Bipartisan House Lawmakers Unveil Crypto Tax Framework with Stablecoin Safe Harbor, Staking Deferral

Two bipartisan House lawmakers have released a draft tax framework for digital assets that would create a safe harbor for certain stablecoin transactions and offer a compromise on when staking rewards should be taxed, Bloomberg reported Saturday.

Rep. Max Miller (R-Ohio) and Rep. Steven Horsford (D-Nev.), both members of the House Ways and Means Committee, unveiled the Digital Asset PARITY Act. The discussion draft would exempt transactions involving regulated, dollar-pegged stablecoins worth less than $200 from capital gains taxes—a provision designed to eliminate compliance burdens on everyday purchases. The safe harbor would not extend to other cryptocurrencies.

“Like any emerging technology, cryptocurrencies need guardrails that allow innovation to grow while protecting consumers and the integrity of our tax system,” Rep. Horsford told KOLO. “Today, even the smallest crypto transaction can trigger tax calculation while other areas of the law lack clarity and invite abuse.”

To qualify for the safe harbor, stablecoins must be issued by a permitted issuer under the GENIUS Act, be pegged solely to the U.S. dollar, and have maintained a price within 1% of $1.00 for at least 95% of trading days in the prior 12 months. Brokers and dealers are excluded from the exemption.

The draft notes that lawmakers are still evaluating whether to impose an annual aggregate cap to prevent the provision from sheltering investment gains.The bill’s most notable provision addresses when mining and staking rewards should be taxed, a politically fraught question that has divided lawmakers.

Under Biden-era IRS guidance reaffirmed in October 2024, rewards are taxed as income when received. Sen. Cynthia Lummis (R-Wyo.), a Capitol Hill crypto champion who recently announced she will not seek re-election, introduced legislation in July that would defer taxation until rewards are sold.

The Miller-Horsford bill charts a middle path: taxpayers could elect to defer tax on rewards for five years, after which they would be taxed as ordinary income at fair market value. The draft legislation describes the approach as “a necessary compromise between immediate taxation upon dominion & control and full deferral until disposition.”

The Trump administration has signaled support for crypto tax relief, though Lummis’s attempt to include a $300 de minimis provision in the reconciliation bill failed to secure enough votes.

The draft extends several existing securities tax rules to digital assets. It would apply wash sale rules to cryptocurrencies—preventing investors from selling at a loss and immediately repurchasing to claim a deduction—and extend constructive sale rules that prevent strategies to lock in gains while deferring tax liability.

The bill would also extend securities-lending tax principles to qualifying digital asset loans, making crypto lending a non-taxable event for fungible, liquid assets. Non-fungible tokens and illiquid assets would be excluded.

Professional traders could elect mark-to-market accounting, and the draft would waive qualified appraisal requirements for charitable contributions of digital assets with market capitalizations exceeding $10 billion. A separate provision clarifies that passive, protocol-level staking by investment funds does not constitute a trade or business.

A spokesperson for Horsford told Bloomberg that “the hope is that the committee will work together in good faith to set these critical rules of the road.”

The stablecoin provision would take effect for taxable years beginning after December 31, 2025. Miller said last week he believes the broader bill can advance before August 2026.

Terron Gold