- A new draft U.S. bill, the Digital Asset PARITY Act, proposes a major overhaul of cryptocurrency taxation, offering clarity for stablecoins and staking income.
- The draft introduces a de minimis tax exemption for stablecoin transactions under $200 and clarifies that stablecoins are not taxed for gains if their value stays within 1% of $1.
- Industry reaction is mixed, with advocates praising the push for clarity while Bitcoin proponents criticize the omission of a de minimis exemption for Bitcoin.
On Thursday, U.S. Representatives Max Miller and Steven Horsford unveiled a discussion draft for the “Digital Asset PARITY Act,” aiming to comprehensively reform the tax code for digital assets. The proposal seeks to add new provisions to the Internal Revenue Code of 1986 to clarify tax treatment.
According to the discussion draft, stablecoins would not be subject to capital gains if their price does not fluctuate by more than 1% of their $1 peg. It also states that transaction costs for acquiring or moving regulated dollar-pegged stablecoins cannot be counted toward an investor’s cost basis.
Consequently, the bill introduces a de minimis tax exemption for stablecoin transactions below $200, meaning such small transactions would not trigger reporting requirements. Meanwhile, income from lending, staking, or passive validation services would be treated as part of the recipient’s annual gross income at fair market value.
The draft has not been formally introduced to Congress but was published to spur debate among lawmakers and the crypto industry. Cody Carbone, CEO of the advocacy group Digital Chamber, said “We need digital asset tax clarity or activity will never fully onshore.”
However, the proposal has highlighted a schism within the crypto community, particularly regarding its focus on stablecoins. Bitcoin advocates noted the bill lacks a de minimis exemption for Bitcoin, similar to other pending legislation. Pierre Rochard, CEO of The Bitcoin Bond Company, argued “It’s Bitcoin that should have a de minimis tax exemption.”
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