The United States may soon see one of its biggest changes to crypto taxes. Two lawmakers from different political parties have introduced a new proposal called the Digital Asset PARITY Act. The goal of this proposal is to make crypto tax rules clearer, fairer, and easier to follow for everyday users.
Right now, many people find crypto taxes confusing and difficult to manage. This new update aims to reduce that confusion and make crypto more practical for daily use. It focuses on simple rules, better clarity, and fair treatment of crypto users.
Below is a simple explanation of what this major U.S. crypto tax update could mean for people who use or invest in cryptocurrencies.
Small Stablecoin Payments May Become Tax-Free
Small stablecoin payments may soon become tax free under the new proposal. At present, even very small crypto payments can create tax issues for users.
If this rule is approved, payments made using U.S. dollar backed stablecoins for amounts under $200 would not require capital gains tax.
This change is meant to make everyday activities, such as small transfers or simple purchases, much easier for regular users.
However, it is important to note that this tax benefit would apply only to stablecoins and not to cryptocurrencies like Bitcoin or Ethereum.
New Compromise on Staking and Mining Taxes
The new proposal also focuses on when staking and mining rewards should be taxed, which has been a long-standing concern for crypto users. At present, the IRS taxes these rewards as income as soon as they are received, even if the user has not sold them.
This often creates a “phantom income” problem, where people owe taxes on assets they have not actually converted into cash. To address this, the proposal introduces a balanced solution.
Taxpayers would be allowed to delay paying taxes on staking and mining rewards for up to five years.
After this period, the rewards would be taxed as ordinary income based on their market value at that time, offering a fairer and more practical approach.
Crypto Treated More Like Stocks and Commodities
The bill is designed to align crypto taxes with traditional financial assets, making taxation more predictable for investors and traders. By applying familiar rules already used for stocks and commodities, the proposal aims to bring clarity and consistency to the crypto market.
One major update is that wash sale rules would apply to crypto, preventing investors from claiming tax benefits by quickly repurchasing sold assets.
Professional traders can use mark-to-market accounting, treating gains and losses as ordinary income.
The bill also makes crypto lending non-taxable for liquid assets, excludes NFTs and illiquid assets, and eases rules for charitable donations of large digital assets.
It clarifies that passive staking by investment funds is not considered running a business, simplifying tax rules for all users.
When Will These Rules Start?
The stablecoin tax exemption would start after December 31, 2025. Lawmakers expect the full bill to pass before August 2026 with support from both parties.
Bottom line:
This is one of the most significant bipartisan efforts to update U.S. crypto tax rules. It provides relief for small payments and staking rewards and makes crypto taxes more similar to traditional financial assets.
While the proposal helps many users, some debates continue, especially about limiting the tax exemptions only to stablecoins. Overall, it is a positive step toward clearer and fairer crypto tax rules for everyone.
