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#USCryptoStakingTaxReview " data-hashtag="#USCryptoStakingTaxReview" class="tag">#USCryptoStakingTaxReview — U.S. Crypto Staking Tax Rules Under Fire (Dec 2025 Update)

A bipartisan group of 18 U.S. House lawmakers led by Rep. Mike Carey has formally urged the Internal Revenue Service (IRS) to review and revise how cryptocurrency staking rewards are taxed before the start of 2026.
The lawmakers argue that the current tax treatment causes “double taxation” — taxing staking rewards when received and then again when sold — and discourages broader participation in proof-of-stake networks.

Current IRS Tax Rules (2025)
➡️ Under Revenue Ruling 2023-14, the IRS treats crypto staking rewards as taxable ordinary income at the time you gain “dominion and control” of the tokens — even if you don’t sell them.
➡️ Later, when you eventually sell or trade those rewards, that triggers a capital gains (or loss) event, meaning taxation twice on the same set of rewards.
This has frustrated many U.S. stakers — especially when token prices fall after receipt — because they may pay tax on income they never actually realized in fiat.

What the Congressional Push Seeks
Lawmakers are now asking for modernized guidance that would:
✅ Tax staking rewards only at the point of sale/disposition, not on receipt.
➡️ This aims to align taxation with actual economic gain instead of phantom income.
✅ Clarify tax treatment before 2026, so stakers can plan without fear of unfair tax outcomes.
✅ Provide clearer rules for proof-of-stake participation — important as these networks underpin much of crypto’s security and yield-earning opportunities.

Ongoing Regulatory Moves
📌The IRS also issued Revenue Procedure 2025-31, creating a safe harbor for trusts that stake digital assets without jeopardizing trust tax status — a key development for institutional staking adoption.
📌In addition to staking guidance reform, lawmakers have discussed broader crypto tax measures — including stablecoin tax exemptions for small payments and deferring staking/mining income recognition for up to five years — under draft bills like the Digital Asset PARITY Act.

📌 Why It Matters to Crypto Investors
🔹 Fairer tax timing: If tax is only due when stakers sell, it reflects real economic gains.
🔹 Reduced compliance burden: The current requirement to track the fair market value of every reward on receipt can be onerous.
🔹 More participation: Easier, more predictable tax treatment could strengthen U.S. staking participation and blockchain security.
🔹 Institutional entry: Clear guidance for trusts and ETPs boosts institutional comfort with staking assets.

(2025 Snapshot):
➡️ Today, staking rewards are taxed as income at receipt followed by capital gains on sale.
➡️ Polls and industry voices argue this is unfair and harmful to the U.S. crypto ecosystem.
➡️ Bipartisan reform efforts are gaining traction with the express goal of ending double taxation and aligning rules with economic reality.
#USCryptoStakingTaxReview " data-hashtag="#USCryptoStakingTaxReview" class="tag">#USCryptoStakingTaxReview #WriteToEarnUpgrade #Market_Update #LearnWithFatima $BTC $ETH $BNB

Series 7 I’ve spent the last few years watching protocols come and go, and if there is one thing that separates a long-term winner from a flash in the pan, it is how they handle the boring stuff: governance, emissions, and utility. We’ve all seen the charts of tokens that pump 500% on hype only to bleed out because they didn't have a real reason to exist beyond speculation. Right now, in late December 2025, the conversation around Lorenzo Protocol is hitting a fever pitch, but not just because of its recent Binance listing or its 24-hour volume spikes. It’s trending because people are starting to realize it is trying to solve the "liquidity trap" for Bitcoin stakers.

Series8 The BANK token isn't just a ticker symbol for traders to flip. Its utility goes much deeper than just holding it and hoping for a green candle. In the Lorenzo ecosystem, the token acts as a bridge between the users and the protocol’s actual revenue. By staking BANK to receive veBANK, you aren't just locking up capital; you’re stepping into a role that influences how the protocol develops. This creates a rare alignment of incentives. When you hold veBANK, you can vote on fee structures and decide which strategic partners get integrated. It turns the typical passive investor into someone with a vested interest in the protocol’s efficiency.
Series 9One of the most impressive parts of the model is how they’ve handled emissions. We’ve lived through the era of "farm and dump" tokenomics, but Lorenzo seems to have taken those lessons to heart. Their emission model is built around value-creating behaviors rather than just mindless liquidity provision. For example, their reward distribution is tied to specific tasks that optimize the ecosystem, such as contributing to TVL or participating in their testnet campaigns. By December 2025, we’ve seen the circulating supply stabilize around 526 million tokens, with a clear deflationary mechanism in place. If you hold a certain amount of BANK, you can even earn dividends in USDT, and the trade-and-burn mechanism helps keep the total supply of 2.1 billion from becoming a drag on the price.
Speaking of governance, the big question is always whether it is actually distributed or just a centralized team pulling the strings. In Lorenzo’s case, the transition to a ve-model (vote-escrowed) has significantly decentralized decision-making. Decisions aren’t just made behind closed doors; they are debated by the community. You can see this in how they’ve handled recent smart contract upgrades and the integration of their USD1 stablecoin. The roadmap delivery has been surprisingly transparent, with CertiK audits being made public—like the one on November 6, 2025, where they scored a 91.36. This kind of transparency builds the trust necessary for a protocol to scale.

Series 10Can this governance model actually hold up as the protocol grows? It’s a valid concern. As more institutional players enter the space, the "whale" problem in voting becomes real. However, Lorenzo’s tiered reward structure and the way they reward early, active contributors helps mitigate some of that. They are rewarding the "skill" of the community, not just the size of the wallet. This is crucial for keeping the developers and smaller investors engaged, which is the lifeblood of any DeFi project.

Looking at the broader picture of growth and sustainability, Lorenzo has a very specific niche. They are effectively the liquidity layer for Bitcoin. By separating BTC into stBTC (the principal) and YAT (the yield), they’ve brought the "Pendle model" to the largest asset in crypto. This is why they’ve managed to stay relevant through the volatility of 2025. Whether we are in a ripping bull market or a grinding bear, people always want yield on their Bitcoin. In a bull market, the YAT tokens become highly speculative and valuable for those chasing high returns. In a bear market, the focus shifts to the stability of stBTC and the underlying security of the Babylon-backed staking.

The strategy for 2026 seems to be focused on real-world asset (RWA) integration. Their partnership with BlockStreet to scale the USD1 stablecoin for B2B payments is a massive step toward "boredom-proof" sustainability. It moves the protocol away from being purely "crypto-native" and into the realm of traditional finance settlements. As an investor, that’s what I look for: can this project survive if the retail hype disappears tomorrow? By building infrastructure that institutions actually want to use for yield and payments, Lorenzo is positioning itself to be a permanent fixture.
Ultimately, the progress made this year shows that the team isn't just chasing short-term price action. While the BANK token has seen its fair share of volatility—surging 90% before a 46% correction in November—the underlying metrics of TVL and community participation are trending in the right direction. It’s a protocol built for traders who understand that the best returns often come from the projects that focus on the plumbing of the financial system, not just the flashy interface. As we look toward the next year, the success of Lorenzo will depend on whether it can continue to prove its utility as the primary interest rate market for the Bitcoin ecosystem.
#lorenzoprotocol $BANK
@Lorenzo Protocol