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Bipartisan Bill in the US Aims to Revamp Stablecoin Taxation

U.S. lawmakers are taking a significant step towards modernizing the tax treatment of stablecoins with the introduction of the Digital Asset PARITY Act.

This bipartisan effort, spearheaded by Representative Max Miller and Representative Steven Horsford, targets the federal tax code to better accommodate digital assets.

The proposed legislation seeks to eliminate capital gains tax reporting for everyday transactions involving stablecoins under a specified threshold, simplifying compliance for consumers.

Additionally, it aims to clarify income sourcing for digital asset trading and aligns taxation of digital assets with traditional securities rules to prevent tax abuse.

Innovators and investors in the crypto space would benefit from the framework allowing for tax deferral on staking and mining rewards, addressing concerns related to “phantom income.”

Miller emphasized the need for a tax code that reflects modern financial technology, stating that the bill promotes clarity and fairness.

Among other provisions, the PARITY Act would apply established wash-sale rules to digital assets, mitigating tax shelters.

Crucially, the bill proposes exemptions for regulated stablecoin transactions, easing compliance for low-value transfers.

Horsford highlighted that even minor crypto transactions should not trigger burdensome tax calculations, advocating for a fairer financial landscape.

If passed, these changes could reshape how stablecoins are utilized within the U.S. economy while fostering innovation in the digital asset space.