cWBTC (cwbtc) 
Two U.S. lawmakers have introduced a bill to provide clarity on how cryptocurrency staking rewards are taxed. Reps. Wiley Nickel and Drew Ferguson proposed the Providing Tax Clarity for Digital Assets Act on May 1 to address the taxation of staking rewards. The bill aims to prevent double taxation by only taxing staking rewards at the time of sale.
Staking rewards are additional tokens received by cryptocurrency holders who actively participate in securing and validating a blockchain network. The taxation of these rewards has been a point of confusion for many investors, unsure whether they should be taxed upon receipt or sale. The new bill defines staking rewards as created property under the U.S. tax code.
The proposed law is a response to a ruling by the Internal Revenue Service that requires crypto investors earning staking rewards to include the value of those rewards in their gross income when filing taxes. The bill has received positive feedback from the community, with many supporting the idea of taxing block rewards only at the time of sale.
Taha Abbasi, CTO at Ferrum Network, praised the bill for providing clarity in tax legislation for digital assets, while Sheila Warren, CEO of the Crypto Council for Innovation, described it as “right on point” and offering much-needed clarity. Both Rep. Nickel and Rep. Ferguson have been advocates for clear regulatory frameworks for digital assets.
The bill comes on the heels of the recent Bitcoin halving event, which reduced mining rewards. This legislation aims to establish clear guidelines for the taxation of staking rewards, further solidifying the U.S. as a leader in digital asset innovation and regulation.
