Senate Republicans have formally introduced a 56-page cryptocurrency tax bill that would overhaul how the U.S. tax code treats stablecoin payments, staking, mining, lending and digital-asset trading.
Senator Steve Daines of Montana introduced the Aligning Digital Assets with Principles of Taxation Act, or ADAPT Act, on September 30, joined by Republican Senators Cynthia Lummis, Tim Scott and Bernie Moreno.
The legislation attempts to resolve a longstanding problem created by applying tax rules written for conventional property and securities to blockchain transactions.
Under current federal treatment, disposing of cryptocurrency can create a taxable event even when the asset is being used for a routine transaction. The ADAPT Act would create targeted exceptions while simultaneously extending several traditional anti-tax-avoidance rules to digital assets.
It remains proposed legislation. The provisions do not change taxes currently owed and would require congressional approval before becoming law.
Stablecoin Payments and $10 Gas Fees Get Relief
One of the bill’s most significant provisions concerns stablecoins.
Consumers generally would not recognize a gain or loss when using qualifying regulated U.S. dollar stablecoins to purchase goods and services. Eligible transactions would also receive relief from certain broker information-reporting requirements.
The exemption is not designed as a blanket tax exclusion for stablecoin trading. It applies to qualifying payment transactions, while traders and dealers are excluded.
The legislation separately tackles one of crypto’s smallest but most persistent tax complications: blockchain transaction fees.
Digital assets used to pay qualifying network, transaction or gas fees of $10 or less would generally receive gain-or-loss recognition relief. That could remove the requirement to calculate tiny taxable gains or losses whenever cryptocurrency is spent simply to execute an onchain transaction.
The bill also establishes sourcing rules for staking and mining income and extends existing securities-lending nonrecognition treatment to qualifying digital-asset lending arrangements.
Eligible digital-asset dealers and traders could elect mark-to-market accounting, while certain foreign investors trading digital assets through U.S. intermediaries would receive treatment modeled on existing securities and commodities safe harbors.
Wash-Sale Loophole Would Close
The bill is not exclusively tax relief for crypto users. It would extend the tax code’s wash-sale rules to digital assets, restricting investors from selling cryptocurrency at a loss, claiming that loss for tax purposes and quickly repurchasing substantially identical assets.
Crypto has historically sat outside the securities-specific wash-sale regime, creating a tax-loss harvesting opportunity unavailable for many conventional investments. The ADAPT Act would also extend constructive-sale rules to digital assets and apply existing tax principles to other areas where lawmakers believe crypto functions similarly to securities or commodities.
Daines had previewed that approach months before formally introducing the legislation. During a July Senate Finance Committee hearing, he said his framework would apply conventional tax principles where digital assets resemble existing financial instruments while creating tailored treatment for stablecoin payments, network fees, staking and other blockchain-specific activity.
The Senate proposal follows separate action in the House. The House Ways and Means Committee advanced its own digital-asset tax package in September, creating overlapping proposals that Congress would ultimately need to reconcile if legislation advances.
Most ADAPT Act provisions would apply to taxable years or transactions occurring after December 31, 2026, although individual sections contain different effective-date rules.
The bill therefore represents a potentially significant second front in Washington’s crypto legislation.
While recent congressional battles have focused largely on which agencies regulate digital-asset markets, the ADAPT Act addresses what happens afterward: how Americans are taxed when they spend, stake, lend, mine or trade digital assets.
