Key Insights
- The PARITY Act proposes a $200 de minimis exemption for small stablecoin payments, easing crypto tax burdens on everyday transactions.
- It allows deferral of mining and staking rewards for up to five years, addressing the issue of phantom income.
- The draft extends traditional securities tax rules to digital assets, including wash sale rules, mark‑to‑market accounting, and lending treatment.
On December 20, 2025, Representatives Max Miller (R‑OH) and Steven Horsford (D‑NV) released a bipartisan draft called the Digital Asset PARITY Act. Both serve on the House Ways and Means Committee.
The proposal aims to modernize taxation rules for digital assets, which often create heavy burdens for users. It seeks to reduce confusion, encourage innovation, and align crypto taxation with traditional financial principles.
Exemption for Small Stablecoin Payments
One of the most important features of the PARITY Act is a de minimis exemption for small personal transactions. This exemption applies to regulated payment stablecoins that are pegged to the U.S. dollar.
Under the proposal, gains or losses from payments under $200 would not trigger taxable events. To qualify, stablecoins must meet strict conditions. They must be issued under the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
They must also maintain a value close to $1. The exemption is limited to everyday users. Professional traders and dealers are excluded.
The measure will take effect for tax years beginning after December 31, 2025. Its goal is to make routine purchases easier. Right now, every small crypto payment can create a tax reporting burden.
Buying a cup of coffee or paying for groceries with digital assets often means calculating gains or losses. That discourages people from using stablecoins in daily life.
By removing this barrier, the PARITY Act aims to encourage wider adoption of digital payments. It gives consumers confidence that small transactions will not create complex tax obligations.
Supporters believe this change could help integrate stablecoins into mainstream commerce and everyday financial activity.
Rules for Mining, Staking, and Trading
The draft addresses mining and staking rewards. Current guidance treats rewards as taxable income at receipt, even if they cannot be sold. This creates phantom income.
The PARITY Act allows taxpayers to defer recognition for up to five years. At the end of deferral, rewards are taxed as ordinary income at fair market value.
The bill also extends securities tax rules to digital assets. Wash sale rules would apply to actively traded cryptocurrencies. Professional traders and dealers could elect mark‑to‑market accounting, recognizing gains and losses annually.
Genuine lending of fungible, liquid digital assets would receive nonrecognition treatment, similar to securities lending. Non‑fungible tokens and illiquid assets are excluded.
Other Measures and Legislative Path
The draft waives qualified appraisal requirements for charitable donations of high‑market‑cap digital assets worth over $10 billion.
It clarifies that passive protocol‑level staking by investment funds is not a trade or business. It also provides tax certainty for foreign investors using U.S. digital asset platforms.
The PARITY Act is a discussion draft. It invites feedback before a formal introduction. It builds on recent progress, including the GENIUS Act’s stablecoin framework and the Digital Asset Market Clarity Act.
Supporters say the reforms will foster innovation, protect consumers, and maintain tax integrity. The proposal reflects bipartisan recognition that outdated tax rules hinder mainstream use of digital assets.
By easing burdens on small transactions and rewards, it could support broader adoption of cryptocurrencies in payments and decentralized networks. Its passage, however, depends on committee debate and congressional priorities in the coming session.
Moses K is a crypto journalist covering markets, regulation, and blockchain trends. He has written for The Coin Republic, Coinchapter, Cryptopolitan, Cryptotale, Coinspeaker, and MPost. Known for his concise, data-driven reporting, Moses focuses on price analysis, on-chain metrics, and policy developments shaping the global digital asset landscape.
