Digital Asset PARITY Act Addresses Mining, Staking, and Trading Taxes

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US lawmakers are taking a more practical approach to crypto regulation with the introduction of the Digital Asset PARITY Act. Supported by Representatives Max Miller and Steven Horsford, the bipartisan proposal aims to simplify the taxation of digital assets, addressing a long-standing confusion that has affected traders, investors, and everyday users.

Instead of introducing broad new restrictions, the bill targets specific weaknesses in the current tax system, which was never designed for blockchain-based assets. Its goal is to reduce friction while making enforcement and reporting more consistent.

Aligning Crypto With Traditional Financial Rules

The PARITY Act aims to align digital asset taxation with the rules governing stocks, commodities, and securities. Lawmakers argue this approach will give market participants clearer expectations and eliminate gray areas that have caused uncertainty and inconsistent reporting.

By updating the IRS code, the bill seeks to make crypto taxes easier to understand, especially for individuals and businesses that regularly deal with digital assets.

Everyday Stablecoin Use Gets Easier

A key feature of the bill is its treatment of payment stablecoins. It introduces a de minimis exemption for regulated, dollar-pegged stablecoins used in small transactions. This means people could spend stablecoins for routine purchases without triggering capital gains reporting every time.

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The bill also clarifies income rules for foreign investors using US-based crypto platforms, giving more certainty for cross-border transactions.

Clearer Rules for Traders and Dealers

For professional traders, the bill tightens rules but also provides clarity. It applies wash sale and constructive sale rules to actively traded digital assets, closing loopholes that allowed aggressive tax strategies.

At the same time, eligible traders and dealers could use mark-to-market accounting, putting crypto trading on similar terms as traditional securities markets. The bill also offers non-taxable treatment for qualifying digital asset lending arrangements that function like real loans rather than asset sales.

Addressing Mining and Staking Taxes

The bill tackles the issue of phantom income for miners and stakers. Taxpayers could choose to defer taxes on rewards until a clearly defined event. When taxed, these rewards would be treated as ordinary income with a set cost basis for future gains.

Industry Reaction

Crypto analyst Mason Blak C calls the proposal a clear sign that lawmakers are addressing real tax challenges. He says the bill reduces friction for users, provides clearer rules for developers, and limits opportunities for tax abuse.

Though still a draft, the Digital Asset PARITY Act represents a meaningful step toward fairer, clearer, and more practical crypto tax rules in the US.