Senator Daines unveiled the ADAPT Act, a draft crypto tax bill that would exempt qualifying stablecoin purchases and small crypto-denominated transaction fees from capital-gains recognition while extending wash-sale rules to digital assets, according to reporting from The Defiant.

The bill introduces a two-track framework. The first track delivers payment relief. The second closes a tax-avoidance loophole long available to digital-asset traders.

What would the ADAPT Act change?

The legislation targets two friction points in the current Internal Revenue Code treatment of digital assets. Under longstanding IRS guidance, crypto is treated as property, so every disposition can trigger a taxable event.

Under the first provision, qualifying stablecoin purchases would escape gain-or-loss recognition. The exemption would apply to transactions in stablecoins that meet defined reserve and redemption criteria, with the bill expected to specify those technical thresholds.

The carve-out would primarily benefit payment processors, remittance operators and merchants accepting stablecoins at point of sale, where current rules require tracking cost basis on each transaction.

The second provision creates a de minimis threshold of $10 for crypto-paid transaction costs. Fees paid in digital assets at or below that level would not generate a taxable disposition, easing friction for users paying network or service fees in tokens.

What is the wash-sale gap?

Section 1091 of the Internal Revenue Code disallows losses on the sale of a security when the same or substantially identical security is purchased within 30 days before or after the sale. The rule prevents taxpayers from harvesting artificial losses to offset gains without altering their economic position.

Cryptocurrencies, classified as property rather than securities under IRS Notice 2014-21, fall outside Section 1091. Traders can sell a token at a loss and immediately repurchase it, booking the loss for tax purposes while maintaining identical market exposure.

The gap has become one of the more widely cited advantages in digital-asset markets, particularly during volatile periods when short-term price swings create repeated harvesting opportunities.

The ADAPT Act's loss-harvesting restriction would close that gap. The mechanism has not been detailed in the public summary, but the stated intent is to align crypto treatment with securities for the purpose of loss disallowance.

What are the operational consequences?

The combination is unusual: a bill that simultaneously loosens one tax burden and tightens another.

Stablecoin-rail operators and payment processors would benefit because their user-facing flows generate fewer taxable events, lowering the administrative cost of stablecoin integration. Trading desks, algorithmic strategies and retail tax-loss harvesting services would face reduced flexibility and likely reprice their offerings.

Treasury and IRS implementation would be the next pressure point. De minimis thresholds require definitions of qualifying stablecoins, transaction contexts and reporting infrastructure.

Wash-sale enforcement across hundreds of digital assets and dozens of exchanges presents a matching and reporting problem. Securities markets have solved it through broker 1099-B forms and cost-basis tracking, but crypto markets have not standardized equivalent infrastructure.

What comes next?

The ADAPT Act enters a Congress that has produced several crypto-policy frameworks in recent sessions without completing any comprehensive tax overhaul. The bill's pairing of relief and restriction may improve its chances with skeptical committees.

Its path through the House Ways and Means Committee and Senate Finance Committee remains untested. The market will watch for a markup date, a formal score from the Joint Committee on Taxation and any amendments that narrow or widen the stablecoin definition.