As Congress continues to discuss how to regulate digital assets, efforts to update cryptocurrency tax policy are moving forward quickly, reports Reuters. Tom Shea, EY Americas Crypto and Digital Asset Tax Leader, says the proposed Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields (PARITY) Act could move ahead on its own, apart from the larger market-structure bills currently under debate. 

Representatives Max Miller and Steven Horsford introduced the PARITY Act to tackle several tax issues connected to digital assets. Shea said the bill uses definitions from the earlier GENIUS Act, which means it does not need to wait for Congress to complete the Digital Asset Market Clarity Act that would create a broader regulatory system for digital assets. 

A key part of the bill would make it easier to handle taxes on certain regulated, dollar-pegged stablecoins by treating them more like cash. Under this proposal, taxpayers would not usually have to report gains or losses on qualifying stablecoin transactions unless the asset’s value drops below 99% of its redemption value. 

The legislation also addresses other longstanding areas of uncertainty, including staking rewards, wash sale rules, securities lending and mark-to-market elections for digital asset traders. Shea said the industry increasingly expects wash sale rules to be extended to digital assets, while questions surrounding staking rewards and de minimis exemptions for everyday transactions remain subjects of debate. 

Even though more people want to follow the rules, Shea pointed out that many taxpayers still find digital asset reporting difficult because the rules are unclear and reporting tools are limited.