Coinbase has called on U.S. lawmakers to eliminate capital gains taxes on stablecoin transactions and ease reporting requirements for small crypto purchases. In testimony delivered on June 9 before the House Ways and Means Committee, Lawrence Zlatkin, vice president of tax at Coinbase, argued that the current tax system forces individuals to track gains and losses for everyday stablecoin payments and blockchain fees, creating compliance headaches without generating significant tax revenue.
Zlatkin appeared during a hearing focused on six proposed bills aimed at updating how digital assets are treated under U.S. tax law. These proposals cover areas such as mining rewards, staking income, charitable donations, broker reporting, and transaction-level taxes. He emphasized that federally regulated stablecoins pegged to the U.S. dollar should be treated at face value, as they are designed to maintain a one-to-one peg to the dollar. Under current rules, users must track cost basis and calculate gains or losses every time they spend stablecoins, even when the value barely changes—a requirement Zlatkin described as generating paperwork without providing practical tax benefits.
Coinbase also endorsed a proposal by Congressman Rudy Yakym to exempt gas fee transactions of up to $10 from tax reporting. Additionally, the company advocated for a broader de minimis exemption for small purchases made with Bitcoin and other cryptocurrencies, so consumers would not need to compute taxable gains on low-value transactions. This follows earlier discussions about crypto tax exemptions; in March, Coinbase CEO Brian Armstrong denied claims that he had lobbied against a Bitcoin tax exemption, stating he personally supported a de minimis rule for Bitcoin payments.
Beyond transaction taxes, Coinbase backed legislation by Congressman Mike Carey that would allow miners and validators to defer taxation on newly created digital assets until they are sold. Zlatkin compared digital asset production to farming, noting that a farmer is not taxed when wheat sprouts but only when the crop is harvested and sold. He stressed that similar logic should apply to mining and staking rewards.
Regarding wash-sale rules, which currently prevent investors from claiming tax losses if they repurchase the same asset within 30 days, Coinbase supports applying these restrictions to crypto markets but warned of implementation challenges. Digital assets trade continuously across centralized exchanges, decentralized pools, and self-custody wallets, and the industry lacks a unified system to detect wash-sale violations in real time. Coinbase requested an 18- to 24-month transition period before any crypto wash-sale rules take effect, cautioning that immediate implementation could lead to reporting errors and increased IRS audits.
The testimony arrives as policymakers continue debating broader crypto regulation. Recent proposals from the New York State Department of Financial Services aim to align state stablecoin oversight with the GENIUS Act. Meanwhile, crypto investment firm Paradigm has urged the FDIC to revise parts of its stablecoin framework that could restrict third-party rewards. Coinbase and Ripple have also pressed Congress to advance the CLARITY Act, a market structure bill that preserves certain stablecoin reward programs.