US lawmakers released a bipartisan discussion draft aimed at bringing clarity and consistency to how digital assets are taxed, as Congress faces growing pressure to modernise rules written largely before cryptocurrencies entered mainstream finance.
The proposal, dubbed the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields (PARITY) Act, was unveiled by Steven Horsford, a Democrat, and Max Miller, a Republican.
It seeks to align the taxation of cryptocurrencies and related activities with long-standing principles applied to stocks, commodities and other financial assets.
The draft targets what the lawmakers describe as unnecessary compliance burdens for consumers and businesses, while also closing gaps that could enable tax avoidance as digital asset usage scales.
Current rules can trigger taxable events for even small crypto transactions, while leaving other areas such as staking, lending and valuation open to interpretation.
Under the proposal, regulated, dollar-pegged payment stablecoins would be treated like cash for tax purposes, reducing reporting burdens on routine transactions and limiting arbitrage opportunities.
The bill would also apply wash-sale and constructive sale rules to digital assets, extend securities-lending tax treatment to qualifying crypto loans, and allow professional digital asset dealers to elect mark-to-market accounting similar to securities traders.
Other provisions would provide tax certainty for foreign investors trading on U.S. platforms, modernise charitable donation rules for digital assets, and address so-called “phantom income” by allowing miners and stakers to choose when rewards are taxed.
The draft also clarifies that passive, protocol-level staking by investment funds does not constitute a trade or business.
The discussion draft reflects months of bipartisan work and is intended to solicit feedback before formal legislation is introduced.
The PARITY Act signals a pragmatic shift in Washington’s approach to crypto, focusing less on sweeping regulation and more on fitting digital assets into existing tax frameworks.
While the proposal may be welcomed by exchanges, investors and funds seeking certainty, its progress will depend on broader congressional dynamics and ongoing debates over crypto oversight.
If advanced, it could reduce friction for everyday crypto use while tightening rules around professional trading and abuse, a balance lawmakers hope will support innovation without eroding the tax base.