Bipartisan members of the U.S. House Ways and Means Committee, Representatives Max Miller (R-Ohio) and Steven Horsford (D-Nev.), have unveiled a draft legislative framework, the Digital Asset PARITY Act, aimed at reforming the taxation of digital assets. The proposal introduces a safe harbor for small stablecoin transactions and a compromise on the taxation of staking rewards, marking a significant step toward regulatory clarity.
The draft legislation includes a provision to exempt transactions involving regulated, dollar-pegged stablecoins worth less than $200 from capital gains taxes. This "de minimis" exemption is designed to eliminate compliance burdens for everyday purchases using stablecoins. To qualify, stablecoins must be issued by a permitted entity under the GENIUS Act, be solely pegged to the U.S. dollar, and have maintained a price within 1% of $1.00 for at least 95% of trading days in the prior 12 months. The safe harbor explicitly does not extend to other cryptocurrencies like Bitcoin or Ethereum.
On the contentious issue of taxing staking and mining rewards, the bill proposes a five-year deferral option. Taxpayers could elect to defer tax on rewards until five years after receipt, at which point they would be taxed as ordinary income at fair market value. This represents a middle ground between the current IRS guidance—which taxes rewards as income when received—and proposals for full deferral until the assets are sold.
The framework also seeks to close loopholes by extending existing securities tax rules to digital assets. This includes applying wash sale rules to prevent artificial tax losses and constructive sale rules to curb gain-deferral strategies. It would extend securities-lending tax principles to qualifying digital asset loans and allow professional traders to use mark-to-market accounting.
Rep. Horsford emphasized the need for guardrails, stating, "Like any emerging technology, cryptocurrencies need guardrails that allow innovation to grow while protecting consumers and the integrity of our tax system." The stablecoin provisions are slated to take effect for taxable years beginning after December 31, 2025, with Rep. Miller expressing hope that the broader bill could advance before August 2026.
