Two US House members have released a bipartisan discussion draft of the Digital Asset PARITY Act, proposing a $200 de minimis tax exemption for stablecoin transactions while explicitly excluding Bitcoin, setting up a direct clash with a competing Senate bill that would cover all cryptocurrencies.
Rep. Max Miller (R-OH) and Rep. Steven Horsford (D-NV) published the draft on December 20, 2025. The full name of the proposal is the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act, or PARITY Act.
The bill arrives as Bitcoin trades at $65,843, down 3.74% over 24 hours, with the Crypto Fear & Greed Index sitting at 13, deep in "Extreme Fear" territory. Regulatory uncertainty around crypto taxation is compounding existing bearish sentiment, echoing the kind of investor caution that recently drove Bitcoin ETF outflows of $171 million.
What the PARITY Act Proposes
The PARITY Act's central provision is a $200 de minimis exemption for everyday stablecoin transactions. Under this rule, dollar-pegged stablecoins would be exempt from capital gains or losses treatment as long as their cost basis fluctuates no more than 1%, or $0.01 per token.
Bitcoin and all other non-stablecoin cryptocurrencies are explicitly excluded from this exemption. Every transaction in those assets, regardless of size, would remain a taxable event.
The bill also targets a long-standing loophole. It would apply wash sale rules to crypto for the first time, requiring traders to wait 30 days before reclaiming tax losses on repurchased assets. Stock investors have faced this restriction for decades; crypto traders currently do not.
Staking, lending, and validator service income would be taxed as gross income annually at fair market value. This provision would affect the growing number of crypto holders earning yield on their holdings, particularly as institutional players continue accumulating Bitcoin through various strategies.
Rep. Horsford framed the bill as closing gaps in existing tax law while reducing burdens on small transactions.
The Digital Asset PARITY Act is a joint effort by @RepMaxMiller & me to bring clarity & common-sense guardrails to our tax policy around crypto. Right now, even the smallest crypto transaction can trigger significant taxes, while other areas of the law have gaps welcoming abuse.…
— Rep. Steven Horsford (@RepHorsford) December 20, 2025
Source: @RepHorsford on X
The PARITY Act is currently a discussion draft only. It has not yet been formally introduced to Congress.
How the PARITY Act Differs From the Lummis Bill
The PARITY Act is not the only crypto tax proposal on the table. Senator Cynthia Lummis has put forward a competing bill with a broader $300 de minimis exemption and a $5,000 annual cap. Unlike the PARITY Act, the Lummis bill is not limited to stablecoins and would cover Bitcoin and other major cryptocurrencies.
The difference in scope is the key fault line. The PARITY Act treats stablecoins as functionally equivalent to cash for small transactions, while leaving all volatile crypto assets under full taxation. The Lummis bill treats all digital assets more uniformly, offering relief for everyday spending regardless of the token used.
Both proposals share the goal of reducing friction for small crypto transactions. But they diverge sharply on which assets deserve that relief, a split that mirrors a deeper divide within the crypto industry itself.
The PARITY Act's stablecoin exemption specifically requires compliance with the already-enacted GENIUS Act stablecoin framework. This ties the tax benefit to regulatory compliance, creating an incentive structure that favors regulated stablecoin issuers. A third proposal, the CLARITY Act, adds further complexity to the legislative landscape, as regulatory developments continue to reshape digital asset markets.
Industry Split on Bitcoin's Exclusion
The decision to exclude Bitcoin from the de minimis exemption has divided the crypto industry. Cody Carbone, CEO of the Digital Chamber, has expressed support for the PARITY Act's approach. Bitcoin-focused advocates see it differently.
"It's Bitcoin that should have a de minimis tax exemption. Stablecoins are not decentralized."
Pierre Rochard, CEO of Bitcoin Bond Company, via CoinTelegraph
The Bitcoin Policy Institute has aligned with the Lummis bill's broader approach, arguing that Bitcoin's role as a decentralized payment network makes it a stronger candidate for transaction tax relief than centralized stablecoins.
According to unconfirmed reports, the White House has indicated that President Trump supports a tax exemption for small Bitcoin and crypto transactions, which could influence how the competing proposals are reconciled.
What Crypto Investors Should Watch
Congress is targeting August 2026 as the legislative window for crypto tax reform. Between now and then, the PARITY Act and Lummis bill will need to be formally introduced, debated in committee, and potentially reconciled.
Several details remain unresolved. The PARITY Act's annual cap for its de minimis exemption is described as "still to be determined" in the draft, and the full text of the discussion draft has not been publicly released.
No bill is law until signed. Current crypto tax rules, which treat every transaction as a taxable event with no de minimis exemption, remain in effect. Investors should not adjust their tax reporting based on either proposal.
KEY TAKEAWAYS
- The PARITY Act proposes a $200 de minimis exemption for stablecoin transactions only. Bitcoin and other cryptocurrencies are excluded, while the competing Lummis bill offers a broader $300 exemption covering all digital assets.
- New wash sale rules would close a crypto-specific loophole. Traders would need to wait 30 days before reclaiming tax losses, matching rules that already apply to stocks.
- Nothing has changed yet. Both proposals are in early stages, with August 2026 as the target for legislative action. Current tax rules remain in effect.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.