U.S. Bipartisan Bill Seeks to End Taxes on Small Stablecoin Payments, Overhaul Crypto Rules

A bipartisan group in the U.S. House of Representatives has introduced a draft bill to overhaul the tax treatment of digital assets, proposing to exempt small stablecoin transactions from capital gains taxes and clarify rules for staking rewards and trading.

The Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields (PARITY) Act was unveiled on December 20 by Representatives Max Miller (R-Ohio) and Steven Horsford (D-Nev.). According to the lawmakers, the proposal aims to modernize the Internal Revenue Code, eliminating excessive taxation on everyday crypto transactions and closing loopholes that invite tax abuse.

"America’s tax code has failed to keep pace with modern financial technology," said Miller in a statement. "This bipartisan legislation brings clarity, parity, fairness, and common sense to the taxation of digital assets."

What It Means For Your Wallet

The PARITY Act introduces several key changes that would directly impact crypto users and investors:

• **$200 Stablecoin Exemption:** The bill would create a de minimis exemption for capital gains on stablecoin transactions valued under **$200**. The rule applies only to dollar-pegged tokens issued by a federally regulated entity and would take effect for tax years beginning after Dec. 31, 2025.
• **Optional Tax Deferral for Staking:** To address the "phantom income" problem, the bill allows stakers and miners to optionally defer income recognition on their rewards until the year they sell or exchange them. Currently, rewards are often taxed upon receipt, even if their value later drops.
• **Wash Sale Rules for Crypto:** The bill would apply the long-standing wash sale rule to digital assets. This prevents traders from selling crypto at a loss to claim a tax deduction and then repurchasing a substantially identical asset within 30 days.

Other provisions include a mark-to-market accounting election for active traders, rules targeting derivative-based hedging strategies, and extending tax benefits to foreign investors who trade crypto through U.S. brokers. "Today, even the smallest crypto transaction can trigger tax calculation," said Horsford. "Our discussion draft...takes a targeted approach that provides an even playing field."

The PARITY Act is a significant step toward creating a coherent federal framework for digital asset taxation in the U.S. If it passes, the regulatory clarity could lower the barrier for retail use of stablecoins and provide investment firms with the predictable tax treatment needed to expand their crypto offerings. This move could bolster the U.S.'s competitive position as a hub for digital asset innovation against other jurisdictions with clearer crypto tax laws.