A bill known as the PARITY Act was introduced in the U.S. Congress, aimed at updating tax rules for the digital asset market. The initiative is designed to eliminate legal uncertainty surrounding the taxation of cryptocurrencies and related transactions.
Representatives Steven Horsford, Max Miller, Suzan DelBene, and Mike Carey introduced the bipartisan Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Yields (PARITY Act) in the U.S. House of Representatives. The bill proposes a unified taxation framework for digital assets and introduces new standards for market participants, investors, and U.S. tax authorities.
The PARITY Act covers reforms across several regulatory areas. One of its key provisions is the proposal to treat regulated U.S. dollar-pegged stablecoins as cash for tax purposes. The authors of the initiative believe this approach would reduce the administrative burden on the Internal Revenue Service (IRS) and simplify everyday use of dollar-denominated stablecoins in payments, while also limiting opportunities for arbitrage and abuse.
The bill also introduces tax clarity for foreign investors trading digital assets on U.S. platforms. In addition, it extends existing tax principles applied to securities lending transactions to loans involving digital assets.
Another set of amendments addresses tax abuse prevention. The PARITY Act proposes applying wash sale and constructive sale rules, already used in traditional financial markets, to digital assets. It also suggests allowing professional crypto market participants to account for gains and losses on digital assets based on their current market value, similar to securities markets.
A further key provision tackles the issue of so-called phantom income for miners and users of yield-generating products. The bill seeks to establish a clear mechanism for determining when rewards paid in digital assets become taxable. It also clarifies that passive staking doesn’t constitute a commercial activity.
The legislation also updates rules for charitable donations in cryptocurrencies. For widely used and liquid digital assets, it proposes simplifying valuation procedures for donations, while tightening oversight of less-known tokens to prevent artificial inflation of tax benefits.
According to Steven Horsford, the lack of clear rules creates uncertainty for investors, businesses, and regulators, while also favoring large and well-resourced market participants. The authors argue that unified standards should simultaneously support innovation, strengthen investor protection, and enhance the U.S.’s competitiveness in the global digital economy.
The bill will be reviewed by the relevant committee of the U.S. House of Representatives in 2026. The sponsors aim to advance the legislation in Congress in the coming months as part of broader discussions on crypto regulation reform in the United States.
Donald Trump recently signed an executive order modernizing FinTech sector regulation and integrating digital assets into the traditional financial system. In addition, the Senate introduced an updated version of the CLARITY Act, which regulates the crypto market.
