In a bipartisan move to bring clarity to the digital asset landscape, Representatives Max Miller and Steven Horsford have unveiled the Digital Asset PARITY Act. The proposed legislation aims to close tax loopholes while offering significant exemptions for everyday crypto users.
WASHINGTON, D.C. – A groundbreaking piece of legislation has been introduced in the United States House of Representatives, promising to reshape how cryptocurrencies and digital assets are taxed. Dubbed the Digital Asset PARITY Act (Providing Adequate Real-world Integration for Taxpayers Year-round), the bill seeks to bridge the gap between traditional finance and the burgeoning crypto economy.
Spearheaded by Rep. Max Miller (R-OH) and Rep. Steven Horsford (D-NV), this bipartisan framework addresses long-standing ambiguities in the tax code, proposing a balanced approach that tightens compliance for traders while easing the burden on consumers using crypto for daily transactions.
Closing the “Wash Sale” Loophole
One of the most significant provisions of the PARITY Act is the alignment of cryptocurrency trading rules with traditional equity markets. The bill proposes to close the so-called “crypto wash sale loophole.”
Under current regulations, crypto investors can sell assets at a loss to claim a tax deduction and immediately repurchase the same asset. The new legislation would apply the standard “wash sale rule” found in the stock market to digital assets, requiring traders to wait 30 days before repurchasing an asset if they wish to claim a capital loss. This move is designed to prevent tax avoidance and ensure parity between digital and traditional asset classes.
Tax Relief for Everyday Payments
While the bill introduces stricter rules for traders, it offers a major victory for the utility of cryptocurrencies as a medium of exchange. The Act includes a De Minimis exemption for small transactions.
Under the proposal, capital gains realized on stablecoin transactions or other digital asset payments under $200 would be exempt from taxation. This effectively removes the administrative nightmare of calculating capital gains on every cup of coffee or small purchase made with crypto, encouraging the use of digital assets for real-world payments.
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Support for Miners and Stakers
Recognizing the unique technical nature of the crypto industry, the PARITY Act also addresses income generated through blockchain maintenance.
The bill proposes a five-year tax deferral on income derived from staking and mining rewards. This provision aims to support infrastructure providers and validators by allowing them to hold their assets without being forced to sell immediately to cover tax liabilities, fostering long-term investment in blockchain networks.
A Step Toward Regulatory Clarity
The introduction of the Digital Asset PARITY Act comes at a crucial time as the US government intensifies its focus on the digital asset sector. By distinguishing between speculative trading and functional utility, the bill attempts to strike a compromise that satisfies both regulators and industry advocates.
“This bill protects consumers making everyday purchases and ensures the rules are clear for innovators and investors,” Rep. Max Miller stated regarding the proposal.
As the bill moves through the legislative process, market participants are keeping a close eye on its progress, with potential implementation targeted for 2026. If passed, it would mark one of the most comprehensive updates to the US tax code regarding digital assets to date.
