Congress on verge of making regulated dollar stablecoins act almost like digital cash

Washington isn't trying to solve every crypto policy fight at once, but it appears to be carving out a workable path for one specific category of digital asset: the regulated, dollar-pegged stablecoin. The GENIUS Act established the first federal regulatory framework for payment stablecoins, and a bipartisan House tax discussion draft now proposes friendlier tax treatment for those same tokens when people actually use them. Together, the two efforts point toward a deliberate, stablecoins-first lane in American crypto policy that could reshape how users, merchants, and issuers interact with digital dollars in the years ahead. What the stablecoin tax draft actually proposes The draft legislation is the Digital Asset PARITY Act , a bipartisan discussion draft first released in December 2025 by Representatives Max Miller (R-Ohio) and Steven Horsford (D-Nevada), both members of the House Ways and Means Committee. An updated version was re-released on March 26, 2026, with significant revisions to its core stablecoin provision. In the revised March draft, gains from selling a “regulated payment stablecoin” generally wouldn't be included in gross income, and losses wouldn't be recognized, unless the taxpayer's basis in the token falls below 99% of its redemption value. For exchanges, the recipient would take a deemed basis of $1. To qualify, the stablecoin must be issued by a permitted payment stablecoin issuer under the GENIUS Act, pegged only to the US dollar, and have demonstrated tight price stability over the prior 12 months. Brokers and dealers are excluded. For ordinary people, this means spending a qualifying dollar stablecoin could stop triggering a small, irritating tax event every time the token's value drifts a fraction of a cent. The draft is trying to give stable, regulated dollar tokens the kind of practical flexibility that cash already enjoys, rather than subjecting every micro-fluctuation to the capital gains framework applied to volatile crypto assets. This is a narrow carve-out for tokens that behave, by design and by regulation, as digital representations of the dollar. Why the GENIUS Act is the foundation The tax draft can't be understood in isolation because its scope is explicitly tied to the regulated stablecoin category that the GENIUS Act already created. That law, which passed the Senate 68-30 and the House 308-122 with substantial bipartisan support, established who can issue payment stablecoins in the United States, what reserves they must hold, and what compliance obligations they must meet. It requires 100% reserve backing with liquid assets, subjects issuers to Bank Secrecy Act obligations, and mandates all kinds of anti-money-laundering and sanctions compliance programs. The regulatory machinery behind this new draft is already moving. The OCC proposed its implementing rules in early March 2026, covering standards for reserves, capital, liquidity, and risk management. Treasury and FinCEN/OFAC followed in April with a joint proposed rule establishing anti-money-laundering and sanctions compliance requirements for permitted payment stablecoin issuers. The FDIC has also begun laying out application procedures for FDIC-supervised institutions seeking to issue payment stablecoins through subsidiaries. The tax draft's own explanatory notes acknowledge that its narrow focus on regulated payment stablecoins follows existing statute, specifically citing the GENIUS Act. Congress appears to be building in sequence: first define the legal stablecoin, then make it practical to use. No stablecoin issuer has received formal “permitted payment stablecoin issuer” status yet, because the regulatory machinery is still being assembled, and final implementing rules aren't required until July 2026. But the leading candidates are already visible. Circle's USDC is the clearest frontrunner: the company already publishes monthly reserve attestations verified by a Big Four accounting firm, holds reserves in US Treasuries and cash at regulated banks, and operates under existing state money transmitter licenses. USDC is widely expected to meet GENIUS Act compliance requirements without any major structural changes. Rather than restructuring USDT for US compliance , Tether took a different route by launching USA₮ in January 2026 through Anchorage Digital Bank , creating a separate US-compliant token rather than restructuring its offshore flagship. The GENIUS Act also opened a door that didn't previously exist for traditional banks. Any FDIC-insured institution can now apply to issue payment stablecoins through a subsidiary, and some major players are already exploring that path. JPMorgan's blockchain arm Kinexys has been developing a deposit token aimed at institutional on-chain settlements, and Bank of America has publicly described stablecoin regulation as the beginning of a multi-year shift toward on-chain banking. If those efforts produce tokens that qualify under the GENIUS Act's framework, they would also