The Digital Asset PARITY Act is a bipartisan discussion draft that looks to update parts of the U.S. tax code so they better reflect how digital assets are used today. The proposal focuses on clarifying tax treatment and supporting compliance for consumers, investors, and businesses.
What is the PARITY Act?
The PARITY Act is a discussion draft released by Congressman Max Miller and Congressman Steven Horsford. It proposes targeted amendments to federal tax rules that apply to digital assets, including how gains, losses, income, and reporting are handled.
Rather than creating a new tax system for crypto, the proposal builds on existing tax principles and applies them more clearly to digital asset activity, particularly payments and market transactions.
What the proposal covers
The discussion draft focuses on several areas, including:
Why the PARITY Act was introduced
Supporters of the proposal argue that unclear tax rules can make it harder for people and businesses to use digital assets responsibly. They point to small payment transactions that can create unexpected tax burdens, as well as other areas that lack clarity and lead to inconsistent reporting.
The PARITY Act is intended to reduce confusion for routine activity while strengthening rules around more complex transactions.
How PARITY fits into the broader policy landscape
The PARITY Act is part of a broader effort to clarify how digital assets are treated under U.S. law. Unlike proposals that focus on banking, custody, or market structure, this draft is focused specifically on tax treatment and reporting.
What comes next
The PARITY Act remains a discussion draft and may change as lawmakers review feedback. Any updates to tax treatment would require congressional action, followed by regulatory guidance.
If enacted, the Treasury Department would issue guidance explaining how the updated rules apply and how they interact with existing tax law.
“Like any emerging technology, cryptocurrencies need guardrails that allow innovation to grow while protecting taxpayers and the integrity of our tax system. “Today, even the smallest crypto transaction can trigger tax calculation, while other areas of the law lack clarity and invite abuse. Our discussion draft of the Digital Asset PARITY Act takes a targeted approach that provides an even playing field for consumers and businesses alike to benefit from this new form of payment.”