A revised draft of the Digital Asset PARITY Act circulating in the U.S. House of Representatives proposes to exempt everyday payments made with regulated, dollar-pegged stablecoins from capital gains tax. The bipartisan proposal, led by Representatives Steven Horsford and Max Miller, aims to align the tax treatment of "Regulated Payment Stablecoins" with that of foreign currency, effectively making routine transactions with tokens like USDC and USDT tax-free for many users.
Currently, the Internal Revenue Service (IRS) classifies stablecoins as property, meaning every sale, exchange, or use—even for minor purchases—is a taxable event requiring capital gains calculation. The new draft creates a carve-out, stipulating that "sellers recognize no gain or loss" on qualifying transactions as long as the stablecoin trades within a band of $0.99 to $1.01 and meets strict issuance standards. The taxpayer's basis would be deemed to be $1 per unit, ignoring minor price fluctuations for day-to-day payments.
The proposal shifts from an earlier concept of a flat $200 de minimis limit per transaction. Instead, it focuses on whether a taxpayer's cost basis falls below 99% of the stablecoin's redemption value. To qualify, a stablecoin must be issued by an authorized entity under the proposed GENIUS Act and must maintain its peg within 1% for at least 95% of trading days over the prior 12 months.
In a related move, the bill also seeks to extend traditional wash-sale rules to digital assets like Bitcoin, closing a loophole used for tax-loss harvesting. Additionally, it provides clarity on the taxation of staking rewards, allowing taxpayers to decide when to record them—upon receipt or after a deferral period of up to five years.
The legislative push occurs amid broader debates on U.S. crypto regulation. Senator Cynthia Lummis has warned that related bills like the CLARITY Act could be stalled until 2030 without Senate action before the 2026 election cycle. A recent Council of Economic Advisors report, responding to concerns about stablecoin yields, estimated that potential impacts on bank lending would be minimal.
