U.S. Congress Advances a Bipartisan Crypto Tax Bill: Why the PARITY Act Could Be the Next Major Step After the CLARITY Act
U.S. Congress Advances a Bipartisan Crypto Tax Bill: Why the PARITY Act Could Be the Next Major Step After the CLARITY Act
On May 30, U.S. lawmakers signaled that digital asset tax reform will only move forward if it is bipartisan—a realistic constraint in a Congress where crypto policy is increasingly viewed as “must-pass” infrastructure for innovation rather than a partisan wedge. Recent reporting indicates House tax leaders are reluctant to advance any digital asset tax package without meaningful cross-party support, because a narrow vote today could mean an unstable rulebook tomorrow. A durable framework matters when markets are 24 / 7, global, and composable across protocols.
Against that backdrop, Representatives Steven Horsford, Max Miller, Suzan DelBene, and Mike Carey have introduced the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act (PARITY Act)—a proposal designed to modernize U.S. crypto tax rules, reduce ambiguity for both consumers and intermediaries, and better align digital asset taxation with how crypto is actually used in Web3 and DeFi today. For a reference copy of the legislative discussion text that has circulated publicly, see the PARITY Act discussion draft hosted on a U.S. House website: Digital asset tax bill discussion draft (PDF).
While the CLARITY Act is widely discussed as the centerpiece of U.S. crypto market structure reform, the reality is simple: even perfect market structure rules won’t solve the everyday pain points users face if tax policy remains unclear or mismatched with onchain behavior. That is why the PARITY Act is being watched as a potential “next pillar” of U.S. digital asset legislation.
Why crypto tax policy is suddenly a priority
Over the last two years, U.S. policy momentum has shifted from “Should we regulate crypto?” to “What exactly should we regulate, and how do we implement it without breaking innovation?”
Two forces have accelerated that shift:
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Information reporting is becoming real, not theoretical.
The IRS is rolling out Form 1099-DA, the dedicated information return for digital asset dispositions. Official IRS background and updates are available here: About Form 1099-DA and Understanding your Form 1099-DA. The IRS has also published updates related to broker reporting rules: Final regulations and related IRS guidance for reporting by brokers on sales and exchanges of digital assets. -
Crypto usage has moved beyond “buy and hold.”
Staking, liquid staking derivatives, lending, stablecoin payments, perpetuals, and structured products are no longer edge cases. Yet tax rules still struggle with basic questions like when staking rewards are recognized, or whether a low-value stablecoin payment should trigger gain / loss calculations.
In other words: enforcement is becoming more standardized, while the underlying tax logic is still lagging behind how crypto actually works.
The PARITY Act in plain English: what it tries to fix
The PARITY Act’s core goal is not to “cut crypto taxes.” It’s to make crypto taxation administrable, predictable, and harder to game—while reducing compliance friction for ordinary users.
Below are several provisions that matter most to real-world crypto participants (and why).
1) A “small payments” approach for regulated payment stablecoins
One of the most practical frictions in crypto taxation is the “coffee problem”: if you use crypto as a payment rail, each spend can be a taxable disposal. That’s not only cumbersome—it discourages legitimate payment use.
The PARITY Act discussion draft outlines a policy direction that would create a per-transaction de minimis threshold of $200 for certain regulated payment stablecoin transactions, aiming to reduce nuisance gain recognition for routine consumer payments. See the explanatory section in the PARITY Act discussion draft (PDF).
Why users care:
- This could make stablecoin payments more viable for everyday commerce.
- It also pushes the policy conversation toward distinguishing between payments-focused stablecoins and volatile assets used primarily for investment.
2) A staking / mining election to address “phantom income”
Staking rewards create a recurring tax headache: users may receive tokens without selling them, but still face tax liability depending on interpretation—especially painful in volatile markets.
The discussion draft describes a staking / mining-related election intended as a compromise between immediate taxation and full deferral until disposal. In the draft’s described approach, a taxpayer could elect to defer recognition of “awards” for up to five taxable years, with income recognized later based on fair market value at the time of recognition. Details are in the PARITY Act discussion draft (PDF).
Why users care:
- It explicitly targets the cash-flow mismatch that staking can create.
- It acknowledges staking as a mainstream activity rather than a niche edge case.
3) Bringing “wash sale” style logic to digital assets
Traditional securities have wash sale rules that limit tax-loss harvesting games. Crypto markets—especially on centralized venues—have historically been able to replicate similar economic behavior without the same constraints.
The draft includes language expanding wash sale concepts to “specified assets,” including digital assets. See wash sale references in the PARITY Act discussion draft (PDF).
Why users care:
- This could change common strategies used by active traders.
- It also signals that Congress is attempting to align crypto market behavior with long-standing tax integrity principles.
4) Digital asset lending rules that resemble securities lending—with guardrails
DeFi and CeFi lending blur the line between a loan and a sale. The discussion draft aims to extend nonrecognition principles (similar to traditional securities lending) to certain bona fide lending of fungible, liquid digital assets, while excluding higher-risk categories (like illiquid assets or instruments with valuation / manipulation concerns). See the lending section in the PARITY Act discussion draft (PDF).
Why users care:
- Properly designed, this can reduce accidental taxable events caused by lending mechanics.
- But the exclusions also hint at future lines regulators may draw around what counts as “safe” lending activity.
5) Addressing sophisticated gain-deferral strategies (“constructive sales”)
As crypto derivatives mature, it becomes easier to lock in gains using hedges while delaying taxes—something traditional tax rules already attempt to restrict in other asset classes.
The draft’s “constructive sales” policy direction would aim to treat certain offsetting transactions as constructive sales of digital assets when they effectively eliminate risk of loss and opportunity for gain. See the constructive sale section in the PARITY Act discussion draft (PDF).
Why users care:
- Mostly relevant to advanced traders and funds.
- But it indicates lawmakers are trying to keep the crypto tax base from being eroded as onchain and offchain derivatives expand.
How PARITY fits with CLARITY and GENIUS: a three-layer framework
U.S. crypto regulation is increasingly converging toward a layered model:
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Stablecoin rules (money-like instruments)
The GENIUS Act is widely referenced as the federal stablecoin framework already enacted, with public summaries available from the Senate Banking Committee, such as this GENIUS Act fact sheet (PDF). -
Market structure rules (who regulates what, and how trading venues operate)
The CLARITY Act (H.R. 3633) is designed to clarify oversight between agencies (notably the CFTC and SEC) and define a compliant pathway for digital commodity markets. A nonpartisan overview is available from the Congressional Research Service: CRS overview of H.R. 3633 (CLARITY Act). The House Financial Services Committee has also emphasized CLARITY’s bipartisan momentum in official communications, e.g. Chairmen Hill and Thompson statement on market structure progress. -
Tax rules (how gains, yields, reporting, and everyday use are treated)
This is where the PARITY Act aims to become the missing piece: rules that match how crypto is used, without waiting for years of case-by-case IRS guidance.
If CLARITY defines “what the asset is” and “who regulates the market,” PARITY is trying to define “how the activity is taxed”—including staking yields, stablecoin payments, lending, and trading strategies.
What crypto users should do now (before any bill becomes law)
Legislation takes time. But the compliance environment is already tightening, particularly through standardized reporting.
Practical steps that help most users today:
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Assume reporting expectations will increase—especially for brokered activity.
Even if you do not receive a form, the IRS is explicit that taxpayers must report digital asset transactions. Start with the IRS’s own explanations: Understanding your Form 1099-DA. -
Separate wallets by purpose (investment vs. spending vs. DeFi).
Clean wallet hygiene reduces accounting ambiguity and helps you answer basic questions later: Which address was a long-term hold? Which was active trading? Which interacted with lending protocols? -
Treat stablecoin activity as “not automatically tax-free.”
Even if lawmakers add a targeted de minimis rule later, it may apply only to defined categories (for example, “regulated payment stablecoins”) and may include limits or conditions. -
Track staking and validator-related activity carefully.
The PARITY Act’s staking election concept exists because this is one of the most confusing areas for taxpayers. Whether or not it passes, staking income will remain a compliance focus.
Where OneKey fits: self custody as a compliance and risk-management choice
As U.S. rules become clearer, more users will likely choose a hybrid approach: some activity on regulated platforms (for fiat ramps and liquidity), and more long-term holdings in self custody.
A hardware wallet like OneKey can support that shift by keeping private keys offline and enabling transaction signing with physical confirmation—helpful for users who want to reduce counterparty exposure while maintaining clear control over onchain addresses and activity patterns. OneKey also emphasizes a transparent security model, including open-source verification resources in its public documentation.
Ultimately, tax clarity won’t remove market risk—but it can reduce “rules risk.” And in a world moving toward standardized reporting (1099-DA) and broader federal legislation, clean operational habits and strong self-custody practices are becoming part of responsible crypto participation.
Disclaimer: This article is for general informational purposes only and does not constitute tax, legal, or investment advice. Digital asset tax rules can change, and their application depends on individual facts and jurisdiction. Consider consulting a qualified tax professional for guidance tailored to your situation.
