Daines' ADAPT Act Proposes Sweeping Crypto Tax Reforms

The Aligning Digital Assets with Principles of Taxation Act (ADAPT Act), proposed by Sen. Steve Daines on September 30, aims to introduce specific federal tax rules for various digital-asset transactions.

The bill targets stablecoin payments, small blockchain fees, wash sales, staking, mining, and lending. It would provide tax relief for qualifying US dollar stablecoin payments used to purchase goods and services, with conditions determining which stablecoins and transactions qualify.

Qualifying coins would need to stay close to USD 1, with a framework using a range of nearly 3% around that level. The bill would also change the treatment of small blockchain transaction costs, exempting qualifying networks, transactions, or gas fees of USD 10 or less from taxable treatment.

The ADAPT Act extends wash-sale rules to digital assets, restricting loss deductions after certain rapid sales and repurchases. It addresses eligible dealers and traders who could elect mark-to-market accounting under the proposal. The bill also includes rules for staking and mining rewards, charitable donations of widely traded digital assets, and foreign investors trading through US brokers.

The legislation must advance through the Senate before moving through the broader congressional process. Most ADAPT Act provisions target tax years beginning after 2026, which could place some changes in 2027. Until Congress changes federal law, current tax requirements remain in effect.