Accounting Today reports that the recently signed GENIUS Act lays out the first formal regulatory framework for stable coins, a form of cryptocurrency pegged to the U.S. dollar or Treasuries, but leaves a lot of unanswered questions when it comes to tax. 

Under the new law, stablecoin issuers must establish redemption procedures, issue reports on reserves and outstanding coins, and submit to public accounting oversight. Large issuers will also need annual audited financials. But as Deloitte tax leader Rob Massey points out, the law doesn’t address taxation. 

For now, the IRS still treats digital assets as property. That means using stablecoins in everyday business transactions could trigger a wide range of tax implications, depending on how the asset is categorized and how it’s used. Taxpayers and practitioners have to consider issues like revenue recognition, source, and even sales tax.  

Treasury regulations issues last summer outlined rules for reporting digital asset sales under Sections 6045 and 6041, but new questions are emerging as stablecoins become more integrated into cross-border payments, payroll, and commercial contracts. 

There’s also some operational complexity. If stablecoins are used in a transaction requiring withholding, like payroll or foreign payments, the payer still needs to remit taxes in cash, even if they collected them in crypto. That adds a layer of conversion and compliance risk, especially when bank records don’t tell the full story.