Daines Emphasizes Need for Crypto Tax Framework in Senate Finance Committee hearing

WASHINGTON, D.C. – U.S. Senator Steve Daines today spoke with Francis Brooke, nominee to be Deputy Secretary of the Treasury, and Sriprakash Kothari, nominee to be Assistant Secretary of the Treasury in a Senate Finance committee hearing. They discussed the need for federal regulatory framework for digital assets. Watch Daines’ full remarks HERE. Daines discussed the need for crypto tax framework: Daines: Congratulations to each of the nominees here today, and thank you for the willingness to jump back in the arena and serve. In partnership with the administration, this Congress has taken historic steps to advance American leadership in digital assets. In fact, we’ve established the first federal regulatory framework for payment stablecoins through the Genius Act, and I remain hopeful that Congress will finish the work we started on digital asset market structure legislation. There’s a very important piece of the framework that is unfinished, and that’s the tax code. The current tax code forces taxpayers to apply rules written decades before blockchain technology even existed. Taxpayers deserve rules they can understand. The IRS deserves rules they can administer. And the American entrepreneurs deserve certainty that allows them to build their businesses here rather than overseas. My comprehensive digital asset tax framework that I’ve been developing over the past year would accomplish those goals. It is built around some commonsense principles. Reduce unnecessary complexity, increase compliance, protect the tax base, and keep digital asset jobs and the innovation here in the United States. This is not about giving digital assets special treatment. Where digital assets function like securities or commodities, my proposal applies familiar tax principles, including wash sale rules, constructive sale rules, and elective mark-to-market regime. Where blockchain technology creates genuinely different transactions, the proposal provides tailored rules for stablecoin payments, network fees, staking, lending, investment trusts, passive validation activity, and charitable contributions. Importantly, it pairs this commonsense relief with strong guardrails to prevent abuse. The administration has made clear that America should lead the digital asset economy. We need now, here in Congress, to finish the tax side of that ledger, of course, the jurisdiction here in the Finance Committee. Mr. Brooke, could you explain how a comprehensive framework that would reduce needless complexity apply traditional tax safeguards where appropriate and include strong anti-abuse rules could improve compliance while at the same time protecting the tax base? Brooke: We need to make sure that the United States is the leader, that we’re the ones setting the standards. Daines: Dr. Kothari, you’ve spent your career studying how government rules affect markets, affect capital formation, affect economic behavior. Could you tell us what the consequences might be for American competitiveness if Congress continues to leave digital asset taxpayers in businesses without clear and administrable tax rules? Kothari: If the U.S. has to have maintained a leadership position in digital assets, digital currency, then we need a regime that is clear in terms of rules of engagement and also we have to enforce those laws. ### Contact: Matt Lloyd, Gabby Wiggins