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The bill proposes exempting dollar-pegged stablecoins from gains or losses if the tokens remain tightly pegged to the underlying fiat currency.US Representatives Max Miller and Steven Horsford published a discussion draft bill on Thursday titled the ‘‘Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act’’ or the ‘‘Digital Asset PARITY Act,” to overhaul the tax code for digital assets.
The Digital Asset PARITY Act seeks to overhaul the Internal Revenue Code of 1986 by adding provisions that would clarify the tax treatment of digital assets. The legislation said that stablecoins are not subject to gains if the cost basis, or the amount paid by the investor, does not fluctuate by more than 1% of $1 or $0.01, according to the discussionThe bill also introduces a de minimis tax exemption for stablecoin transactions below $200, meaning that stablecoin transactions below the $200 threshold do not trigger tax or reporting requirements. A total annual exemption cap is yet to be determined. Income from lending, staking or income earned through “passive” validator services is treated as part of the recipient's gross income every year, and calculated using “fair market” value, the draft said. The Digital Asset PARITY Act has not yet been introduced to Congress; it was published as a discussion draft to open up debate between lawmakers, stakeholders and the crypto industry about how to Rep. Steven Horsford, pictured center, and Rep. Max Miller, pictured right, speak about the future of crypto policy at the DC Blockchain Summit. Source:“We need digital asset tax clarity or activity will never fully onshore,” Cody Carbone, the CEO of crypto advocacy organization Digital Chamber,“This is the wrong direction to go in,” Pierre Rochard, CEO of The Bitcoin Bond Company, a BTC financial product issuer, said about the draft. “It’s Bitcoin that should have a de minimis tax exemption. Stablecoins are not decentralized, and they are not permissionless. They’re not real money; they’re just fiat,” he added.Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently. Read our Editorial Policy
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