U.S. lawmakers have unveiled a bipartisan effort to modernize the federal tax code’s treatment of digital assets, with a particular focus on stablecoins, everyday transactions, staking and mining rewards.
Representatives Max Miller (R-OH) and Steven Horsford (D-NV) released a draft of the Digital Asset PARITY Act that aims to provide clearer, more practical tax rules for regulated, dollar-pegged stablecoins and reduce unnecessary reporting burdens for routine crypto payments, ensuring that everyday transfers do not trigger capital gains reporting requirements for transactions under a specified amount.
[adinserter block="1"]The proposal also seeks to clarify how income is sourced from digital asset trading and extend established tax principles for securities lending to qualifying digital asset lending, bringing parity to virtual currencies within existing financial rules.
Additionally, the framework would allow taxpayers flexibility in recognizing income from staking and mining rewards by permitting deferral under specified conditions, addressing concerns about “phantom income” generated before assets are sold.
Says Congressman Miller,
“America’s tax code has failed to keep pace with modern financial technology. This bipartisan legislation brings clarity, parity, fairness, and common sense to the taxation of digital assets. It protects consumers making everyday purchases, ensures the rules are clear for innovators and investors, and strengthens compliance so everyone plays by the same rules.”
The lawmakers are also proposing applying wash-sale and constructive-sale rules to digital assets to prevent abusive tax sheltering strategies and modernizing charitable deduction rules for highly liquid digital assets, reflecting a broad push to align crypto taxation with traditional financial systems and reduce ambiguity in the Internal Revenue Code.
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Featured Image: Shutterstock/prodigital art/Natalia Siiatovskaia
