Congress proposes removal of widely used Bitcoin tax loophole and giving it to regulated stablecoins
Congress has introduced the Digital Asset PARITY Act, a bipartisan discussion draft introduced by Reps. Steven Horsford and Max Miller, who would rewrite Section 1091 to cover “specified assets.” The category explicitly includes actively traded digital assets and their derivatives, and carves out a
Congress has introduced the Digital Asset PARITY Act, a bipartisan discussion draft that would significantly reshape cryptocurrency taxation in the United States. Representatives Steven Horsford and Max Miller are leading the initiative, which proposes rewriting Section 1091 of the tax code to cover "specified assets" including actively traded digital assets and their derivatives.
The legislation specifically targets a widely used Bitcoin tax strategy while creating exemptions for regulated payment stablecoins from routine gain-or-loss recognition. This represents a major shift in how different categories of digital assets would be treated under federal tax law, distinguishing between speculative cryptocurrencies and payment-focused stablecoins.
The proposed changes could have substantial implications for cryptocurrency investors and the broader digital asset market. By closing existing tax loopholes for Bitcoin and other cryptocurrencies while providing favorable treatment for regulated stablecoins, the legislation may influence investor behavior and asset allocation strategies. The move signals Congress's intent to create clearer distinctions between different types of digital assets based on their intended use and regulatory compliance.
The bipartisan nature of the proposal suggests potential for advancement through the legislative process, though the timeline for consideration remains unclear. Market participants will be closely monitoring committee assignments and hearing schedules as the discussion draft moves through Congress.
Source: CryptoSlate
