Bitcoin Policy Institute Voices Strong Opposition to PARITY Act

Core Viewpoint - The introduction of the Digital Asset PARITY Act aims to clarify the U.S. tax code regarding digital assets, addressing various aspects of taxation and regulation in the digital asset space [1]. Tax Code Refinements - The Digital Asset PARITY Act seeks to refine the Internal Revenue Code of 1986 with specific provisions for digital assets [4]. - Key provisions include: - Stablecoin Treatment: Gains or losses on regulated payment stablecoin transactions will be eliminated if the price deviation from the dollar peg is within 1% [4]. - Foreign Safe Harbor: Extends existing safe harbor provisions for foreign investors to digital assets, ensuring trades within U.S. accounts of foreign investors are not subject to U.S. tax [4]. - Lending Treatment: Taxpayers will not recognize capital gains or losses when transferring digital assets under lending agreements, similar to securities [4]. - Wash Trading Treatment: Wash trading prohibitions will be extended to all digital assets, not just stocks or securities [4]. - Staking Tax Treatment: Allows "passive stakers" to defer tax consequences on income earned from staking digital assets [4]. Industry Opposition - The Bitcoin Policy Institute (BPI) opposes the staking tax provisions, arguing that the act favors proof-of-stake networks and lacks technological neutrality regarding proof-of-work networks like Bitcoin [3][4].