Crypto27 March, 20263 min read
PARITY Act Draft Treats Stablecoin Transfers Under $200 As Tax-Free
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Miller and Horsford unveiled a bipartisan draft, the Digital Asset PARITY Act. The act would exempt stablecoin gains and losses under $200 from capital gains tax.
New stablecoin tax exemption
The single most important new development in the PARITY Act draft is a de minimis exemption for tiny stablecoin gains, effectively treating everyday stablecoin use as tax-free for transfers under $200, while tightly limiting which tokens qualify. The draft is aimed at overhauling how digital assets are taxed and would clarify the tax treatment of these assets, with stablecoins specifically exempt from gains if price movement stays within 1% of the peg or $0.01. It is described as a discussion draft, not yet introduced in Congress, signaling the language is open to debate and refinement.
“The Digital Asset PARITY Act seeks to overhaul the Internal Revenue Code of 1986 by adding provisions that would clarify the tax treatment of digital assets.”
Bitcoin is not included in the exemption, a point that has fueled criticism from BTC advocates and proponents of technologial neutrality. This set of provisions marks a major shift toward treating stablecoins like cash for micro-payments, rather than applying the same tax rules to all digital assets from day one.
Stablecoin eligibility criteria
The draft’s eligibility rules tighten the scope to ‘regulated payment stablecoins’ with explicit issuer and peg criteria. The tokens must be issued by a GENIUS Act permitted issuer, pegged solely to the U.S. dollar, and have held a price within 1% of $1.00 for at least 95% of trading days in the prior 12 months. The costs of acquiring or moving such stablecoins cannot be counted toward an investor’s cost basis, preventing artificial inflation of gains when the asset is sold.
A de minimis threshold exists for small transactions, but the annual cap has not yet been determined. Bitcoin and Ethereum are explicitly excluded from the exemption.
Beyond the stablecoin exemption
Beyond the stablecoin de minimis provision, the PARITY draft advances more controversial tax mechanics: it would keep stablecoin gains out of the calculation for small transfers but would impose a wash-sale approach to digital assets and introduce a five-year deferral framework for staking and mining rewards, along with mark-to-market election options for traders. Cointelegraph highlights that current law taxes staking income at receipt, while the draft envisions a deferral framework, signaling a potential shift in timing rather than recognition of phantom income benefits for all holders. The proposal’s wash-sale concept would apply to digital assets, closing long-standing gaps that have allowed losses to be reused across positions, a change many tax observers view as transformative for crypto traders.
“Income from lending, staking or income earned through ‘passive’ validator services is treated as part of the recipient's gross income every year, and calculated using ‘fair market’ value, the draft said.”
Advocates like The Digital Chamber praised a modern tax framework for onshoring activity, while others warn the plan may create a two-tier system that benefits certain participants over others. Taken together, these provisions suggest a path toward more nuanced tax treatment depending on asset type and usage, while keeping Bitcoin/miners in the crosshairs of ongoing debate.
Reactions and neutrality
BTC advocates argue that excluding Bitcoin from the exemption undermines technological neutrality. The Bitcoin Policy Institute describes the draft as selecting winners and losers rather than promoting parity. Bitget notes criticism that the plan favors centralized stablecoins over decentralized assets.
DL News highlights the BPI critique as a signal of broader pushback against the draft's framing. These reactions frame a larger policy contest on balancing innovation with regulation in West Asia and beyond.
Next steps and context
The PARITY Act remains a discussion draft with no formal introduction to Congress, and policymakers intend to refine the text after stakeholder engagement. Mainstream and non-Western outlets emphasize that this is not law and that revisions are likely as committees consider the language. Industry groups argue for a broader, technology-neutral approach that would extend relief to miners, stakers, and other participants, while others warn of uneven incentives under a two-tier system.
“The Digital Asset PARITY Act has not yet been introduced to Congress; it was published as a discussion draft to open up debate between lawmakers, stakeholders and the crypto industry about how to overhaul crypto tax policy in the US.”
Market observers note that the policy debate arrives at a moment of heightened regulatory activity around stablecoins and crypto taxation in West Asia and beyond. If advanced, the draft could influence how everyday crypto usage is taxed, potentially improving adoption but raising questions about equity across different blockchain ecosystems.
