Bipartisan House lawmakers introduced the PARITY Act this week to study tax exemptions for small crypto transactions. The bill would treat regulated stablecoins as cash and apply wash sale rules to crypto trades.
How Millions of Tiny Trades Clog Systems
Kraken reported submitting 56 million tax forms to the IRS last year. Over 75 percent covered transactions under $50. Nearly a third involved amounts under $1. That flood of microscopic trades creates a reporting nightmare for both users and the IRS.
Stablecoins as Cash, Not Assets
The legislation would let regulated payment stablecoins count as cash for tax purposes. Users wouldn't report gains or losses unless cost basis falls below 99 percent of redemption value. This change could simplify everyday stablecoin use for payments.
Wash Sale Rules Coming to Crypto
Stock traders can't claim loss deductions if they repurchase an asset within 30 days. Crypto traders currently avoid this rule. The PARITY Act would close that loophole, treating crypto transactions like traditional securities for wash sales.
Midterm Deadline Looms
Representatives Horsford, DelBene, Miller and Carey aim to pass the bill before Congress adjourns in January 2027. They'll need to move before November's midterms complicate negotiations. The Treasury Department would then have 180 days to study implementation.
