="">introduced</a> the Providing Tax Clarity for Digital Assets Act on May 1 to clarify how staking rewards are taxed. The law proposes preventing double taxation by taxing the staking rewards only at the time of sale. 
The bill would define staking rewards as created property under the U.S. tax code.&nbsp; 
“The Providing Tax Clarity for Digital Assets Act would give the industry desperately wanted tax clarity, establish United States leadership in digital asset tax treatment, and encourages innovation and business in the United States,” Rep. Ferguson said. 
Staking rewards are earned by cryptocurrency holders who actively participate in securing and validating a blockchain network, receiving additional tokens as an incentive. The complexity arises because their taxation remains unclear, with many investors confused over whether rewards should be taxed upon receipt or sale. 
The proposed law responds to an earlier <a href="https://crypto.news/staking-rewards-are-now-taxable-says-irs/" rel="">ruling</a> by the Internal Revenue Service. According to the tax watchdog, crypto investors earning staking rewards are required to include the value of those rewards in their gross income when filing taxes. 
 You might also like: <a href="https://crypto.news/irs-to-target-crypto-tax-evasion-with-enhanced-enforcement-in-2024/" rel=""> IRS to target crypto tax evasion with enhanced enforcement in 2024 </a> 
The proposed law has garnered positive feedback from the broader community. The idea of taxing block rewards from proof-of-work or proof-of-stake networks only at the time of sale has been met with enthusiasm. In a statement to crypto.news, Taha Abbasi, Chief Technology Officer at staking technology Infrastructure provider Ferrum Network, expressed his optimism, stating: 
“We applaud the initiative by U.S. Congressman Drew Ferguson (R-GA) and Congressman Wiley Nickel (D-NC) to facilitate clarification in Tax Legislation for digital assets specifically relating to staking technologies […] We believe this bill will help cement the US as not only the leader in technical innovation, but also legal and regulatory innovation to support our ever evolving technical ecosystem.” 
Meanwhile, Sheila Warren, CEO of the Crypto Council for Innovation, <a href="https://x.com/sheila_warren/status/1785476666367811998" target="_blank" rel="">called</a> the law “right on point,” adding that the bill will offer the “needed clarity.”&nbsp; 
Both Rep. Nickel and Rep. Ferguson have advocated for implementing clear regulatory frameworks for digital assets. Last year, Rep. Nickel played a key role in <a href="https://nickel.house.gov/news/documentsingle.aspx?DocumentID=369" target="_blank" rel="">pushing</a> the Financial Innovation and Technology Act, which looks to create a regulatory framework for digital assets designed to protect consumers and encourage innovation. 
The bill closely followed the fourth Bitcoin <a href="https://crypto.news/duko-pepefork-byte-dingocoin-substantial-gains/" rel="">halving event</a> on April 19, which reduced Bitcoin mining rewards from 6.25 BTC to 3.125 BTC per block.&nbsp; 
 Read more: <a href="https://crypto.news/indonesia-and-australia-sign-agreement-on-crypto-taxation/" rel=""> Indonesia and Australia sign agreement on crypto taxation </a>

New US bill aims to eliminate double taxation on crypto staking rewards

crypto.news

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