Bipartisan US Lawmakers Propose Overhaul of Digital Asset Tax Rules

A new bill aimed at modernizing the US's digital asset tax framework has been introduced in Congress.

The proposed Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields (PARITY) Act aims to address outdated and inconsistent tax rules surrounding cryptocurrencies. The framework also represents a concerted effort to eliminate administrative tax traps for retail users while simultaneously closing compliance loopholes exploited by sophisticated traders.

Under the proposal, regulated dollar-backed stablecoins used for routine payments could receive tax treatment similar to cash transactions, reducing compliance complexity for everyday users and merchants.

The legislation introduces several proposed changes covering stablecoins, staking rewards, lending activity, mining operations, and professional crypto trading. It also clarifies that passive protocol-level staking by investment funds would not automatically qualify as a trade or business under the tax code.

One of the most consequential changes outlined in the PARITY Act addresses how onchain validation rewards are processed. The bill resolves this issue by allowing stakers to elect to defer asset taxation for up to five years, rather than being taxed immediately upon receipt.