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New crypto draft skips Bitcoin tax exemption
A new U.S. crypto tax discussion draft is drawing early criticism for what it includes and what it leaves out.
On Thursday, Representatives Max Miller and Steven Horsford released the “Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act,” or Digital Asset PARITY Act.
The proposal aims to modernize how digital assets are taxed under the Internal Revenue Code of 1986, offering long-awaited clarity for parts of the crypto market.
But the details reveal a clear tilt.
The draft introduces a de minimis exemption for stablecoin transactions under $200, meaning small payments would not trigger capital gains taxes or reporting requirements. It also clarifies that dollar-pegged stablecoins will not incur gains as long as their value remains within 1% of $1.
In effect, the bill treats stablecoins more like cash. Stablecoins are cryptocurrencies designed to maintain a stable value by being pegged to assets like the US dollar or other reserves.
A 'parity' bill that picks winners?
Despite its name, critics argue the bill falls short of true parity.
Notably, there is no mention of any tax exemption for Bitcoin (BTC), the largest cryptocurrency by market capitalization. That omission has sparked backlash from Bitcoin advocates, who say the proposal creates an uneven playing field.
Conner Brown, former counsel to Sen. Cynthia Lummis and now at the Bitcoin Policy Institute, warned that the draft “sets America and Bitcoin back.”
The organization echoed that sentiment, arguing the bill risks “picking winners and losers” by favoring stablecoins over decentralized assets.
The Institute pointed out that without a de minimis exemption, even small Bitcoin transactions, like buying coffee, remain taxable events requiring capital gains calculations. That friction, they said, undermines Bitcoin’s potential as a medium of exchange.
Broader tax overhaul still taking shape
The draft also tackles other areas of crypto taxation.
Income from staking, lending, and validator activity would be taxed annually as gross income based on fair market value. Meanwhile, transaction costs tied to acquiring or moving stablecoins would not count toward an investor’s cost basis.
Still, the legislation is far from final. As a discussion draft, it is intended to spark debate among lawmakers, regulators, and industry participants before formal introduction to Congress.
That leaves room for revisions and mounting pressure.
This article has been published in thestreet.com via Yahoo News.
New crypto draft skips Bitcoin tax exemption
Stablecoins get clarity, Bitcoin is left behind. A new U.S. crypto tax discussion draft is drawing early criticism for what it includes and what it leaves out. On Thursday, Representatives Max Miller and Steven Horsford released the “Digital Asset Protection, Accountability, Regulation...
finance.yahoo.com
