Two bipartisan House lawmakers unveiled a draft Digital Asset PARITY Act that would exempt stablecoin transactions under $200 from Capital gains tax and allow for a five-year deferral of Staking rewards tax.
Representatives Max Miller (Republican – Ohio) and Steven Horsford (Democrat – Nevada), both members of the House Ways and Means Committee, have unveiled the Digital Asset PARITY Act, a bill aimed at establishing a comprehensive tax framework for digital assets. The bill would exempt Capital gains tax on transactions using regulated, dollar Peg stablecoins valued at less than $200, a provision intended to remove the compliance burden for everyday transactions.
To qualify for this incentive, a stablecoin must be issued by an authorized institution under the GENIUS Act , Peg solely to the US dollar, and maintain a price within a 1% range around $1.00 for at least 95% of trading days in the preceding 12 months. Brokers and dealers are excluded from the exemption. The draft also states that lawmakers are still evaluating whether to cap the total annual value to prevent abuse of the provision to shield investment gains.
MP Horsford stressed the importance of establishing clear rules. “Like any emerging technology, crypto assets need safety rails so that innovation can flourish, while also protecting consumers and the integrity of the tax system,” he told KOLO. “Currently, even the smallest crypto asset transaction can trigger a tax claim, while other areas of the law lack clarity and create loopholes for abuse.”
A compromise solution for Staking.
The most notable aspect of the bill is its compromise approach to when to tax Staking and mining rewards, a Chia issue among lawmakers. Under Biden administration IRS guidance, reaffirmed in October 2024, rewards are taxed as income at the time of receipt. Senator Cynthia Lummis (Republican – Wyoming), a prominent crypto asset advocate in Congress, proposed the bill in July to defer the tax until the rewards are sold.
The Miller-Horsford Bill takes a middle ground approach: taxpayers can choose to defer tax on the bonus for five years, after which the bonus will be taxed as ordinary income at fair market value. The draft describes this approach as a necessary compromise between taxing immediately upon the taxpayer gaining control and deferring the entire amount until liquidation.
The draft bill also extends some existing securities tax rules to digital assets. It would apply the virtual loss-selling rule to crypto assets, preventing investors from selling at a loss and then immediately buying back to benefit from the deduction, and would expand the constructive selling rule to prevent profit-locking strategies that delay tax obligations.
The bill also expands tax principles for securities lending to eligible digital asset loans, treating crypto lending as a tax-exempt event for highly liquid and liquidation assets. Non-Fungible Token and less liquidation assets would be excluded. The stablecoin provision is expected to take effect for tax years beginning after December 31, 2025, with Representative Miller indicating the overall bill could move forward before August 2026.
