Coinbase and its top executives have consistently sought clarification from U.S. watchdogs on the use of crypto. In a new move, the exchange is ramping up pressure on U.S. investors to revamp how digital assets are taxed. They argue that the current rules are stuck in a pre-crypto era, hindering adoption.
Faryar Shirzad, CPO of Coinbase, believes that a fundamental mismatch could be a blocker here. The US tax code was designed for “20th century money,” while crypto works in an entirely different way. However, treating crypto solely as “property” means that even the smallest transactions can trigger tax liabilities. This will lead to a system where daily use is a compliance headache.
Coinbase sees 34% increase in tax queries
Shirzad mentioned that under current rules, something as simple as paying gas fees or using a stablecoin for a routine transaction is technically a taxable event. He added that users are supposed to calculate cost basis, track gains or losses and report them. This happens even when the amounts involved are negligible.
He noted that crypto’s ability to move seamlessly between wallets and platforms makes this even more difficult. This often leaves gaps in reporting that the brokers themselves cannot fully fill.
According to a report, Coinbase saw a 34% increase in customer service inquiries. All were related to tax reporting compared to the same period last year. At the same time, the introduction of new reporting needs is generating what the company describes as paperwork overload.
He added that millions of 1099-DA forms will be issued for tax year 2025. However, many of them are related to extremely small transactions. A large portion of these forms are for income under $600, and hundreds of thousands even track activities under $1.
The volume of risks reported has the opposite effect. This does not improve clarity between users and buries meaningful information under huge amounts of data. Cost base tracking is another structural issue among users. The exchange estimates that more than 63% of users have gaps in their records. This is solely due to the movement of cryptocurrencies between wallets and exchanges. Due to this, taxpayers overpay or are forced to reconcile transactions manually, and that too with limited assistance.
A de minimis exemption for small transactions could work here. Similar limits already exist in other parts of the tax code. It can be applied to cryptocurrencies to eliminate the need to report minor payments.
Euro stablecoin holders climb to 1 million
The report highlights that the GENIUS Act has already established a clearer framework for stablecoins and the market. Meanwhile, the Internal Revenue Code remains largely unchanged for cryptos. The cumulative digital asset market hovers around the $2.4 trillion mark. A recent sell-off has pushed Bitcoin to trade below the $70,000 level.
Tax rules are expected to push users and innovation overseas. The company presented the problem not only as a compliance challenge, but also as a competitiveness challenge. He warns the United States against losing ground in a sector it is trying to dominate.
Data shared by Dune shows that the supply of euro-pegged stablecoins increased from $203 million in January 2023 to $912 million in February 2026. Holders increased from 13,000 to over a million during this period. The circle $EURC is at the top of this ranking with 500 million dollars. However, there are 13 Euro-pegged stablecoins on the market. This includes EURS, EURe, $EURI, $EURCVand more.
Euro stablecoins: $203 million → $912 million offering. 13,000 → 1 million holders.@circle $EURC leads to $500 million, but there are 13 euro-pegged stablecoins in the ecosystem – EURS, EURe, $EURI, $EURCVand more.
Post-MiCA, the euro stablecoin market is developing and fragmenting into specialized… pic.twitter.com/IBzxDSkyzI
— Dunes | We are recruiting! (@Dune) March 26, 2026
Post-MiCA regulatory clarity has pushed this supply to a 4.5x increase and holder growth 80x. Euro stablecoins now represent over 80% of the non-US dollar stablecoin supply in the region. The cumulative stablecoin market holds a cap of over $319 billion. Tether’s USDT leads the industry with a market capitalization of over $184 billion.
Beyond politics, Coinbase has entered traditional finance with crypto. The company recently partnered with Better Home & Finance to allow home buyers to use digital assets such as Bitcoin and USDC as collateral for down payments.
Despite this major announcement, the price of COIN fell by more than 4% during the last session. It has seen a drop of almost 45% in the last 6 months. COIN traded at $173.38 last session.
