Bipartisan House Bill Proposes Major Overhaul of US Crypto Tax Rules

WASHINGTON — U.S. Representatives Max Miller (R-OH) and Steven Horsford (D-NV) have released a bipartisan discussion draft of the Digital Asset PARITY Act, a new bill aiming to significantly reform how digital assets are taxed. The proposed legislation seeks to close a well-known tax loophole for cryptocurrencies while simultaneously creating new exemptions intended to make certain digital assets more practical for everyday payments. The bill’s central provisions would extend long-standing financial regulations, such as the “wash-sale” rule, to cover digital assets. This would end a popular tax-loss harvesting strategy used by crypto investors. Currently, unlike with stocks and securities, investors can sell cryptocurrency at a loss to reduce their tax burden and immediately repurchase the same asset. The proposed legislation would eliminate this discrepancy. At the same time, the act aims to simplify the use of certain stablecoins by exempting them from capital gains taxes on small transactions, a move designed to encourage their use as a payment method. For small and mid-sized businesses, this proposed legislation is a double-edged sword that demands immediate attention. While the prospect of using regulated stablecoins for payments without triggering a complex tax event for every transaction is an appealing simplification, the devil is in the details. The bill’s framework relies on a yet-to-be-finalized definition of a “regulated payment stablecoin,” which could create new compliance burdens as businesses would need to track which digital assets qualify for the exemption. In our experience, legislative ambiguity often translates into operational headaches for business owners who need clear, actionable rules. The more immediate impact for many business leaders and investors will be the proposed application of wash-sale and constructive-sale rules to digital assets. This closes a significant loophole that has been a key component of tax strategy for many who hold crypto on their balance sheets or as part of an investment portfolio. This change would require a fundamental rethinking of how digital asset losses are managed and reported. Navigating these shifting regulations requires expert guidance. For businesses looking to understand how these potential new tax rules could impact their operations, C&S Finance Group LLC offers specialized tax preparation and compliance services to ensure they remain ahead of the curve. You can learn more at csfinancegroup.com. “America’s tax code has failed to keep pace with modern financial technology,” said Congressman Miller in a statement accompanying the draft’s release. “This bipartisan legislation brings clarity, parity, fairness, and common sense to the taxation of digital assets.” Congressman Horsford added that the bill “takes a targeted approach that provides an even playing field for consumers and businesses alike to benefit from this new form of payment.” Beyond the wash-sale rule and stablecoin exemption, the Digital Asset PARITY Act contains several other key provisions. It would extend existing securities-lending tax rules to digital assets, ensuring that bona fide lending activities are not treated as taxable sales. The bill also proposes allowing digital asset traders and dealers to make a mark-to-market election for their accounting, a move that would align their tax treatment with practices in established financial markets. Furthermore, it seeks to clarify source-of-income rules for digital asset trading to provide more certainty for both U.S. and foreign market participants. The release of the discussion draft has drawn a mixed reaction from the cryptocurrency industry. The Digital Chamber, a crypto advocacy organization, celebrated the bill as a critical step toward creating a modern tax framework essential for keeping innovation in the United States. In a statement, the group noted it would continue working to ensure a “common-sense framework is law.” However, other groups have voiced significant concerns. The Bitcoin Policy Institute, a pro-Bitcoin think tank, criticized the draft for “picking winners and losers.” In an analysis, the institute argued that by providing a tax carveout exclusively for regulated stablecoins, the legislation unfairly disadvantages decentralized assets like Bitcoin. This sentiment was echoed by advocates pushing for a broader de minimis exemption, which would exempt small transactions of any cryptocurrency, not just specific stablecoins, from capital gains taxes. “We need de minimis on bitcoin and will keep advocating that it’s added to this bill,” wrote Cody Carbone, CEO of the Digital Chamber, on social media, clarifying that the group was not yet endorsing the draft in its current form. This legislative effort is the latest in a series of attempts by Congress to establish a comprehensive regulatory framework for the digital asset industry. It follows several other proposals, including the Responsible Financial Innovation Act introduced by Senators Cynthia Lummis and Kirsten Gillibrand in 2022, and multiple discussion drafts released by Senate committees throughout 2025. The fact that the PARITY Act is being introduced as a discussion draft indicates that its sponsors are seeking public and industry feedback before formally introducing it for a vote, leaving the door open for significant revisions. Moving forward, the bill’s path remains uncertain. Lawmakers will now gather feedback, and the debate between a targeted stablecoin exemption versus a broader de minimis exemption is expected to be a central point of contention. The final version of the bill, if it advances, will signal which policy approach and industry coalition ultimately gains more traction on Capitol Hill. Businesses and investors should monitor these developments closely as they could fundamentally alter the financial and operational landscape for using digital assets in the U.S.