• U.S. Treasury Secretary Scott Bessent has emphasized the challenges in applying capital gains taxes to cryptocurrency used in exchanges or transactions.
  • This comes amid ongoing bipartisan efforts to reform crypto taxation, including a push to address double taxation of staking rewards before 2026.
  • The debate reflects broader tensions between fostering innovation and ensuring tax compliance in the rapidly evolving digital asset space.

Scott Bessent, who serves as both U.S. Treasury Secretary and Acting IRS Commissioner, has publicly acknowledged the intricate nature of taxing cryptocurrency when it's utilized for exchanges or transactions, according to people familiar with his recent remarks. The comments arrive as the Trump administration grapples with how to modernize tax rules for digital assets without stifling growth or creating undue burdens for millions of holders.

In late 2025 and early 2026, Bessent addressed tax refunds under the OBBBA law, noting that crypto investors are excluded because digital assets are treated as property subject to capital gains taxes on sales, trades, or spending—with rates ranging from 10% to 37% for short-term holdings and 0% to 20% for long-term ones based on the holding period. This framework, established by IRS Notice 2014-21, has long been a point of contention, especially as crypto adoption surges and transactions become more commonplace.

Efforts to restructure the tax approach have hit a snag, however, with bipartisan lawmakers urging swift action. In a December 19, 2025, letter, Rep. Mike Carey and 17 colleagues pressed Bessent to update staking reward taxation before 2026, arguing that current rules cause double taxation—first when rewards are received as ordinary income at fair market value, and again upon sale. Without a deal, critics warn, this could discourage participation in staking, which is crucial for blockchain network security, and push activity offshore.

Industry groups like the Blockchain Association have been lobbying aggressively for reforms, advocating for taxation only at the time of sale rather than receipt. On the other hand, organizations such as Americans for Tax Fairness oppose proposals like de minimis exemptions or special charitable rules, viewing them as undue favors for wealthy investors and miners. The IRS, meanwhile, has been ramping up reporting requirements, with exchanges like Coinbase (COIN) now mandated to issue Form 1099-DAC, integrating crypto more firmly into traditional tax frameworks.

Recent market data shows heightened volatility in crypto prices as investors await clarity, with some analysts suggesting that the $150 billion in tax refunds expected in 2026 under OBBBA could act as a "pre-programmed stimulus" for crypto investments if rules are eased. In the background, a Bipartisan Discussion Draft from late 2025 proposes mark-to-market accounting and lending nonrecognition, signaling a high likelihood of legislation in 2026 that could treat crypto more like securities or commodities.

Attempts to reach Bessent's office for further comment were unsuccessful, but sources indicate that short-term IRS guidance on staking, wrapping, and NFTs is probable before the 2026 filing deadline. The long-term outlook remains uncertain, with experts predicting that fairer staking treatment could boost U.S. leadership in digital assets, though revenue trade-offs loom large. As one industry insider put it, "The complexity isn't just technical—it's about balancing innovation with accountability in a space that's still finding its footing."

Correction: An earlier version of this article misstated the timing of the bipartisan letter; it was sent on December 19, 2025, not 2024.