According to testimony delivered by Coinbase vice president of tax Lawrence Zlatkin before the House Ways and Means Committee on June 9, the exchange is urging Congress to remove capital gains tax requirements on stablecoin payments and exempt small crypto transactions from burdensome reporting rules. Speaking during a hearing focused on six digital asset tax bills, Zlatkin argued that federally regulated stablecoins pegged to the U.S. dollar should be treated at face value for tax purposes because they are designed to maintain a one-to-one relationship with the dollar. The hearing comes as the crypto market has reached $3.2 trillion in total asset capitalization, with one in four Americans now owning cryptocurrency and 73% of small business owners expecting crypto to grow as a payment method.
Under the current system, users may need to track cost basis and calculate gains or losses every time they spend stablecoins, even when those transactions involve minimal value changes. As reported by Coinbase, such requirements generate paperwork without producing meaningful tax revenue. The exchange backed a proposal introduced by Congressman Rudy Yakym that would exempt gas fee transactions of up to $10 from tax reporting requirements. Additionally, Coinbase called for a broader de minimis exemption covering small purchases made with Bitcoin and other cryptocurrencies, allowing consumers making low-value crypto payments to avoid calculating taxable gains for every transaction. The reforms are particularly important given that 88% of centralized exchange trading volume occurred on non-U.S. exchanges in 2025, with roughly 70% of staking infrastructure across the ten largest blockchain protocols now sitting offshore.
According to Coinbase VP Lawrence Zlatkin, tax policy represents the 'third leg of the stool' alongside market structure and stablecoin legislation, with the need for federal action becoming increasingly urgent. As he noted, "If market structure legislation provides the regulated highway, tax policy dictates whether capital will actually choose to drive on it." The urgency stems from states beginning to consider their own digital asset tax regimes, creating the risk of a fragmented patchwork of taxes that undermines the certainty Congress is working to establish. Zlatkin warned that some state proposals will impose new transaction taxes that will erode parity with other financial products and threaten America's global leadership in digital asset innovation.
Attention turned to wash-sale rules, which currently prevent investors from claiming tax losses when they repurchase the same asset within 30 days of a sale. While Coinbase said it supports applying wash-sale restrictions to crypto markets, Zlatkin warned that implementation presents technical challenges because digital assets trade continuously across centralized exchanges, decentralized liquidity pools, and self-custody wallets. According to his testimony, the industry lacks a unified data system capable of identifying wash-sale violations across those venues in real time. For this reason, Coinbase asked Congress to provide an implementation period of at least 18 to 24 months before any crypto wash-sale rules take effect. The implementation concerns are particularly significant given the current regulatory landscape and the need for comprehensive, coordinated policy approaches.
