Crypto Tax Bill: The Foundation of U.S. Digital Asset Legislation?

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Rep. Horsford Says Crypto Tax Bill Is Foundation as CLARITY Stalls

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Rep. Steven Horsford said crypto tax policy should be treated as the “foundation” of U.S. digital asset legislation.
Horsford said CLARITY Act talks in the Senate appear to be “on hold” despite recent bipartisan negotiations.
The PARITY Act seeks tax clarity for stablecoin payments, staking, mining, lending, wash sales and Bitcoin donations.

Congressman Steven Horsford believes that setting clear tax rules for cryptocurrency should be the first step in creating a comprehensive plan for digital assets in the U.S. He cautioned that any broader regulations for the crypto market will be incomplete if Congress doesn’t first define how these assets are taxed.

At Consensus Miami 2026 on Tuesday, Horsford noted that the U.S. has seen some advancement following the passage of the GENIUS Act and the House’s progress on the CLARITY Act. He added that the CLARITY Act still needs to be finalized in the Senate, as negotiations are ongoing.

Representative Horsford mentioned that he voted for and supported the GENIUS Act last year. He also stated that the CLARITY Act, which establishes the rules and regulations for this, is currently being considered by the Senate.

As a crypto investor, I was really interested to see the GENIUS Act become law on July 18, 2025. Basically, it sets up federal rules for how payment stablecoins – you know, those cryptos pegged to things like the dollar – are regulated. It’s a big step towards clarity for the whole space.

Horsford Says CLARITY Act Talks Are Not Done

I was glad to see the CLARITY Act pass in the House, but I’m keeping a close eye on the Senate version. Honestly, the specifics they decide on there are crucial. It’ll really determine if this law actually benefits everyone – us as investors, the companies building things in crypto, and the bigger financial institutions too.

As an analyst, I’m following this closely. I’ve been a supporter of this legislation when it was considered in the House, but now we’re really focused on what happens in the Senate. To be frank, we’re currently waiting for the Senate to take action on the bill.

He highlighted the attempts by Senators Thom Tillis and Angela Alsobrooks to find common ground, but noted that even those negotiations seem to be stalled.

Representative Horsford expressed satisfaction that Senators Tillis and Alsobrooks attempted to negotiate, but noted that even those talks appear to have stalled.

These comments follow an agreement between Tillis and Alsobrooks regarding rewards for stablecoins within the CLARITY Act. This was a major point of contention between banks and cryptocurrency companies. The deal would limit stablecoin rewards that function like traditional bank interest, but still permit rewards based on user activity.

PARITY Act Framed as Crypto Tax Foundation

Horsford believes that instead of creating new crypto laws alongside GENIUS and CLARITY, tax rules should be the foundation for encouraging the use of digital assets. He argues tax policy isn’t a separate piece of legislation, but rather the underlying support for crypto adoption.

According to Horsford, taxation is crucial. He believes tax policies will ultimately decide how digital assets are integrated into our financial system.

Congressman Horsford is collaborating with Representative Max Miller on the PARITY Act, a bill designed to update how the federal government taxes digital assets like cryptocurrencies. They released a draft of the bill in December 2025 to reflect modern practices in this growing financial area.

The legislators stated that the proposed legislation aims to reduce unnecessary burdens on those following the rules, close loopholes that allow for misuse, and clarify tax laws as they apply to digital assets.

According to Horsford, current tax rules don’t provide clear guidance on how digital asset transactions are taxed. This includes selling crypto, earning rewards through staking, lending cryptocurrency on U.S. platforms, or donating Bitcoin to charity. These are all common tax questions that currently lack definitive answers.

Bill Targets Stablecoins, Lending, Wash Sales and Staking

A current proposal for the PARITY Act addresses small gains or losses when trading certain stablecoins. Specifically, it won’t tax minor profits or losses from buying or selling qualifying dollar-backed stablecoins if the price stays close to $1.

The proposal also covers how taxes will apply to lending digital assets, expands existing rules about selling and repurchasing assets (like stocks) to include digital assets, and provides details on how to handle tax implications for staking and mining cryptocurrencies.

Horsford explained that this bill isn’t intended to fix all crypto tax problems right away. Instead, it aims to establish a solid, long-term system before the crypto market grows even more.

According to Horsford, we need to learn from the mistakes of 1986, when Congress failed to establish clear rules for how derivatives are taxed. He emphasized the need for clear, predictable, and certain laws in this area.

IRS Readiness Becomes a Central Concern

Horsford also raised concerns about whether the IRS has the resources and ability to manage the complicated new rules for reporting digital assets.

He asked how many people thought the IRS was ready to handle the growing world of digital assets. He stated that the answer was, in fact, none of them, and that was the truth.

He explained that the unclear tax rules for cryptocurrency are causing problems right now during tax season. People who use digital currencies are getting tax forms that the agency may not be equipped to handle efficiently, either with enough staff or the right technology.

According to Horsford, the IRS is overwhelmed by the sheer number of forms being sent to people who use digital assets, and they don’t have enough staff to handle it all.

According to Horsford, the PARITY Act would strengthen Congress’s direction to Treasury and regulators, while still allowing for updates as technology evolves.

Crypto Framed as Wealth Gap Issue

Horsford explained his backing of the crypto legislation by highlighting its potential to broaden economic access. He believes digital assets can empower communities that are currently underserved by traditional banks and investors, allowing them to create wealth and new opportunities.

He believes digital assets like cryptocurrency and Bitcoin could fundamentally change the economy, creating a truly equal opportunity for everyone.

He explained that his interest in cryptocurrency started after hearing from people at town hall meetings who asked him about Bitcoin and other digital currencies.

“I wasn’t familiar with things like cryptocurrency or Bitcoin,” Horsford explained. “It was actually my community members asking me about my views during town hall meetings that made me start learning about it.”

Nevada’s Democratic representative encouraged people and businesses involved with cryptocurrency to keep communicating with members of Congress while they discuss new laws about taxes, stablecoins, and how the market operates.

Horsford explained that the work isn’t finished and encouraged everyone to remain involved and up-to-date.

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2026-05-05 21:28