Sen. Steve Daines released a 56-page tax bill on Sept. 30 that would exempt payments made with qualified US dollar stablecoins from capital gains recognition, while leaving Bitcoin spending fully inside the existing IRS reporting regime.

The bill, titled the Aligning Digital Assets with Principles of Taxation (ADAPT) Act, lists Sens. Cynthia Lummis, Bernie Moreno and Tim Scott of South Carolina as cosponsors. Bloomberg Law reported on Sept. 25 that Daines had circulated a draft and expected to introduce it the following week.

Under current IRS guidance, paying for goods or services with any digital asset counts as a disposition, regardless of amount. The IRS itself uses a coffee purchase as its example: a $5 Bitcoin payment with an allocated basis of $3 produces a $2 capital gain that must appear on the return. Under the Daines bill, the same $5 coffee paid with a qualifying stablecoin would fall outside gain-or-loss recognition — but the same purchase in Bitcoin would still trigger cost-basis calculation and capital gain or loss reporting.

What qualifies as a covered stablecoin?

The proposed section 1034 of the tax code would treat dispositions of covered payment stablecoins to buy products or services as nonrecognition events. The relief covers gain or loss on the token itself; sales taxes and other purchase obligations remain in place.

Eligibility is strict:

• The token must be a qualified US dollar stablecoin issued by a permitted payment stablecoin issuer under the GENIUS Act.
• A foreign issuer qualifies through OCC registration or a Treasury finding that its home regime is comparable.
• The token must appear in Treasury's most recent quarterly report, and the taxpayer must have acquired it within 3% of $1.00.
• Traders, brokers and dealers are excluded, along with taxpayers using a non-dollar functional currency.

Treasury would publish the qualifying list at least every three months, covering each qualified stablecoin actively traded within 3% of $1.00 during the trailing 12 months. Users and payment companies would check the latest list when making purchases. Brokers could rely on customer certifications and skip verifying the 3% acquisition test for tokens bought elsewhere, and covered payments would be exempt from broker information returns under section 6045(i)(1). Taxpayers must still keep records distinguishing eligible payments from other transactions.

Does Bitcoin get any relief?

A Bitcoin payment at checkout remains a taxable disposition under section 1034. But the bill's section 11 adds a narrower carve-out under new section 1044: coins disposed of to pay digital asset transaction costs would escape gain-or-loss recognition when the aggregate value of the assets used for those costs is $10 or less.

Base, gas and priority fees count as costs, and related transactions are aggregated. The exclusion does not apply to traders, brokers and dealers, businesses that batch or validate transactions for others, mark-to-market assets, or anyone who initiated more than 5,000 digital asset transactions in the prior taxable year. On a Bitcoin coffee purchase, the sliver of BTC paid as a network fee could qualify for relief, while the coins sent to the merchant remain taxable. The bill also exempts qualified dollar stablecoins from the wash-sale and constructive-sale rules it extends to other digital assets.

How does this compare with earlier proposals?

Previous bills used monetary thresholds rather than asset-based eligibility. Sen. Ted Budd's S.4171, introduced March 24, requires both transaction value and recognized gain or loss to be $200 or less. Lummis's S.2207, unveiled in July 2025, sets a $300 ceiling and ends exclusions once annual qualifying gains exceed $5,000. The House PARITY Act proposed a $200 threshold for stablecoin transactions. The House has also advanced H.R.10357, introduced Sept. 14, which the Ways and Means Committee approved 38-5 on Sept. 16.

Both the stablecoin relief and the $10 fee exception would apply to transactions entered into starting Jan. 1, 2027. Until Congress acts, current IRS treatment stays in force, and which tokens qualify will ultimately follow issuer approvals under the GENIUS Act.