Last week, the committee hosted a Legislative Hearing on digital assets and cryptocurrency to evaluate, debate, and gain a better understanding of potential legislation the Committee has proposed. Most Committee hearings either involve witnesses or markups of bills ready for final action. But, a legislative hearing is a useful tool to work through novel policy issues like potential tax policies surrounding digital assets because it allows for both topical witnesses and committee discussion on draft legislation simultaneously without a formal markup or vote. The last time the Ways & Means Committee underwent a full legislative hearing was in 2014.
Digital assets and Central Bank Digital Currencies (CBDCs) are often discussed together, but they're very distinct concepts. Digital assets are decentralized cryptocurrencies and tokens created and managed by private entities or communities, while CBDCs are government-issued digital versions of national currencies controlled by central banks. Understanding this difference is important as Congress evaluates how to regulate these technologies. The House of Representatives has already spoken loudly that it is firmly against a central bank digital currency, and I agree. And, we have passed legislation to that effect.
This issue of digital assets and cryptocurrency is not new to our office. In December of 2024, I held a tele-town hall with Perianne Boring, founder of the Digital Chamber, simply for the purposes of education and Q&A on the matter. This conversation provided valuable insight for East Texans on the role digital currency has in our communities and helped educate us on what we can expect in the years to come.
The hearing last week in Ways & Means focused on the needed role of Congress to provide tax certainty and a reliable tax structure surrounding digital assets. Common digital asset transactions, like mining and staking, do not fit clearly into existing tax law. In other places, the tax code is silent as to the treatment of digital assets. This current ambiguity creates an opening for taxpayers to exploit the law and avoid paying tax in some circumstances and creates unfair tax burdens in others. And, this ambiguity is pushing the center of financial transactions involving digital assets overseas, leaving the United States on the outside. Although the House Financial Services Committee will lead on regulatory matters involving digital assets, the responsibility for developing a sound tax structure sits with the Ways & Means Committee.
