Crypto: Stablecoins Finally Creep Closer to Cash
The tax issue in the U.S. is relatively straightforward: cryptocurrencies are generally treated as property. As a result, spending a digital asset is considered a taxable event, even when simply paying for a product. This setup becomes particularly absurd with a $1 stablecoin, where the capital gain or loss may amount to only a few cents.
This reform proposal comes as Washington has already established an initial federal framework for stablecoins with the GENIUS Act. Daines now wants to adapt the tax code to this emerging payment infrastructure.
The bill proposes that payments made with certain qualified dollar-pegged stablecoins would benefit from a special treatment where minor fluctuations around $1 would no longer trigger a taxable gain or loss. Drafts of the text condition this protection on the token maintaining a close enough parity with the U.S. dollar.
Another highly practical provision is that network fees of up to $10 per transaction could be exempt from capital gains calculations. Currently, spending tiny fractions of ETH or other crypto to pay gas fees theoretically requires a separate tax calculation. The bill aims to eliminate this disproportionate paperwork.
For crypto payments, this change would be far from cosmetic. It would lower one of the primary hurdles currently preventing stablecoins from operating as seamless digital dollars for everyday commerce.
The Trade-Off: Applying the Wash-Sale Rule
However, the draft bill is not entirely favorable to crypto holders.
Daines also plans to apply a rule well known to stock investors to digital assets: the wash-sale rule. Currently, this federal rule targets stocks and certain securities, but generally does not apply to Bitcoin or Ether. Consequently, crypto investors can sell an asset at a loss to harvest tax benefits and immediately buy back the same position.
This loophole could soon disappear.
The reform would extend wash-sale rules to most digital assets. Under these rules, a tax loss would be disallowed if an investor repurchases the same asset, or one considered substantially identical, within the legally defined window—traditionally 30 days before or after the sale.
This represents a major shift for crypto tax-loss harvesting.
The industry was already discussing this tightening at a time when the crypto lobby was also demanding a clear tax framework for staking. Senator Daines’ logic is broader: facilitating distinct utility use cases for blockchain while applying principles similar to traditional finance to investment activities.
The Senator made this clear back in July during a Finance Committee hearing: when cryptos behave like stocks or commodities, the framework should utilize familiar rules such as wash sales, constructive sales, and potentially mark-to-market. Conversely, when technology introduces new paradigms—such as stablecoins, staking, or network fees—the Tax Code must adapt.
The text also contains provisions addressing mining, staking, lending, certain investment funds, and digital asset donations.
The Bill Must Still Pass Congress
A major gap remains between this announcement and actual tax policy: Congress has yet to act.
The House is already moving forward with its own bill. On September 16, the Ways and Means Committee approved the Digital Asset Tax Certainty Act with a bipartisan 38–5 vote. This version also extends wash-sale rules to digital assets and provides several tax reliefs for stablecoins, crypto lending, network fees, staking, and mining.
The Senate is now working on its own architectural framework.
These legislative maneuvers follow the failure of the CLARITY Act during a procedural vote on September 15. The bill fell short with only 49 votes in favor and 50 against, whereas 60 were needed to proceed. However, tax policy could follow a different path, as the House version has already secured bipartisan support in committee.
The stakes go beyond the tax bills of individual traders.
While the GENIUS Act progressively addresses who can issue a stablecoin and under what backing guarantees, Daines’ bill tackles the other half of the equation: what are the tax implications when an American actually uses that stablecoin to buy something?
Until now, the answer was needlessly complicated.
This explains why stablecoins are taking an increasingly central role in 2026 crypto narratives. A tokenized dollar cannot scale as a mainstream payment method if buying a coffee requires calculating cost basis and capital gains over a few pennies.
The Daines proposal attempts to eliminate this friction while simultaneously closing the tax loophole crypto traders currently enjoy with wash sales.
Thus, it is less of a broad « tax gift » to the crypto space and more of a trade-off: making everyday transactions simpler while bringing crypto speculation closer to the rules that govern Wall Street.
