Key Points
- The proposed PARITY Act would require the US Treasury Department to review tax relief options for small crypto payments.
- The legislation also includes special tax treatment for stablecoins used like digital cash.
- Kraken reportedly filed 56 million crypto tax forms for 2025, most involving transactions under $50.
A bipartisan group of US lawmakers has introduced new legislation aimed at modernizing cryptocurrency tax rules and reducing compliance burdens tied to small digital asset transactions.
The proposal, officially named the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act — or PARITY Act — was introduced on May 19 by Representatives Steven Horsford, Max Miller, Suzan DelBene, and Mike Carey.
According to Horsford’s office, the bill is designed to establish clearer tax standards for digital assets while strengthening consumer protections, limiting abuse, and providing more certainty for both investors and businesses operating in the crypto sector.
Horsford stated that Washington must adapt to the growing role of digital assets in the economy, arguing that outdated and unclear regulations continue to create confusion for consumers, companies, investors, and regulators alike.
Focus On Small Crypto Payments
Rather than immediately creating a blanket tax exemption for low-value crypto purchases, the PARITY Act would direct the Treasury Department and the IRS to study whether a “de minimis” exemption could be implemented under existing legal authority.
The review would examine the reporting burden created by small crypto transactions and evaluate how many transactions below $200 are currently being reported to the IRS. It would also assess the systems and infrastructure the agency would require if Congress later approves a formal exemption for everyday crypto payments.
The issue has become increasingly significant for crypto exchanges and users. Kraken recently revealed that it submitted approximately 56 million crypto-related tax forms for the 2025 tax year, with the majority tied to transactions valued below $50.
Stablecoins And Staking Rules Included
The bill also introduces a proposed tax framework for regulated dollar-backed stablecoins. Under the proposal, digital dollars used primarily for payments would receive tax treatment similar to cash, while still including safeguards to prevent misuse for trading or arbitrage purposes.
Additional sections of the PARITY Act address taxation surrounding staking rewards, mining income, crypto lending, professional trading activity, and wash-sale regulations.
Lawmakers behind the bill said it aims to solve the so-called “phantom income” issue faced by miners and stakers by allowing taxpayers to choose when rewards become taxable.
Separate reports previously noted that 18 bipartisan lawmakers had already urged the IRS to reconsider its 2023 crypto staking guidance ahead of the 2026 tax season. The PARITY Act would reportedly allow taxpayers to defer taxation on staking and mining rewards under certain conditions.
Congress Continues Expanding Crypto Policy Efforts
The legislation arrives as Congress continues reviewing multiple crypto-related regulatory measures.
Bloomberg Tax recently reported that lawmakers finalized portions of the digital asset tax proposal as momentum around crypto legislation continues to build in Washington.
The tax debate is also unfolding alongside broader discussions around crypto market structure regulation. Earlier reports noted that the Senate Banking Committee advanced the CLARITY Act in a 15-9 vote, bringing a wider crypto oversight framework closer to a Senate vote.
Meanwhile, Coinbase disclosed spending more than $1 million on lobbying efforts during the first quarter of 2026, with filings related to digital asset taxation, stablecoin regulation, and the CLARITY Act.
