U.S. lawmakers propose tax exemption for small stablecoin payments
A bipartisan House bill would exempt everyday stablecoin purchases under $200 from capital gains tax, aiming to make crypto usable for daily payments instead of just investing.
Paying with crypto in the U.S. sounds modern, but in practice it can be stressful. Buy a coffee with a stablecoin, and you may still owe capital gains tax. Even tiny price changes can turn simple payments into tax paperwork. For regular users, that friction has made crypto feel more like an investment tool than real money.
That frustration is the backdrop for a new proposal coming out of the U.S. House of Representatives.
David Adubiina
Why are U.S. lawmakers targetting small, everyday payments?
A new bipartisan draft bill in the U.S. House proposes a tax “safe harbor” for certain stablecoin transactions. The idea is if you use a regulated, dollar-pegged stablecoin to make a small purchase, you shouldn't have to calculate capital gains every time.
The draft, called the Digital Asset PARITY Act, was introduced by Representative Max Miller, a Republican from Ohio, and Representative Steven Horsford, a Democrat from Nevada. Both lawmakers sit on the House Ways and Means Committee, which handles tax policy. Their proposal would exempt stablecoin payments under $200 from capital gains tax, as long as the stablecoin meets strict rules.
Which stablecoins would qualify for safe harbor?
The safe harbor would only cover stablecoins issued by permitted issuers under existing U.S. frameworks, including the proposed GENIUS Act. To qualify, the stablecoin must be backed only by U.S. dollars and must have stayed within 1% of its $1 value for at least 95% of the past year’s trading days.
Bitcoin, Ether, and other volatile cryptocurrencies wouldn't qualify. Brokers and dealers would also be excluded, meaning the rule is meant for consumers, not traders or institutions. Lawmakers have said they're still discussing whether to add an annual cap so the exemption cannot be used to avoid taxes on large-scale activity.
Right now, the IRS treats most crypto spending as a taxable event. That means even buying lunch can trigger a reporting obligation. Lawmakers behind the draft argue this discourages real-world use and pushes crypto further into speculation instead of payments.
David Adubiina
Horsford has said the goal isn't to weaken tax enforcement, but to make the rules practical. The proposal tries to draw a line between everyday spending and investment behavior, something crypto tax policy has struggled with for years.
The draft bill also tackles another long-running debate: when staking and mining rewards should be taxed. Under current IRS guidance, rewards are taxed as soon as they are received, even if they are not sold. Industry groups and some lawmakers have argued this is unfair.
Instead of taxing rewards immediately or waiting until they are sold, the draft proposes a compromise. Taxpayers could choose to defer taxes on staking and mining rewards for up to five years. At the end of that period, the rewards would be taxed as ordinary income based on their market value. Lawmakers describe this as a balance between clarity and fairness.
What this safe harbor bill could mean next?
The stablecoin safe harbor would apply to tax years starting after December 31, 2025. Representative Miller has said parts of the broader legislation could move forward before mid-2026, though nothing is final yet.
Taken together, the proposal signals a shift in tone. Instead of treating every crypto action as a complex tax event, lawmakers are starting to recognize how people actually use digital money. If passed, the bill would not turn stablecoins into tax-free tools, but it would remove one of the biggest barriers to using them for everyday payments. That could bring crypto a step closer to daily life, not just trading screens.
David Adubiina
