U.S. lawmakers draft new bill! Striving for "stablecoin transactions not exceeding 200 dollars" to be tax-free.

The U.S. cryptocurrency tax system is expected to undergo significant adjustments. Two bipartisan congressmen recently jointly proposed a tax reform draft called the “Digital Asset PARITY Act,” seeking to establish a “tax-free safe harbor” for everyday use of stablecoin payments, and to present a compromise on “when to tax staking rewards.”

The “Digital Asset PARITY Act” was jointly introduced by Republican Congressman Max Miller of Ohio and Democratic Congressman Steven Horsford of Nevada, both of whom are members of the House Ways and Means Committee.

Stablecoin “Safe Haven”: No capital gains tax on transactions below $200

For a long time, using Crypto Assets to buy coffee and other everyday purchases in the United States has been regarded as “disposal of property,” where every tiny transaction is subject to capital gains tax, which has become the biggest obstacle for Crypto Assets to enter the payment field.

The “Digital Assets PARITY Act” thus proposes that any payment made using regulated stablecoins pegged 1:1 to the US dollar, with individual transaction amounts below $200, will be exempt from capital gains tax.

This design primarily targets “payment purposes” rather than investment activities. The draft also clearly states that the tax-free safe harbor does not apply to Bitcoin, Ethereum, and other Crypto Assets, and brokers and dealers are also not exempt.

To comply with the safe harbor provisions, stablecoins must be issued by institutions authorized under the GENIUS Act, be pegged solely to the US dollar, and maintain price fluctuations within 1% of $1 on at least 95% of trading days over the past 12 months.

The draft indicates that lawmakers are still assessing “whether to set an annual transaction volume cap” to prevent this design from being abused to evade taxation.

staking, mining rewards can be delayed for 5 years reporting

The most关注ed aspect of the “Digital Assets PARITY Act” in the market is the “taxation timing for mining and staking rewards.” This has long been one of the politically and practically controversial issues in the U.S. Crypto Assets tax policy.

According to the guidelines reiterated by the Internal Revenue Service (IRS) during the Biden administration, mining and staking rewards are considered taxable income “at the moment of receipt,” which often leads to investors having to pay substantial taxes before they actually receive their money, resulting in long-standing pushback from the industry.

In this regard, the “Digital Asset PARITY Act” proposes a compromise that allows taxpayers to delay reporting for 5 years, after which they will be taxed on general income based on the fair market value at that time.

Although a grace period is granted on the payment side, at the transaction level, the “Digital Assets PARITY Act” tends to align with traditional financial industries, reinforcing tax evasion loopholes:

1. Prohibition of “Wash Sale”: Similar to stocks, cryptocurrency investors are not allowed to use “short-term trading losses from stocks to artificially inflate costs and offset profits” for tax avoidance purposes;

2. Presumed Sale Rules: Preventing locked profits while intentionally delaying tax payments;

3. Securities lending rules extended to Crypto Assets: If it is a liquid, homogeneous digital asset, the lending itself does not constitute a taxable event.

In addition, professional traders can choose the “mark-to-market” accounting method; for crypto assets with a market value exceeding 10 billion USD, donations to charitable organizations can be exempt from qualified appraisal requirements.

The “Digital Asset PARITY Act” also specifically clarifies that the “passive, protocol-level staking” conducted by investment funds should not be regarded as a transaction or business activity, to avoid incurring additional tax burdens.

According to the draft plan, the tax-exempt safe harbor for stablecoins will apply to tax years after December 31, 2025. Max Miller expects that the overall bill has a chance of being passed by August 2026.

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Tags: Parity tax-free Crypto Assets mining payment digital assets PARITY bill consumption rewards stablecoin taxation stake