- Bipartisan lawmakers introduced a new bill on digital asset taxation.
- Reps. Max Miller (R-Ohio) and Steven Horsford (D-Nev.) sponsored the new bill.
- Only stablecoins issued by a permitted issuer under the GENIUS Act will qualify for the safe harbor.
According to a report, U.S. lawmakers have introduced a bipartisan discussion draft on digital asset taxation that would create a safe harbor for certain stablecoin transactions and offer a compromise for taxing staking rewards.
The Digital Asset PARITY Act
The report reveals that the draft was sponsored by Rep. Max Miller (R-Ohio) and Rep. Steven Horsford (D-Nev.), both of whom are members of the House Ways and Means Committee. It aims to introduce a law that would exempt transactions involving regulated, dollar-pegged stablecoins worth less than $200 from capital gains taxes.
According to analysts, this provision, if passed, would eliminate compliance burdens on everyday purchases. However, the proposed safe harbor would apply only to the designated stablecoins and not extend to other cryptocurrencies.
Discussing the bill, Rep. Horsford noted that cryptocurrencies, like any emerging technology, need guardrails that enhance innovation, allowing it to grow while protecting consumers and the integrity of the U.S. government’s tax system. According to him, the bill aims for an adjustment that will change the current situation where even the smallest crypto transaction can trigger tax calculation, while other areas of the law lack clarity and invite abuse.
Who Qualifies for the Proposed Tax Structure?
It is worth noting that brokers and dealers are exempt from this bill. Meanwhile, only stablecoins issued by a permitted issuer under the GENIUS Act will qualify for the safe harbor. Such digital assets must be pegged solely to the U.S. dollar, and must have maintained a price within 1% of $1.00 for at least 95% of trading days in the prior 12 months.
The bill further proposes that taxpayers could elect to defer rewards from mining and staking for five years, after which they could be taxed as ordinary income at fair market value. This aims to resolve a lasting debate among lawmakers over an earlier bill that the pro-crypto Senator Cynthia Lummis introduced in July.
Fed Calls for Public Input
In the meantime, the U.S. Federal Reserve has requested public input on a “payment account” for eligible financial institutions to use strictly for clearing and settling their payments. According to a press release, the new payment account would be tailored to meet the limited needs of eligible financial institutions seeking payments and settlement services.
Related Articles: Michael Saylor Calls on US Government to Create Formal Crypto Taxonomy
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Source: https://coinedition.com/u-s-house-lawmakers-introduce-safe-harbor-bill-for-stablecoins-and-staking/
