At the end of March 2024, Congressmen Steven Horsford (D-Nev.) and Max Miller (R-Ohio) reintroduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields (PARITY) Act, a bill aiming to update the regulation and taxation of digital assets in the United States. The proposal brings significant adjustments compared to the initial version released in December 2023, mainly regarding the rules applied to regulated stablecoins.
The reformulation eliminates the $200 exemption limit for transactions involving stablecoins, present in the previous draft. Furthermore, the text reinforces that, in sales of these stable digital currencies, no gain or loss should be recorded unless the asset’s cost is less than 99% of the amount received upon redemption. These measures seek to clarify and simplify the tax treatment of these transactions.
Another important change is the definition of a presumed cost set at $1 for exchanges between different stablecoins when not defined as sales. The bill also explicitly distinguishes between “passive staking” and cryptocurrency trading operations, aiming to avoid interpretative ambiguities that could impact the taxation of these different types of activities.
Additionally, the proposal incorporates the application of wash sale rules, which prevent the deduction of losses in sales followed by repurchase of the same asset, for transactions involving digital assets. This concept is also part of a similar bill introduced by Senator Cynthia Lummis (R-Wyo.). Therefore, a coordinated movement in Congress is observed to align the rules related to these assets.
Although the President of the United States recently released the budget requests for fiscal year 2027, there is, so far, no confirmation about the inclusion of the PARITY Act proposal in future legislative initiatives related to taxation. On the other hand, recent discussions with industry representatives indicate the intention to consider cryptocurrencies in imminent tax reforms.
The value of bitcoin (BTC) was recorded at $74,411.93, providing economic context near the period in which the legislation is being discussed. The conclusion of the legislative process still depends on processing by committees and the possible incorporation of the text into broader fiscal projects scheduled for the coming months.
Context and Impact of the Proposal on the Cryptocurrency Market and Regulation
The reintroduction of the Program for Assessing Risk to Investments in Tokens Yielding (PARITY) Act takes place at a time when the United States Congress debates comprehensive tax reforms. This bipartisan initiative involves members of the Democratic and Republican parties, reflecting a collective interest in cryptocurrency regulation. Thus, the bill seeks to respond to the growing need for adapting tax rules to the digital economy.
The text could significantly impact digital asset holders, who will be required to report all transactions and related statements regarding these investments. On the other hand, the proposal provides exemptions for minimal gains, which may change user behavior in everyday transactions, such as small purchases with cryptocurrencies. This point is relevant for the market, as it may facilitate the use of crypto as a means of payment in daily life.
Moreover, the PARITY Act proposes greater clarity for the taxation of regulated stablecoins, whose values are linked to stable assets such as fiat currencies. This means that while some cryptocurrencies may have specific tax treatment, stablecoins will be subject to more defined regulations, offering a more predictable legal environment for issuers and investors.
Another aspect highlighted by the proposal refers to strengthening controls against money laundering and compliance with regulatory rules. Shin Huyn-song, nominated for a relevant regulatory sector position, emphasized the importance of these mechanisms to prevent fraud in the crypto-asset market. Thus, the bill underscores that financial security is a fundamental element in the new tax regime.
The proposal also differentiates forms of cryptocurrency income, such as staking and trading, which may be subject to different tax treatments. This could influence how investors structure their operations, as different modes of gain will have appropriate rules. Additionally, the inclusion of wash sale rules, which aim to prevent market manipulation by blocking simulated sales, represents progress in the sector’s regulatory integrity.
So far, there is no official confirmation about the incorporation of the cryptocurrency sector in future tax reconciliation measures, although there are indications this may occur. Therefore, the ongoing debate is part of a broader effort to increase transparency and supervision of crypto-assets in the United States.
The next step will be the detailed analysis of the bill by the responsible committees, which should assess the impact of the proposals on the market and current legislation. Besides lawmakers’ attention, regulatory agencies are expected to monitor the topic to ensure compliance with the new rules in the financial environment.
