PAR Act

Key Points

• The bill updates the tax code so digital assets like Bitcoin and Ethereum get treated more like stocks and bonds. It creates clear definitions and rules for how crypto is taxed, replacing the current patchwork of unclear guidance.
• Professional crypto dealers and traders can elect to use "mark to market" accounting, meaning they report gains or losses based on the market value of their holdings at the end of each year, even if they did not sell. This aligns crypto tax treatment with how securities dealers are already taxed.
• The bill allows tax-free lending of digital assets, similar to existing rules for stock lending. Transfers of traded digital assets under lending agreements would not trigger a taxable event, making it easier for institutions to lend and borrow crypto.
• A safe harbor protects foreign investors who trade digital assets through U.S.-based brokers from being classified as conducting a U.S. trade or business, which could otherwise trigger U.S. tax obligations.
• "Widely traded digital assets" are defined as those with a market cap over $500 million, available on exchanges for a full year, and with no single owner holding more than 10%. This threshold is inflation-adjusted starting after 2027.
• The Treasury could treat qualified U.S. dollar stablecoins as actual dollars for tax purposes, simplifying reporting for millions of everyday transactions. The bill ties stablecoin definitions to the GENIUS Act framework.