VISI.NEWS | BANDUNG – A working group on digital assets, under the direction of President Donald Trump, has released a long-awaited report outlining policy recommendations for the U.S. cryptocurrency sector. The document offers comprehensive assessments on taxation, regulation, and stablecoin frameworks.
In a move that surprised many observers, the report emphasizes the need to close certain tax loopholes — a notable departure from Trump’s historically hands-off regulatory stance. Yet, the document also supports regulatory leniency in some areas, such as the expansion of safe harbor provisions for crypto market participants.
One of the central themes of the report is crypto taxation. It proposes clearer guidance from the Treasury Department and the Internal Revenue Service (IRS) regarding how unrealized gains and losses — particularly those outside traditional stock holdings, should be treated under Adjusted Financial Statement Income (AFSI) calculations.
Most notably, the group recommends eliminating the so-called “wash sale” loophole for digital assets. This practice, already banned in traditional stock trading, allows investors to claim tax-deductible losses while immediately repurchasing the same asset. Currently, wash sales involving crypto remain legally ambiguous in the U.S. tax code.
The report also advocates for adopting mark-to-market accounting for crypto holdings, which would tax assets based on their current market value rather than the original purchase price. This approach could benefit long-term holders during market downturns but may also lead to greater tax burdens in bullish cycles.
Stablecoins and staking practices were also addressed. The report suggests that stablecoins might be better classified as debt instruments rather than commodities or securities, potentially altering their tax treatment. Furthermore, it discourages simplified tax reporting for staking rewards, signaling a shift toward more rigorous compliance.
Although the recommendations carry no binding authority, they represent the most detailed federal tax framework for the digital asset sector to date. If adopted, they could reshape tax obligations for retail traders, institutional investors, and crypto issuers alike.
Interestingly, the report tempers its stricter proposals by advocating the expansion of safe harbor protections, an effort to maintain innovation while promoting regulatory clarity.
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