US Lawmakers Introduce the Digital Asset PARITY Act to Revolutionize Crypto Taxes
The world of cryptocurrency is evolving rapidly, and so are the regulations governing it. On December 20, a bipartisan team of US lawmakers introduced the Digital Asset PARITY Act, a bill designed to modernize crypto tax policies while addressing key issues within the industry. Sponsored by Representatives Max Miller and Steven Horsford, this legislation could be a major turning point for cryptocurrency traders, investors, and everyday users.
What Is the Digital Asset PARITY Act?
The Digital Asset PARITY Act seeks to overhaul critical aspects of crypto taxation, providing clarity and fairness to the burgeoning industry. One of its most notable provisions aims to close crypto’s “wash sale” loophole, which has long allowed traders to sell digital assets at a loss for tax benefits and repurchase them almost immediately. By aligning crypto with equity market rules, traders would need to wait 30 days before buying back assets to claim such losses, a measure that could raise billions in federal revenue.
Additionally, the bill offers substantial tax relief by enabling miners and stakers to defer taxes on rewards until their assets are sold. This solution addresses the issue of “phantom income,” where validators receive rewards in illiquid tokens they cannot easily sell to cover tax liabilities. These provisions aim to create a more equitable and practical tax framework for the crypto ecosystem.
Tax Benefits for Everyday Crypto Users
One of the highlights of the Digital Asset PARITY Act is the introduction of a “de minimis” exemption for small crypto transactions. This provision exempts crypto payments under $200 from capital gains tax, making it easier for consumers to use digital assets for everyday purchases. This step could pave the way for cryptocurrencies like Bitcoin and stablecoins to function more seamlessly as payment methods, removing a significant barrier to their adoption.
Addressing Charitable Giving and Consumer Protections
The legislation also aims to tighten the rules surrounding charitable donations made in cryptocurrencies. By distinguishing between liquid assets and speculative tokens, the Act seeks to prevent tax valuation abuse while supporting genuine philanthropic efforts. Combined with enhanced compliance measures, this aspect of the law strengthens protections for consumers and provides clarity for businesses and innovators in the crypto space.
Why This Is a Big Deal for the Crypto Industry
The Digital Asset PARITY Act is more than just a set of tax reforms—it’s a signal that the US government is taking significant steps to bring cryptocurrencies into the mainstream financial system. By addressing long-standing loopholes and providing practical solutions for both institutional and retail users, the legislation helps strike a balance between innovation and fair taxation.
For example, if you’re actively trading or staking within the crypto economy, tools like CoinTracking can help you track your portfolio while ensuring regulatory compliance. Understanding your tax liabilities and the new benefits this Act offers can save you time and money while protecting your investments.
Conclusion
The Digital Asset PARITY Act represents a comprehensive approach to crypto taxation, addressing issues that have long hindered the growth and adoption of digital currencies. By combining stricter rules on trading with exemptions for everyday use and better frameworks for staking and mining, this bill could redefine how the US approaches the crypto industry. Stay informed and be ready to adapt to these changes as they unfold.
