Zcash PGPZ Registers to Lobby on CLARITY Act and Crypto Tax Bills

Zcash PGPZ Registers to Lobby on CLARITY Act and Crypto Tax Bills

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Zcash is stepping deeper into U.S. crypto policy as Pretty Good Policy for Zcash (PGPZ) begins formal lobbying on the CLARITY Act and major digital-asset tax proposals. The move puts Zcash’s financial privacy, developer protections and regulatory treatment into sharper focus as Congress continues debating how crypto should be governed and taxed.

What PGPZ’s Federal Lobbying Registration Reveals About Zcash’s Washington Strategy

Pretty Good Policy for Zcash (PGPZ) has taken a more formal role in U.S. crypto policy after registering for federal lobbying effective October 1, 2026. Executive director Divij Pandya is listed as the registered lobbyist, while the filing identifies Zcash ecosystem development, developer protections and financial privacy as key priorities. It also names the Digital Asset Market Clarity Act, the Digital Asset Tax Certainty Act and the proposed ADAPT Act among PGPZ’s current or anticipated lobbying issues. The registration does not mean PGPZ supports every provision in those bills; rather, it shows that the group plans to engage directly with lawmakers on crypto regulation, taxation, noncustodial software and privacy-focused blockchain policy. For Zcash, that gives the ecosystem a more direct role in Washington discussions that could shape how privacy tools, developers and digital-asset users are treated under U.S. law.

PGPZ Is Building a Dedicated Washington Policy Operation for Zcash

PGPZ’s federal registration follows a broader effort to create a permanent policy function for the Zcash ecosystem. In its August 21, 2026 application to Zcash Community Grants, the organization argued that Zcash lacked a group focused specifically on representing its policy interests before lawmakers and regulators. Its proposed work includes maintaining relationships with congressional offices, explaining privacy-preserving blockchain technology to policymakers, monitoring legislation and regulatory proposals, and developing positions with input from people working across the Zcash ecosystem. The initial U.S. focus includes committees and agencies dealing with digital assets, financial services, taxation, sanctions, national security and commerce, giving the group a wider remit than a conventional token-focused advocacy campaign.
 
That strategy is supported by a $750,000 grant covering 12 months, approved by Zcash Community Grants on August 31. The full amount should not be described as direct lobbying expenditure because the budget covers substantially more than congressional advocacy. PGPZ allocated about $400,000 for operations, compensation and professional services and $120,000 for legal, lobbying, tax, accounting and compliance work, with additional funding set aside for government-affairs tools, research, communications, policy events, travel and congressional fly-ins. The structure suggests PGPZ is trying to build an ongoing Washington operation capable of following legislation from early policy discussions through committee work, amendments and regulatory implementation, rather than responding only when a major crypto bill reaches a final vote.

Zcash’s Policy Push Focuses on Privacy and Developer Protections, Not the ZEC Price

PGPZ has also been explicit about what its Washington strategy is not designed to do. Its grant materials state that the group will not advocate for the market price of ZEC or act primarily on behalf of one company’s commercial interests. Instead, its stated priorities include financial privacy, digital-asset market structure, taxation, sanctions policy, illicit-finance rules and protections for developers and infrastructure providers. That distinction matters because Zcash policy questions often extend beyond the token itself. Rules affecting privacy software, noncustodial development or transaction disclosure could influence how the underlying technology is built and used even without directly regulating ZEC trading.
 
Financial privacy is particularly central to that agenda. Zcash supports shielded transactions that can protect information such as transaction participants and amounts, while its technology can also support selective disclosure through tools such as viewing keys. Those features create policy questions that do not always fit neatly into frameworks developed around transparent blockchains or centralized financial intermediaries. PGPZ’s role is therefore likely to involve explaining how privacy-preserving technology works, where compliance controls can exist, and how laws aimed at exchanges or custodians might affect developers who do not hold customer assets. This gives the organization a more specialized policy mandate than broad crypto lobbying groups that represent exchanges, stablecoin issuers or multiple blockchain sectors at once.
 
The registration also comes as PGPZ expands its direct engagement in Washington. In a September update, the organization said it was preparing an October 14 Washington fly-in and Cypherpunk Policy Dinner, alongside community policy discussions and regular updates on federal developments. These activities suggest that the October filing is the beginning of a longer advocacy program rather than a one-off response to a single bill. The next important evidence will come from PGPZ’s meetings, public policy positions and future lobbying disclosures, which could provide a clearer picture of what changes it is seeking as Congress debates the CLARITY Act and competing approaches to digital-asset taxation.

Why the CLARITY Act Matters for Zcash, Privacy Tools and Crypto Developers

The Digital Asset Market Clarity Act, H.R. 3633, matters to Zcash because it goes beyond deciding whether particular crypto assets fall under SEC or CFTC oversight. The legislation also addresses how U.S. law treats self-custody, non-controlling blockchain developers and infrastructure providers, issues that are especially relevant to privacy-focused networks where software can be published without a developer controlling users’ assets or transactions. The CLARITY Act is designed to establish a federal market-structure framework for digital commodities while defining regulatory responsibilities between the Securities and Exchange Commission and Commodity Futures Trading Commission. For Zcash, the most important questions are therefore not limited to ZEC’s regulatory classification. They also include whether developers of privacy tools can write and maintain noncustodial software without automatically being treated as financial intermediaries, and how future rules balance financial privacy with sanctions, anti-money-laundering and illicit-finance requirements.

Developer and Self-Custody Protections Could Be Particularly Relevant to Zcash

Developer protections are one of the clearest reasons the CLARITY Act has attracted attention from organizations focused on open-source crypto software. Legislative text considered by Congress states that certain non-controlling blockchain developers should not be treated as money transmitters solely because they publish blockchain software, provide tools that allow customers to hold their own digital assets, or supply infrastructure supporting a blockchain service. That distinction could be especially important for Zcash because privacy functionality can exist at the protocol or software level without a developer taking custody of a user’s funds. Clearer separation between building software and operating a regulated financial intermediary could reduce legal uncertainty for developers working on wallets, privacy-preserving applications and self-custody infrastructure, although such protections would not remove obligations under other applicable laws involving fraud, sanctions or unlawful conduct.

The CLARITY Act Is Still Unresolved After the September Senate Vote

The bill has moved through several significant stages without becoming law. The Senate Banking Committee advanced H.R. 3633 by a 15–9 vote on May 14, 2026, after negotiations covering market structure, consumer safeguards, illicit-finance controls and protections for developers. On September 15, 2026, however, the full Senate voted 49–50 against invoking cloture on the motion to proceed to the CLARITY Act. Because cloture required three-fifths support, the measure could not advance at that stage. The result was procedural rather than a final vote rejecting the legislation itself, making it inaccurate to describe the CLARITY Act as permanently defeated. Its unresolved status means questions around SEC and CFTC authority, noncustodial development and decentralized infrastructure remain open to further congressional action.
 
Privacy provisions are among the areas where those debates become especially sensitive. Supporters of stronger developer protections argue that someone who merely writes or maintains software should be distinguished from a financial business that takes custody of customer funds, while critics have raised concerns that broad protections for decentralized software could complicate enforcement against illicit finance involving certain privacy-enhancing technologies. For Zcash, the issue comes down to how precisely legislation defines responsibility. Privacy technology is not automatically synonymous with illegal activity, but policymakers still need to determine when regulatory obligations apply and which participants actually have control over transactions or customer assets. The eventual treatment of developers, self-custody and decentralized privacy tools could therefore matter to the Zcash ecosystem just as much as the CLARITY Act’s more widely discussed division of authority between the SEC and CFTC.

How the Digital Asset Tax Certainty Act and ADAPT Act Could Affect Crypto Tax Rules

The two tax measures named in PGPZ’s lobbying disclosure address a different problem from the CLARITY Act: how digital assets are treated under the U.S. tax code. The House’s Digital Asset Tax Certainty Act, H.R. 10357, and the Senate’s Aligning Digital Assets with Principles of Taxation Act, or ADAPT Act, both seek to replace uncertain applications of older tax rules with provisions written more specifically for digital assets. Their scope includes everyday crypto transactions, staking and digital-asset lending, blockchain network fees, reporting requirements and rules traditionally associated with securities transactions. Neither proposal has become law, but together they show how lawmakers are considering a more tailored federal tax framework for digital assets.

Digital Asset Tax Certainty Act Targets Reporting, Staking and Crypto Tax Treatment

Introduced on September 14, 2026, H.R. 10357 would amend the Internal Revenue Code to create clearer rules across several areas of digital-asset taxation. The House Ways and Means Committee approved an amended version 38–5 on September 16, sending it forward for further House consideration. The legislation would address the tax treatment of mining and staking, allow qualifying digital-asset dealers and traders to use mark-to-market accounting, and provide certain digital-asset charitable contributions with treatment closer to publicly traded securities. It would also extend anti-abuse provisions such as wash-sale and constructive-sale rules to digital assets while directing the Treasury to establish a voluntary disclosure program for taxpayers dealing with past crypto-reporting uncertainty. For Zcash users and the wider crypto market, the significance is not a special ZEC provision but a potential move toward clearer federal rules governing how digital assets are earned, transferred, reported and taxed.

ADAPT Act Focuses on Stablecoin Payments, Network Fees and Onchain Activity

The ADAPT Act, introduced on September 30, 2026, takes a somewhat different approach by focusing on transactions that are common on blockchain networks but can create disproportionate tax-reporting burdens under existing rules. The proposal would generally prevent gain-or-loss recognition when qualifying regulated dollar-pegged stablecoins are used to purchase goods and services, while introducing a separate exception for qualifying digital assets used to pay network or transaction fees of $10 or less. It also addresses staking and digital-asset lending and would extend traditional wash-sale and constructive-sale restrictions to crypto assets. The network-fee provision is especially relevant to ordinary blockchain use because paying a transaction fee with crypto can constitute a disposal for tax purposes. If enacted, the proposal could reduce recordkeeping for very small onchain transactions without removing tax obligations from larger investment or trading activity.

The House and Senate Bills Point Toward a Broader Crypto Tax Rewrite

Although the Digital Asset Tax Certainty Act and ADAPT Act are separate proposals, they overlap across several areas, including staking, digital-asset lending, wash-sale treatment and efforts to make crypto tax reporting more practical. The House proposal has already cleared the Ways and Means Committee, while the ADAPT Act represents a later Senate approach, meaning the final federal tax framework could change significantly as Congress negotiates different provisions. For PGPZ, these proposals matter because taxation can shape how users interact with blockchain networks even when a law does not specifically mention privacy coins. Rules governing transaction fees, staking rewards, digital-asset transfers and reporting obligations can influence the day-to-day usability of networks such as Zcash. For now, both remain legislative proposals, so taxpayers should not treat their proposed exemptions or revised tax treatments as current federal law.

Zcash Policy Push Puts Financial Privacy and Developer Protections in Focus

Zcash’s growing policy presence in Washington brings two issues into sharper focus: financial privacy and legal protections for developers who build noncustodial blockchain software. PGPZ argues that crypto policy can become distorted when lawmakers treat software developers, custodians, infrastructure providers and end users as though they perform the same function. Its stated objective is to give policymakers a more technical understanding of privacy-preserving networks before new obligations are applied to them. For Zcash, that distinction matters because privacy can be implemented at the protocol and software level rather than being provided exclusively by a centralized intermediary that has control over user funds.

Financial Privacy Does Not Mean Hiding Every Transaction From Accountability

Zcash’s privacy model is more nuanced than the simple label “privacy coin” can suggest. Transactions involving shielded addresses can protect information such as the sender, recipient and transaction amount from public blockchain observers, while Zcash also supports mechanisms for selective disclosure. Viewing-key functionality can allow an authorized third party to inspect relevant transaction information without receiving the ability to spend the underlying funds. That distinction is potentially important in regulatory discussions because it shows that privacy and lawful disclosure do not necessarily have to be treated as mutually exclusive concepts. A system can protect information from universal public visibility while still allowing users to disclose records in circumstances where auditing, accounting or compliance requires them.
 
PGPZ has identified recognition of viewing keys and selective-disclosure mechanisms as part of its longer-term policy agenda. Its position is that regulation should distinguish legitimate financial privacy from illicit conduct rather than assuming privacy-preserving technology exists primarily to evade oversight. That does not remove concerns involving sanctions, money laundering or criminal activity, but it changes the practical policy question. Instead of debating whether financial privacy should exist at all, lawmakers can examine when disclosure is justified, who is capable of providing the relevant information and whether compliance requirements are technically realistic for the participants who actually control transactions or customer assets.

Developer Protections Could Shape How Privacy Software Is Built in the U.S.

Developer liability is the other major issue behind PGPZ’s policy work. Open-source developers may write wallet software, maintain protocol code or provide blockchain infrastructure without taking custody of customer assets, yet broadly written financial rules can create uncertainty over whether those developers should be regulated like custodial intermediaries. PGPZ specifically lists protections for noncustodial developers and infrastructure providers among the policy outcomes it wants to pursue. Its policy materials also argue that regulation should distinguish independent researchers, software developers, custodial businesses and other participants according to the functions they actually perform instead of imposing the same responsibilities across an entire decentralized ecosystem.
 
That issue is particularly relevant to Zcash because privacy-preserving functionality depends on developers being able to research, maintain and improve cryptographic software without automatically assuming the legal responsibilities of an exchange or financial institution. PGPZ’s policy activity has already included work on developer protections under the CLARITY Act and engagement around broader U.S. crypto regulation, showing that the developer-versus-intermediary distinction extends beyond a single bill. The larger policy question is likely to remain important even as individual legislative proposals change: whether U.S. regulation can address illicit finance, sanctions and consumer protection while preserving room for developers to build noncustodial and privacy-preserving tools whose users retain control of their own assets.

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Conclusion

PGPZ’s federal lobbying registration gives Zcash a more direct role in U.S. crypto policy as lawmakers continue debating market structure, taxation, self-custody, developer protections and financial privacy. The CLARITY Act could affect how noncustodial developers and digital-asset infrastructure are treated, while the Digital Asset Tax Certainty Act and ADAPT Act could change rules around staking, network fees, reporting and other crypto activity if enacted. For Zcash, the key issue is whether future regulation can distinguish privacy-preserving technology from the businesses or individuals that use it. PGPZ’s focus on selective disclosure, viewing keys and protections for developers who do not control customer assets reflects that concern, but its exact legislative goals are still not fully known. Future congressional action, regulatory proposals and lobbying disclosures should provide a clearer picture of how Zcash’s Washington strategy develops.

FAQs

What is a Pretty Good Policy for Zcash (PGPZ)?

PGPZ is an independent policy and advocacy organization focused on issues affecting the Zcash ecosystem. Its work covers federal legislation, regulatory policy, developer protections, financial privacy and other areas where U.S. rules could affect privacy-preserving blockchain technology.

Is PGPZ part of the Zcash Foundation?

PGPZ operates as a separate policy organization rather than as a department of the Zcash Foundation. It has received funding through Zcash Community Grants, but its stated mission is to conduct advocacy and policy work for the broader Zcash ecosystem.

Does PGPZ lobby to increase the price of ZEC?

No. PGPZ has stated that its advocacy is not intended to promote the market price of ZEC or advance one company’s commercial interests. Its policy program instead focuses on issues including privacy, digital-asset regulation, taxation and developer protections.

Did the U.S. Senate reject the CLARITY Act?

Not in a final vote on the legislation itself. On September 15, 2026, the Senate voted 49–50 against invoking cloture on the motion to proceed to H.R. 3633. That prevented the bill from advancing at that stage but did not amount to final legislative rejection of the CLARITY Act.

Has the Digital Asset Tax Certainty Act become law?

No. The Digital Asset Tax Certainty Act remains proposed federal legislation. The House Ways and Means Committee advanced H.R. 10357 in September 2026, but committee approval alone does not make its proposed crypto tax provisions effective law.

Why can small blockchain network fees create tax issues?

Using cryptocurrency to pay a blockchain network fee can involve disposing of part of a digital asset, potentially creating a taxable event that must be recorded. Proposals such as the ADAPT Act seek to reduce that burden for certain small network-fee payments, although the proposed exemption is not current law.
 
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Crypto assets can be highly volatile, and market conditions, token liquidity and project developments may change rapidly. Readers should conduct their own research and assess their risk tolerance before making financial decisions.