Senate crypto tax bill would exempt eligible stablecoin spending

Senator Steve Daines introduced legislation on September 30 that would exempt qualifying dollar-stablecoin purchases of goods and services from federal gain-or-loss recognition while bringing most traded digital assets under wash-sale and constructive-sale restrictions.

The Aligning Digital Assets with Principles of Taxation Act, or ADAPT Act, would also create limited relief for small blockchain transaction fees and establish tax rules for digital-asset lending, staking, mining, dealers and investment vehicles. The proposal matters because it separates regulated payment stablecoins from volatile crypto assets instead of applying one transaction rule across both categories.

Nothing changed for taxpayers when the text was introduced. The measure still requires congressional approval and enactment, and its provisions could be amended or removed during that process.

Stablecoin relief has eligibility conditions

The bill would prevent recognition of a gain or loss when a covered payment stablecoin is sold, exchanged or otherwise disposed of to purchase a product or service. It would also remove broker information-return requirements for transactions receiving that treatment.

Eligibility would depend on more than a token’s dollar label. The stablecoin would need to satisfy the bill’s definition of a qualified U.S. dollar stablecoin, appear in Treasury’s latest qualifying report and have been acquired by the taxpayer within 3% of $1.

Treasury would publish that report at least once every three months. To qualify for a report, a stablecoin would need to have traded actively within 3% of $1 during the 12-month period ending on the final day of the preceding month. The measurement tests price stability over that trailing window; it does not guarantee redemption, reserve quality or future price stability.

The exemption would not apply to stablecoin traders, brokers or dealers, or to taxpayers and qualified business units whose functional currency is not the U.S. dollar. Taxpayers would still need records distinguishing eligible transactions from those outside the exemption.

Bitcoin spending would retain its existing treatment

The proposal does not provide the same purchase exemption for bitcoin or other floating-price assets. Current IRS guidance says exchanging virtual currency held as a capital asset for goods or services produces a capital gain or loss measured against the asset’s adjusted basis. That treatment would remain for ordinary bitcoin purchases under the bill.

A separate provision would cover the assets used to pay certain blockchain costs. No gain or loss would be recognized when the aggregate fair-market value of digital assets disposed of for transaction costs connected to the same economic transaction is $10 or less. The value would be measured at the date and time of disposition.

Covered costs would include network, gas, base and priority fees, commissions, transfer taxes and similar expenses incurred to execute or record a digital-asset transaction. Anti-avoidance language would aggregate related transactions structured to stay below the $10 ceiling, limiting the usefulness of splitting one activity into smaller payments.

The proposal also closes trading-tax gaps

The ADAPT Act would extend federal wash-sale rules to traded digital assets other than qualified dollar stablecoins. Those rules can defer a loss when substantially identical property is reacquired around a loss-producing sale. The draft includes exceptions for certain assets received through network validation and some regular or periodic acquisitions recognized as ordinary income.

It would also apply constructive-sale provisions to digital assets other than qualified dollar stablecoins and treat economically equivalent tokenized or bridged assets as substantially identical to their referenced property in specified circumstances. These sections aim to align crypto trading with anti-abuse rules already used for conventional financial assets.

Other provisions would extend securities-lending-style nonrecognition treatment to qualifying digital-asset loans, permit eligible dealers and traders to elect mark-to-market accounting, and address the sourcing of mining and staking income. Those changes carry separate definitions and effective dates and should not be read as a universal exemption for crypto income.

Enactment is the next required step

The stablecoin-payment and network-fee provisions would apply to transactions after December 31, 2026, but only if the proposal becomes law. The date in the draft is not a promise that Congress will finish the legislation before then.

Daines released the bill on September 30; independent reporting analyzed the text on October 1; Coinburn is reporting it on October 2. No cryptocurrency price, market return or trading-volume claim is used in this article.

The next verifiable milestones are formal committee consideration, amendments, a cost estimate and votes in both chambers. Until enactment, users of digital assets remain subject to current law and IRS guidance rather than the proposed exclusions.