Congress proposes removal of widely used Bitcoin tax loophole and giving it to regulated stablecoins
Congress introduced the Digital Asset PARITY Act to close the crypto wash-sale loophole while offering tax relief for regulated stablecoin payments.Summary
The bipartisan Digital Asset PARITY Act discussion draft, introduced by Reps. Steven Horsford and Max Miller, proposes significant changes to digital asset taxation. Primarily, it aims to close the widely exploited wash-sale loophole for actively traded digital assets by rewriting Section 1091 to cover them, aligning crypto tax treatment with that of stocks and securities.
Conversely, the draft offers tax relief for regulated payment stablecoins by allowing sellers to recognize no gain or loss on sales within a $0.99 to $1.01 band, provided the stablecoin meets strict criteria under the GENIUS framework, such as being pegged solely to the USD and issued by a permitted issuer. This carveout is intended to encourage the use of crypto for payments, distinguishing it from speculative trading.
The proposal reflects a broader policy consensus already mapped out by the White House and the Joint Committee on Taxation, favoring constraints on trading while incentivizing regulated payment rails. The wash-sale crackdown is considered the concrete, ready-to-move aspect, while the stablecoin relief remains mechanically unfinished and dependent on ongoing technical review and the rollout of the OCC's issuer framework.
(Source：CryptoSlate)