Senator Steve Daines of Montana formally introduced the Aligning Digital Assets with Principles of Taxation Act, or ADAPT Act, on September 30, 2026, joined by Republican Senators Cynthia Lummis, Tim Scott and Bernie Moreno. The 56-page bill aims to modernize the IRS tax code by combining traditional financial principles with blockchain-specific rules.
At its core, the legislation would exempt consumers from recognizing capital gains or losses when using regulated US dollar-backed stablecoins to pay for goods and services. Qualifying transactions would also receive relief from certain broker information-reporting requirements, although professional traders and broker-dealers would be excluded.
The ADAPT Act also addresses small blockchain transaction fees. Digital assets used to pay network, transaction or gas fees of $10 or less would generally receive gain-or-loss recognition relief, removing the need to calculate tiny taxable events for routine onchain activity. For staking and mining, the bill outlines revenue sourcing rules tied to a taxpayer’s residence and hardware location, and it extends securities-lending nonrecognition treatment to qualifying digital asset lending arrangements.
However, the proposal is not only tax relief. It would extend wash-sale and constructive-sale rules to digital assets, closing a loophole that has allowed crypto investors to harvest tax losses by selling and quickly repurchasing similar assets. Eligible digital-asset dealers and traders could elect mark-to-market accounting, and certain foreign investors trading through US intermediaries would receive treatment modeled on securities and commodities safe harbors.
The bill includes technical definitions for receipt tokens, bridging assets and widely traded digital assets, applying a $500 million market capitalization threshold and liquidity standards. Most provisions would take effect after December 31, 2026, but the legislation remains proposed and requires passage by both the Senate and House before reaching the President’s desk. The Senate proposal follows separate action in the House, where the Ways and Means Committee advanced the Digital Asset Tax Certainty Act in September.
