Revised PARITY Act would exempt everyday regulated stablecoin payments from capital gains, aligning them with cash-like transactions in the U.S. tax code.
Summary
- Revised Digital Asset PARITY Act would shield everyday regulated stablecoin payments from capital gains tax.
- Proposal aligns “regulated payment stablecoins” with foreign currency rules while tightening wash-sale rules for other crypto.
- USDC and USDT transactions are currently treated as taxable disposals under IRS guidance.
Under a new draft of the Digital Asset PARITY Act in Washington, gains on everyday payments made with regulated dollar-pegged stablecoins could be ignored for tax purposes, a shift that would make routine USDC and USDT spending effectively tax-free for many U.S. users if enacted. The bipartisan proposal, led by Representatives Steven Horsford and Max Miller in the House, is being circulated as a discussion draft that rewrites how the tax code treats digital assets and payment tokens.
Today, the Internal Revenue Service classifies stablecoins as “digital assets” taxed as property, meaning that every sale, exchange or use of USDC or USDT is treated as a potential capital gain or loss event. Tax firms note that converting crypto into USDC, swapping one stablecoin for another or using a stablecoin to buy goods all trigger reportable transactions, even if the price stays close to $1.
According to a summary of the PARITY draft reported by CryptoSlate, the bill would create a carve-out for “Regulated Payment Stablecoins,” so that “sellers recognize no gain or loss” on qualifying transactions as long as the token trades within a $0.99 to $1.01 band and meets strict issuance standards. In that framework, the taxpayer’s basis is deemed to be $1 per unit, and minor fluctuations within the band are simply ignored for day-to-day payments.
A separate write-up of the reintroduced PARITY Act explains that instead of a flat dollar limit per transaction, the new draft focuses on whether a taxpayer’s cost basis falls below 99% of the stablecoin’s redemption value, effectively eliminating capital gains calculations for most small consumer payments in regulated coins. Only USD‑pegged stablecoins issued by authorized entities and keeping their peg within 1% for at least 95% of trading days over the prior 12 months would qualify, tying the tax benefit directly to regulatory status and price stability.
At the same time, the bill would extend traditional wash-sale rules to digital assets like Bitcoin and other actively traded tokens, closing a long-standing loophole that allowed aggressive tax-loss harvesting in volatile crypto markets. For now, however, IRS guidance continues to treat every USDC or USDT disposal as taxable, and any relief for stablecoin users will depend on whether Congress can push the PARITY Act from draft form into law amid broader debates over U.S. crypto regulation and dollar-backed stablecoins.
