The PARITY Act landed in Washington. And Bitcoin miners? They didn’t make the cut.
US Representatives Max Miller and Steven Horsford unveiled the Digital Asset PARITY Act on Friday. The bill promises a cleaner tax framework for digital assets. But it quietly leaves out proof-of-work mining, and the Bitcoin community is not staying quiet about it.
What the PARITY Act Actually Does
The bill covers a few key areas. First, it offers a de minimis tax exemption. Stablecoin payments under $200 won’t trigger a capital gains calculation, provided the coin stays within 1% of its dollar peg. That’s a practical fix for everyday crypto spending.
Second, it targets staking income. Passive participants in proof-of-stake networks can now defer taxes on their rewards. The taxable moment shifts to when they actually sell the asset. That solves a real problem the industry calls “phantom income,” where validators owe taxes on tokens they can’t easily sell.
The bill also closes the crypto wash sale loophole. Traders can no longer dump a losing position, claim the deduction, and immediately buy back the same asset. That change alone brings crypto closer to how stocks are treated.
On paper, it reads like progress.
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Why Bitcoin Miners Are Furious
Here’s the problem. That staking deferral applies only to proof-of-stake validators. Bitcoin miners, who secure the network through proof-of-work, get nothing comparable.
Miners face the same phantom income issue. They receive Bitcoin rewards that they can’t always liquidate to cover immediate tax bills. The PARITY Act acknowledges this problem for stakeholders and fixes it. For miners, it does nothing.
The Bitcoin Policy Institute (BPI) called this out directly. In a statement on X, the organization described the arrangement as a “two-tier tax regime.” Their argument is simple. If Congress fixes phantom income for one group, it needs to fix it for both. Picking winners based on the underlying technology is not a neutral policy.
BPI’s Demand: Fix This Before It Passes
The BPI isn’t just criticizing. It’s pushing specific changes.
The group wants lawmakers to broaden the de minimis exemption beyond stablecoins. Under the current draft, Bitcoin payments remain a tax headache. Every time an American uses Bitcoin to buy a coffee, they owe the IRS a report. Under current law, Bitcoin is classified as property, meaning every transaction triggers a capital gains calculation, no matter how small.
BPI also wants the staking deferral extended to all block-reward recipients, miners included. That’s the core ask.
BPI warns that with midterm politics approaching and Senator Lummis set to leave the Senate in January 2027, the window for comprehensive digital asset tax reform may close if Congress doesn’t act before an expected legislative push in August 2026.
That’s a tight window. And the stakes are high.
What’s at Stake Globally
This isn’t just a US story. Bitcoin mining is a global industry. The US has become one of the world’s largest mining hubs since China’s 2021 crackdown. If Washington creates a tax structure that disadvantages miners, operations will shift. To cheaper jurisdictions, friendlier regulators, and countries that don’t tax phantom income at all.
The Bitcoin Policy Institute argued that, left unchanged, the draft could disadvantage proof-of-work systems and shift innovation offshore. For international observers, that scenario isn’t hypothetical. It’s happened before.
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Senator Lummis Has a Different Plan
Not everyone in Congress is on the PARITY Act’s side. Senator Cynthia Lummis introduced a standalone bill that would create a $300 per-transaction threshold with a $5,000 annual cap and address mining and staking taxation. Her version covers more ground. It tackles miner taxation directly and even includes wash sale rules.
The Joint Committee on Taxation scored the Lummis bill as revenue-positive, generating roughly $600 million over ten years. That matters in Washington. A bill that raises revenue is easier to sell.
Where This Heads Next
Representative Miller has described the PARITY Act as a work in progress and has signaled openness to revision. That’s encouraging. But openness isn’t a commitment. BPI is pushing hard, meeting with congressional offices across party lines, and making the case that a stablecoin-only framework doesn’t serve the broader crypto economy.
Bitcoin was trading around $66,000 at the time of writing, down nearly 4% in 24 hours. Regulatory uncertainty rarely helps prices.
What is the PARITY Act?
It’s a US legislative draft introduced by Representatives Max Miller and Steven Horsford. It proposes tax reforms for digital assets, including a stablecoin exemption for small payments and deferred taxes for proof-of-stake staking rewards.
Why are Bitcoin miners excluded from PARITY Act tax relief?
The bill’s deferral provision covers only proof-of-stake validators. Bitcoin’s proof-of-work miners face the same phantom income problem but receive no equivalent relief under the current draft.
What is the Bitcoin Policy Institute asking for?
BPI wants Congress to extend the staking deferral to miners and broaden the de minimis exemption beyond stablecoins so that Bitcoin payments are also covered.
Could this affect Bitcoin mining outside the US?
Potentially yes. If the US tax framework penalizes proof-of-work mining, operations could relocate to countries with less restrictive rules, which has happened before in other regulatory environments.
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