Two bipartisan US House lawmakers have unveiled a draft bill aimed at easing crypto taxes for everyday users. The proposal would shield small stablecoin payments from capital gains taxes and delay taxes on staking rewards. Lawmakers say the goal is practicality, not promoting speculative trading.
The discussion draft, called the Digital Asset PARITY Act, was introduced by Rep. Max Miller, an Ohio Republican, and Rep. Steven Horsford, a Nevada Democrat. Both serve on the House Ways and Means Committee, which writes US tax law.
The proposal would create a limited tax safe harbor for consumer stablecoin use. Payments made with qualifying, dollar-pegged stablecoins worth less than $200 would not trigger capital gains taxes. Lawmakers say this would remove a major compliance headache for routine purchases like food, transportation, or subscriptions.
Under current rules, even tiny price fluctuations can force users to calculate gains or losses. Horsford said the draft is meant to offer clearer rules while protecting the integrity of the tax system.
Only tightly regulated stablecoins would qualify. Eligible tokens must be issued by permitted entities under the proposed GENIUS Act, be fully backed by US dollars, and trade within 1% of $1.00 on at least 95% of days over the past year. Brokers and dealers would be excluded, and the exemption would not apply to Bitcoin, Ether, or other cryptocurrencies.
Lawmakers are also considering an annual cap to prevent the safe harbor from being used to mask investment activity instead of consumer spending.
The draft also tackles another long-running dispute in crypto taxation: when staking and mining rewards should be taxed. The IRS currently treats rewards as taxable income when received, a stance heavily criticized by industry groups. Some lawmakers, including Senator Cynthia Lummis, favor taxing rewards only when sold.
The Miller-Horsford proposal lands in between. Taxpayers could elect to defer taxes on staking and mining rewards for up to five years. After that period, the rewards would be taxed as ordinary income based on fair market value. The framework is described as a compromise between immediate taxation and indefinite deferral.
Beyond consumer payments, the draft aligns crypto more closely with securities tax rules. It would apply wash sale restrictions to digital assets, curb tax strategies that lock in gains while deferring payments, and extend securities lending treatment to certain crypto loans involving liquid, fungible assets. NFTs and illiquid tokens would be excluded.
Additional provisions clarify that passive protocol-level staking by investment funds is not a trade or business. Professional traders could use mark-to-market accounting, and appraisal rules for charitable donations of large-cap digital assets would be relaxed.
If adopted, the stablecoin safe harbor would apply to taxable years beginning after December 31, 2025. Miller has said he believes the broader legislation could move forward before August 2026.
