New Policy for Stablecoins: What Has Changed in Digital Asset Taxation?

Legislator bipartisan Max Miller (R-Ohio) and Steven Horsford (D-Nev.) launched a significant initiative through the PARITY Act to streamline the taxation of digital asset transactions. The main focus: providing relief to retail users engaging in small stablecoin transactions while closing existing tax gaps in the industry.

Small Stablecoin Transactions Exempt from Capital Gains Tax

This proposal offers special protection for controlled stablecoin transactions valued below $200 linked to the US dollar. This mechanism removes the heavy compliance burden for individual investors making small-scale daily crypto purchases.

To qualify for this benefit, stablecoins must meet strict criteria: issued by licensed issuers under the GENIUS Act, exclusively tied to the US dollar, and maintaining a price within 1% of $1.00 for 95% of trading days last year. These restrictions are designed to prevent abuse and protect overall government revenue. It is important to note that brokers and professional traders remain excluded from this exemption.

Tax Penalties for Staking: A Compromise Solution for Reward Recipients

Questions about when to impose taxes on staking and mining rewards now have an answer. The current system taxes rewards as income at the time of receipt— a policy considered unfair by many lawmakers.

The Miller-Horsford proposal introduces a flexible approach: individuals can choose to defer paying taxes on rewards for up to five years, with valuation based on fair market value at the time of payment. This compromise balances the interests of immediate taxation and full penalization, while addressing concerns from crypto advocates on Capitol Hill like Senator Cynthia Lummis (R-Wyo.) who has proposed comprehensive tax deferral.

Expanding Securities Regulatory Framework to Digital Assets

This legislation goes beyond specific transaction exemptions by integrating digital assets into the existing securities tax regime. Several key rules are implemented:

• Wash Sale Rule: Applied to crypto to prevent investors from offsetting losses with repurchases of the same asset
• Constructive Sale Rules: Protection against ongoing sales of digital assets
• Asset-Based Lending: Crypto loan transactions do not trigger taxable events
• Crypto Asset Donations: Large donations do not require qualifying valuations
• Mark-to-Market Accounting: Market participants can opt for this method for reporting

The regulation also clarifies that passive staking protocols operated by investment funds are not considered trading activities, providing more favorable tax treatment for structured investment vehicles.

These new rules are scheduled to take effect for tax years beginning after December 31, 2025, giving the industry time to adapt to the updated tax standards.