Senate Crypto Tax Bill Could Make Stablecoins Easier to Spend
A new Senate bill would remove a tax obstacle from everyday stablecoin payments while closing one of crypto traders' most useful tax-loss strategies.
Summary:
- Everyday stablecoin use could require less tax accounting under the proposed rules.
- Tax-loss harvesting would become harder for crypto traders who quickly rebuild sold positions.
- Small blockchain fees receive separate relief, targeting another source of disproportionate recordkeeping.
Sen. Steve Daines unveiled the 56-page ADAPT Act on Sept. 30, proposing that qualifying stablecoin payments avoid recognition of small gains or losses. The legislation would separately exempt certain crypto-paid network and transaction fees of $10 or less, while extending wash-sale rules to most digital assets.
The bill arrives after Daines spent more than a year developing a digital-asset tax framework and after the House advanced its own crypto tax package earlier this month. His approach is now moving from policy framework to legislative text.
Stablecoins Have a Checkout Problem
Using a stablecoin to buy something can create tax administration that paying with ordinary dollars does not.
Digital assets are generally treated as property for U.S. federal tax purposes. A disposition can therefore require calculation of gain or loss.
That makes sense when an investor buys Bitcoin for $50,000 and later sells it for $60,000. There is an obvious $10,000 economic gain.
The mechanics become much less intuitive for a dollar-pegged stablecoin.
Suppose someone acquires 20 stablecoins at $1 each and later spends them when their tax basis and market value differ by only fractions of a cent. The economic result may be negligible, yet the transaction can still create recordkeeping around basis and disposal.
Daines’ legislation targets that mismatch by providing relief for qualifying stablecoin payments.
It is a relatively small tax change with a potentially larger payments consequence: stablecoins become easier to use repeatedly rather than simply easier to hold.
The $10 Rule Solves a Different Crypto Problem
The ADAPT Act contains another de minimis provision that should not be confused with its stablecoin treatment.
Certain network and transaction fees paid in crypto would receive gain-or-loss relief when the fee is $10 or less.
Consider someone moving an asset between wallets and paying a $3 network fee using crypto that originally cost slightly less.
Without specialized treatment, using that crypto to pay the fee can itself create another disposition that must be tracked. Under the proposed exemption, qualifying fees below the threshold would no longer require that gain-or-loss calculation.
The tax saved on an individual transaction may be tiny.
The paperwork avoided across thousands of blockchain transactions is the more relevant effect.
Daines had already identified network fees as one of the blockchain-specific activities requiring tailored treatment when he presented his tax framework to the Senate Finance Committee in July.
Crypto’s Wash-Sale Advantage Would Shrink
Traders receive less favorable treatment elsewhere in the bill.
Daines proposes extending wash-sale rules to digital assets, bringing crypto closer to the framework already applied to stocks and securities.
The strategy affected is straightforward.
An investor buys a crypto asset for $50,000. Its value falls to $35,000. The investor sells, realizes a $15,000 loss, then quickly repurchases the asset and restores essentially the same market exposure.
READ MORE: Hong Kong Expands Crypto Oversight to Audits and Financial Reporting
Crypto’s treatment outside the traditional wash-sale regime has historically made that type of tax-loss harvesting possible in circumstances where an equivalent securities trade would face restrictions.
The proposed rules would limit that advantage.
For traditional securities, the wash-sale period covers purchases of substantially identical assets within 30 days before or after the loss-making sale. The House’s parallel digital-asset proposal explicitly extends that framework to covered crypto assets.
That would make the timing of crypto tax-loss harvesting an investment decision rather than an almost immediate sell-and-rebuy exercise.
Stablecoins Are Treated Differently for a Reason
There is an important detail inside the wash-sale debate: qualifying U.S. dollar stablecoins do not necessarily create the same tax-loss harvesting concern as volatile assets.
Testimony submitted to the Senate Finance Committee explained the logic directly. Payment stablecoins covered by the GENIUS Act are designed around a fixed monetary value, reducing the rationale for applying wash-sale restrictions intended to stop investors from realizing losses while retaining essentially unchanged investment exposure.
Bitcoin presents a very different economic case.
A BTC investor may have substantial unrealized gains or losses. A dollar-backed payment token is designed specifically to avoid those large price movements.
Taxing both instruments identically simply because both exist on blockchains can therefore create rules poorly matched to what each asset does.
The Bill Reaches Beyond Payments and Wash Sales
Daines’ framework also covers staking, lending, constructive sales, investment trusts, passive validation activity and charitable contributions.
For assets functioning more like conventional investments, he has proposed familiar mechanisms including constructive-sale rules and an elective mark-to-market regime alongside wash-sale treatment.
For blockchain-native activities, the approach becomes more specialized.
That structure is consistent with what Daines told the Senate Finance Committee in July: the objective is not simply to give digital assets preferential treatment, but to apply conventional tax principles where the economic activity is conventional and create specific rules where blockchain produces transactions the existing code was not designed to handle.
The Senate Now Has Its Own Crypto Tax Package
The ADAPT Act also gives the Senate a legislative counterpart to work already underway in the House.
The House Ways and Means Committee advanced its broader digital-asset tax package earlier in September. That legislation similarly addresses wash sales, stablecoins, staking, lending, accounting and small network fees. Its $10 fee exemption, for example, would remove gain-or-loss recognition for qualifying crypto-paid transaction costs at or below that amount.
Daines had circulated his Senate draft by Sept. 25, when his office said formal introduction was expected the following week.
Today’s unveiling moves that process forward, but none of these proposed changes are current tax law.
The Senate legislation still faces the congressional process, and differences between House and Senate approaches could have to be resolved before a final measure reaches the president.
Stablecoin Policy Is Moving From Issuers to Users
The tax proposal lands as another part of Washington’s stablecoin framework moves toward implementation.
The GENIUS Act established a federal framework for payment stablecoins, and regulators are now developing rules around issuers. On Sept. 24, the Federal Reserve proposed new requirements for dollar-backed stablecoin issuance under that regime.
Tax policy tackles a different bottleneck.
Reserve requirements and issuer supervision determine whether a stablecoin can operate inside a regulated financial system. They do not determine whether paying for lunch with that token leaves its owner calculating tiny gains or losses.
The ADAPT Act moves onto that user side of the equation.
For stablecoins, the consequence could be practical rather than spectacular. Removing small tax calculations will not make Americans abandon cards or bank transfers overnight.
But if dollar-backed tokens are supposed to become payment instruments, making routine payments feel less like taxable investment transactions is one of the obstacles Congress eventually has to solve.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Kosta Gushterov
Reporter at CoinsPress
Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP. Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem. To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem. His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.
