Trump’s Crypto Tax Reform: Where Is the Path?
News Summary
News 1
On April 10, 2025, U.S. President Trump signed a congressional joint resolution overturning a regulation from the Biden administration that required decentralized finance (DeFi) protocols to report relevant information to the U.S. tax authority, the Internal Revenue Service. Under the original regulation, DeFi platforms, such as decentralized exchanges, were required to submit their total proceeds from cryptocurrency sales and provide detailed information about the participants in the transactions.
Source:
https://www.coindesk.com/policy/2025/04/07/president-trump-signs-resolution-erasing-irs-crypto-rule-targeting-defi
News 2
Eric Trump recently (January 2025) mentioned that U.S. crypto projects like XRP and HBAR will soon be exempt from capital gains tax. This means that investors in these projects will be able to spend less money when cashing out cryptocurrency for profits. However, crypto projects outside the U.S. will instead face a high capital gains tax of 30%. This move may help bring more crypto innovation to the U.S. and provide significant comparative advantages for domestic projects.
Source:
https://www.ifcreview.com/news/2025/january/us-eric-trump-announces-zero-tax-for-us-crypto-investors/
FinTax Commentary
Before 2022, Trump had been a critic of cryptocurrencies. In 2019, Trump called Bitcoin a “scam” and expressed his skepticism towards crypto assets by referring to them as “money created out of thin air.” However, Trump’s stance on cryptocurrencies underwent a complete turnaround in 2022. In December of that year, he launched an NFT themed around himself, capitalizing on the bull market and the aftermath of the NFT craze, earning millions in profits. Since then, Trump has transformed from a public critic of cryptocurrencies to an active participant. By 2024, he became the first U.S. presidential candidate to accept cryptocurrency donations and outlined a series of commitments to promote the growth of the cryptocurrency industry, playing the “crypto card” in his campaign. A few days ago, Trump signed the first U.S. cryptocurrency bill into law, formally repealing the IRS’s previous DeFi broker tax reporting rule. Initially, the crypto industry widely believed that this rule would severely impact the DeFi ecosystem and the entire crypto industry. In fact, as early as during his campaign for the current presidency, Trump promised to overhaul the regulatory framework for cryptocurrencies. Since the beginning of his term, whether through personnel changes in regulatory agencies, the gradual introduction of related regulations, or the authorization to issue $Trump, it is evident that Trump is fulfilling his campaign promises, showing a positive embrace and willingness to promote cryptocurrencies.
Currently, U.S. cryptocurrency investors are facing significant tax pressures. In the United States, short-term holdings (less than one year) of cryptocurrencies are subject to a capital gains tax of up to 37%, while mining proceeds, staking rewards, and airdrop gains are all taxed as ordinary income by the IRS. Additionally, the U.S. cryptocurrency tax system is relatively complex, requiring individuals and businesses to spend more time and resources on tax filing, resulting in high tax compliance costs. Since the beginning of 2025, rumors about Trump reducing the cryptocurrency tax rate have been circulating. As mentioned in the news, Trump’s son, Eric Trump, has publicly declared a zero capital gains tax for “domestic U.S. projects” like XRP and HBAR, while non-domestic projects will face a 30% capital gains tax. However, for months, despite public opinion and industry expectations, these rumors have not materialized. Particularly during the White House Cryptocurrency Summit on March 7, Trump did not announce large-scale reforms to the cryptocurrency tax system as expected. Even in terms of cryptocurrency regulatory policies, Trump’s actions have been seen as insufficient, merely indicating a shift in regulatory stance. Moreover, while the repeal of the DeFi broker tax reporting rule is significant for the continued development of the crypto industry, it is essentially a passive and negative measure, primarily involving tax procedures, rather than an active tax reduction policy.
Behind Trump’s “silence” lie multiple practical considerations. First, although the crypto tax reform promises have sparked short-term market euphoria, their implementation faces fundamental legal hurdles. Article I, Section 8 of the U.S. Constitution explicitly states that “the power to lay and collect taxes resides solely with Congress,” and the president does not have the authority to unilaterally adjust tax rates. Adam Cochran, a partner at Cinneamhain Ventures, sharply pointed out, “This (referring to Trump’s announcement of adjusting crypto-related tax rates) is no more effective than me declaring myself a paper cupcake.” Second, the political struggles between the Democratic and Republican parties extend from the federal to the state and local levels. Any reforms proposed by Trump must overcome numerous obstacles and interferences from the Democrats, especially on major issues like taxation, where related tax relief bills may face prolonged legislative battles. Third, at this stage, the Trump administration is primarily focused on reversing the Biden administration’s series of crackdown policies on the crypto industry, particularly by explicitly supporting congressional legislation to provide regulatory certainty for the cryptocurrency sector. This indicates that the Trump administration prefers to support the crypto industry through overarching policies (such as regulatory easing) rather than venturing into legal no-man’s lands (such as tax exemption legislation). This strategy allows Trump to avoid direct conflicts with Congress while reinforcing his crypto-friendly image through an “anti-establishment” narrative. In summary, as a politician, Trump must fulfill his campaign promises to maintain credibility and consolidate his electoral base, while also ensuring the legality and rationality of his actions to avoid unnecessary troubles. Navigating this balance is a test of Trump’s political acumen.
Trump once announced plans to make the U.S. the global hub for cryptocurrencies. Despite numerous attempts and efforts in related policies, the recent turbulence in global financial markets triggered by U.S. reciprocal tariffs has erased nearly all the gains of cryptocurrencies since Trump’s victory late last year. According to CoinGecko data, before Trump announced the suspension of reciprocal tariff measures, the total market value of cryptocurrencies fell by about 12% to $2.47 trillion, almost returning to pre-Trump victory levels. U.S. cryptocurrency investors have been eagerly awaiting a beautiful new world with zero capital gains tax, but what lies before them is a mess caused by tariff policy shocks. This cannot help but raise the question: where lies the path for Trump’s crypto tax reform?