Republican Senator Steve Daines of Montana has released the Aligning Digital Assets with Principles of Taxation Act, or ADAPT Act, a legislative proposal designed to establish clearer tax rules for digital assets. The bill is co-sponsored by Senators Cynthia Lummis, Pete Moreno, and Tim Scott.
"Digital assets have moved into the mainstream, but the tax code hasn't kept up," Daines said in announcing the proposal. "My bill would create clearer rules for stablecoins, network fees, staking and lending — while extending familiar tax rules like wash sales and constructive sales to digital assets."
Stablecoin Tax Relief
The proposal provides tax relief for everyday stablecoin transactions. Spending a qualifying dollar stablecoin on goods or services would not trigger capital gains or losses, and brokers would not be required to report those transactions.
To qualify for this treatment, a stablecoin must be issued under the GENIUS Act framework, appear on a quarterly Treasury list of coins that have remained within 3% of $1.00, and have been purchased by the user within 3% of $1.00.
Gas Fees and Network Transactions
Network and gas fees paid in cryptocurrency would be treated as tax-free dispositions if the fees for a given transaction total $10 or less, subject to anti-structuring rules.
Wash Sale Rules Extended to Crypto
The bill would apply wash sale rules to digital assets for the first time. These rules bar investors from claiming a tax loss if they sell an asset and buy it back within 30 days. Stock investors have long been subject to these restrictions, but cryptocurrency traders previously could sell at a loss and immediately rebuy.
The wash sale rules would apply to traded digital assets other than qualified stablecoins. Assets purchased before the bill becomes law would be grandfathered, and staking rewards, mining rewards, and regular recurring purchases would be exempt.
Tokenized versions of stocks would be classified as "substantially identical" to the underlying shares.
Legislative Process
The ADAPT Act must be approved by committee before it can advance to a full Senate vote.
