A bridge mechanism that destroys tokens on the source chain and issues corresponding tokens on the destination chain.
Because the original token is destroyed, a burn-and-mint bridge looks more like an exchange than a lock-and-mint bridge does. Most practitioners still treat a one-for-one, protocol-native bridge as a transfer of the same asset; the position should be documented.
Unsettled. The transfer position is common where the destination token is the same asset from the same issuer; a bridge that hands you a different, non-redeemable token looks like an exchange.
Source: No IRS guidance as of September 2026; IRS Notice 2014-21 (property treatment)
Last reviewed September 18, 2026. Tax rules change; confirm current law before acting.
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