Stablecoin payments under $200 could soon be treated as tax‑free transactions in the United States — but only if Congress signs off on a new proposal that aims to bring long-awaited clarity to crypto taxation and everyday digital payments.
Lawmakers in the House of Representatives, Max Miller of Ohio and Steven Horsford of Nevada, have introduced draft legislation that would carve out a narrow tax exemption for small stablecoin transactions. Under their proposal, payments using stablecoins valued at $200 or less would qualify for a so‑called de minimis exception.
The text of the draft clarifies that the goal is to mirror the existing treatment of small foreign currency transactions under section 988 of the tax code by creating a per‑transaction threshold of $200. In other words, using a stablecoin to buy a coffee or pay for a rideshare would no longer trigger a taxable event, as long as the value of each payment stays below that limit.
Representative Miller framed the initiative as a bipartisan effort focused on consumer protection and regulatory clarity. He argued that the bill is designed to shield people making everyday purchases from complex tax liabilities, while also giving innovators and investors a clearer rulebook to follow. At the same time, he emphasized that enhanced compliance mechanisms would ensure all market participants operate under the same standards.
This is not Congress’s first attempt to simplify how small crypto transactions are taxed. Back in July 2025, Senator Cynthia Lummis — a prominent supporter of Bitcoin — advanced a similar concept, but with slightly different numbers. Her proposal envisioned a $300 exemption for minor crypto transactions, going a bit higher than the current $200 idea circulating in the House.
Lummis also pushed for broader tax deferral for staking and mining rewards. During the debate over President Donald Trump’s “Big Beautiful Bill,” she argued that rewards generated from staking and mining should not be taxed immediately upon receipt. Instead, the tax event should occur only when those rewards are sold or otherwise disposed of. To limit potential abuse, her plan capped the annual tax‑deferred gains from such activities at $5,000.
Despite these guardrails, the package did not survive the legislative process. The provisions failed to clear the necessary voting thresholds and were cut from the final version of the bill. Some Democratic lawmakers objected that the proposal could reduce federal tax revenue, especially if crypto adoption continues to grow and more taxpayers take advantage of the exemption and deferral.
Under current law, the U.S. Internal Revenue Service treats cryptocurrencies as property rather than currency. That classification brings digital assets squarely under the capital gains regime. Depending on an individual’s income bracket and the holding period, capital gains tax rates on crypto can range from 10% to 37% for short‑term holdings. Long‑term investors who hold assets for more than a year enjoy lower preferential rates, roughly between 0% and 20%.
This property treatment has an important side effect: every time a person spends crypto — even for a small purchase — they are technically disposing of property. That means a potential capital gain or loss calculation for each transaction, creating a significant compliance burden for ordinary users and making crypto impractical as a medium of routine payment.
The new stablecoin proposal seeks to chip away at this problem in a limited way. By establishing a de minimis exemption, it would effectively say that tiny gains or losses on qualifying stablecoin transactions do not need to be tracked and reported. If adopted, this could be a meaningful step toward making stablecoins function more like cash in everyday commerce, at least for low‑value payments.
Whether this tax relief will be folded into broader legislation on digital asset market structure remains uncertain. Lawmakers have been working on comprehensive frameworks addressing everything from stablecoin issuance and reserves to trading platforms and investor protection. The fate of the de minimis rule may depend on how negotiations over these larger packages evolve and the willingness of both parties to compromise on tax policy.
At the same time, there is a parallel battle brewing over yields paid on stablecoin holdings. Several major crypto platforms, including Gemini and Coinbase, offer customers rewards in the 3%–4% range on certain stablecoin products. This has drawn sharp opposition from banking industry groups, which claim such yields could siphon deposits away from traditional community banks that typically offer well under 1% on standard checking accounts.
Banking lobbyists argue that if large amounts of retail capital flow into stablecoins in search of better returns, local banks could see their funding bases erode. That, in their view, could threaten lending to small businesses and households and ultimately undermine parts of the traditional financial system. They are therefore pressing policymakers to restrict or heavily regulate yield‑bearing stablecoin products.
Crypto industry leaders see this push as an attempt to stifle competition rather than a genuine concern over systemic risk. Tyler Winklevoss, co‑founder of Gemini, has been particularly vocal, condemning what he calls anti‑competitive overreach by “banksters.” He and more than a hundred other companies have backed a formal letter urging lawmakers to protect the current wording of the proposed GENIUS Act on stablecoins, insisting that banks should not be allowed to shut down innovation under the guise of consumer protection.
From a user’s perspective, the combination of tax clarity on small payments and access to yield on stablecoin balances could dramatically reshape how digital dollars are used. If small stablecoin purchases become tax‑free and platforms continue to offer attractive interest-like rewards, people might increasingly treat tokenized dollars as both a payments tool and a savings vehicle. That, in turn, could accelerate the shift of financial activity from banks to crypto platforms.
However, even a de minimis exemption would come with limitations and trade‑offs. The proposed $200 threshold applies on a per‑transaction basis, not as an overall daily or monthly limit. Users could still face questions about whether repeated transactions just under the threshold might be considered abusive if regulators suspect deliberate structuring to avoid tax. Additionally, the exemption is targeted at stablecoins, not volatile cryptocurrencies like Bitcoin or Ether, which would still generate taxable events whenever used in commerce.
Businesses accepting stablecoin payments would also need guidance. Accounting systems, point‑of‑sale tools, and tax software would have to be updated to correctly apply the exemption and report only those transactions that fall outside the safe harbor. Clear rules on how to measure the $200 value — for example, based on the fair market value at the time of the transaction in U.S. dollars — would be crucial to prevent disputes with tax authorities.
For investors engaged in staking and mining, the unresolved question of when rewards should be taxed remains a major pain point. If rewards are taxed the moment they are credited, recipients can be hit with a bill on income they have not yet converted to cash, especially in volatile markets where the value may drop before they can sell. A deferral model, like the one earlier backed by Senator Lummis, would align taxation more closely with realized gains, but it also delays revenue collection for the government and complicates enforcement.
Another factor in this debate is fairness between asset classes. Supporters of tax reform argue that crypto should not face harsher practical burdens than foreign currency or small stock transactions when used in low‑value, everyday contexts. Critics counter that establishing carve‑outs for digital assets risks opening loopholes that can be exploited at larger scales, especially as stablecoins and tokenized instruments gain traction in institutional finance.
If Congress ultimately approves a de minimis exemption for stablecoin payments and addresses the treatment of staking and mining rewards, the U.S. could move closer to a more coherent, user‑friendly crypto tax regime. That might encourage responsible adoption, attract more legitimate businesses into the space, and reduce the tendency of entrepreneurs and investors to relocate to more permissive jurisdictions.
Until then, taxpayers remain bound by current IRS rules. People using crypto, including stablecoins, should still assume that purchases, swaps, and disposals are taxable unless and until the law explicitly states otherwise. Careful record‑keeping of transactions, cost bases, and holding periods remains essential, especially for frequent users of digital assets.
Policymakers are clearly aware that crypto is no longer a niche experiment but an integral piece of the evolving financial system. The current proposals on small stablecoin payments and staking rewards show that the debate is shifting from whether digital assets should exist to how they should be integrated into the existing legal and tax framework. How Congress resolves these questions will shape not just the future of crypto, but also the competitive landscape between banks, fintechs, and blockchain-based platforms in the years ahead.