Crypto Staking Tax Policy in the Spotlight: Final Step of the Republican Congress Before 2026

As Easy as Saying

• A letter of request from 19 Republican lawmakers aims to slow down the IRS policy on staking rewards
• The proposed change focuses on reducing the tax burden for participants in proof-of-stake networks
• Critical date: Only 12 days left to implement reforms before the 2024 tax year

The Strategy of Lawmakers to Avoid Permanent Tax Rules

The cryptocurrency industry is gaining significant support from the Republican faction in Congress seeking to change the previous IRS policy. In a letter sent to Treasury Secretary Scott Bessent, 19 Republican representatives have worked to slow down the 2023 guidance that imposes tax obligations on all staking rewards received by users.

The group’s main argument centers on the need to regulate new capital assets. Instead of treating rewards as taxable income upon receipt, supporters propose that they should only be taxed when users actually sell their acquired tokens.

The Staking Market and the Role of Blockchain Technology

The proof-of-stake mechanism has become a key part of modern blockchain infrastructure, particularly in cryptocurrency networks like Ethereum. In this system, network participants stake their tokens to ensure the security and functional integrity of the decentralized ledger. As a reward, participants continuously receive additional tokens over time.

This model has become especially attractive to institutional investors seeking passive income strategies from their large holdings. Recently, the Treasury Department provided regulatory clearance for Wall Street products offering staking rewards, signaling a growing demand for such investment vehicles.

The Professional Validation and the Timing of Action

According to the letter of request, regulatory burdens and potential over-taxation are actually constraining individual investors’ participation. The response from Republican leaders is to address this concern through swift administrative action.

Although the Trump administration showed willingness to change tax guidance regarding staking—an action that could be taken without congressional approval—this offer has not yet been realized. The timing is limited: only 12 days remain to implement the change before the 2026 tax rules become permanent.

The Larger Legislative Ambition

This current effort is part of a broader goal in the House to develop comprehensive crypto tax legislation in the first half of next year. Industry members believe that overturning the current staking guidance will provide greater flexibility in the legislative drafting process and pave the way toward a clearer tax framework.

From the advocates’ perspective, the change in the letter of request could give lawmakers greater leverage in drafting more appropriate laws that address the needs of the blockchain economy.