Momentum is building in Washington for the proposed CLARITY Act, a bipartisan crypto regulation bill that lawmakers say could bring long-awaited legal certainty to the U.S. digital asset industry. But even as Congress moves closer to defining crypto oversight, industry experts warn that complicated crypto tax rules remain one of the biggest obstacles to mainstream adoption.
Senator Bernie Moreno said he expects the legislation to be “done by the end of May,” cautioning that failure to act now could stall U.S. crypto legislation for years. Senator Cynthia Lummis echoed the urgency, saying,
“We have bipartisan support… this is our moment.”
Crypto Taxes, IRS Rules, and DeFi Compliance Emerging as Next Major Challenge
Even with clearer regulation on the horizon, Patrick Wilson, General Counsel at the Solana Policy Institute, said crypto taxation remains a major friction point for users and businesses.
“Tax and the complexities around crypto… [are] a real gating issue to folks adopting crypto at a larger scale,” Wilson said.
He noted that the current U.S. tax framework treats cryptocurrency as property, meaning even routine transactions can create taxable events. According to Wilson, that approach makes everyday crypto use unnecessarily difficult.
“The number of taxable events… from something simple is so complex… it just becomes an administrability nightmare,” he said.
Industry participants have long argued that the current system discourages practical use cases such as payments, decentralized finance (DeFi), and microtransactions because users must track gains and losses for nearly every transfer.
De Minimis Crypto Tax Exemption Gains Attention
Wilson pointed to a growing push for a de minimis tax exemption, which would remove tax reporting requirements for small crypto transactions.
“Small transactions shouldn’t turn into a big headache come tax time,” he said, adding that similar exemptions already exist in traditional finance systems.
He also suggested regulators could ease some of the burden without waiting for Congress to pass new laws.
“With the stroke of a pen… [regulators] could really ease the burden for everyday Americans,” Wilson said, referring to possible adjustments to existing IRS guidance.
DeFi and Cross-Border Crypto Transactions Complicate Global Tax Policy
As decentralized finance and international crypto usage expand, policymakers face increasing pressure to modernize tax frameworks that were designed before blockchain technology became mainstream.
Wilson said future crypto tax policy must better reflect how decentralized networks operate globally.
“Whatever tax rules are in place need to match the capability of the technology,” he said.
He also emphasized the need for fair tax sourcing rules so users are taxed based on where they reside, rather than where blockchain infrastructure or protocols operate.
Crypto Industry Says Regulatory Clarity Alone Is Not Enough
The CLARITY Act is widely viewed by the crypto industry as a major step toward establishing clearer oversight between U.S. regulators and encouraging investment in digital assets. However, Wilson said regulation alone will not drive mass adoption unless tax compliance becomes easier for ordinary users.
“If we are going to realize the full potential… people need to be comfortable using it,” he said.