Senate Republicans Introduce ADAPT Act to Overhaul Crypto Tax Code
A Senate Republican bill aims to overhaul how the US tax code treats stablecoin payments, staking, mining, lending and digital-asset trading. The Aligning Digital Assets with Principles of Taxation Act (ADAPT Act), introduced by Senator Steve Daines on September 30, is a 56-page legislation that attempts to resolve longstanding problems created by applying traditional property and securities tax rules to blockchain transactions.
The bill creates targeted exceptions while extending several anti-tax-avoidance rules to digital assets. It would exempt consumers from recognizing gains or losses when using qualifying regulated US dollar stablecoins for goods and services, as well as provide relief from certain broker information-reporting requirements for eligible transactions.
The ADAPT Act also addresses 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, removing the requirement to calculate tiny taxable gains or losses whenever cryptocurrency is spent simply to execute an onchain transaction.
The bill 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 US intermediaries would receive treatment modeled on existing securities and commodities safe harbors.
The ADAPT Act also closes the wash-sale loophole in crypto by restricting investors from selling cryptocurrency at a loss, claiming that loss for tax purposes, and quickly repurchasing substantially identical assets. This would apply to taxable years or transactions occurring after December 31, 2026.