US lawmakers have introduced the Adjusting Digital Asset Principles Tax Act, or ADAPT Act, a proposal to reshape how digital assets are taxed by separating treatment according to how they are used. Rather than applying a single framework across the sector, the bill sets out distinct rules for activities including mining, staking, lending, and decentralized finance, while also importing tax concepts more commonly associated with traditional assets.

The measure would also create targeted exemptions for certain everyday crypto transactions. Under the proposal, gains or losses tied to qualifying dollar-based stablecoins used to buy goods or services would not be taxed, and small transaction-fee amounts of $10 or less would not trigger recognition of gains or losses.

A narrower tax approach by activity

At its core, the ADAPT Act is designed to match tax treatment more closely to the economic role a digital asset plays in a transaction. The bill would establish separate rules for key crypto-related activities instead of treating the category as a single uniform asset class.

The proposal specifically addresses mining, staking, digital-asset lending, DeFi, and donations. It also would apply wash-sale and mark-to-market principles, an effort aimed at bringing crypto taxation closer to the rules already used for more traditional financial assets.

Stablecoin and fee exemptions

One of the bill’s most concrete changes concerns stablecoins used in ordinary payments. Qualifying dollar-based stablecoins spent on goods or services would be exempt from tax on resulting gains or losses, a change that would remove a tax consequence from some payment activity.

The legislation also targets minor operational transactions by excluding small transaction-fee values from gain-or-loss recognition. The threshold in the bill is $10 or less, limiting the need to calculate tax outcomes on very small fee amounts.

Reporting friction and administrative burden

If enacted, the bill could ease some of the record-keeping and compliance strain that has accompanied digital-asset taxation in the US. The source article says the proposal may help address problems linked to the 1099-DA reporting regime and situations where cost-basis information is incomplete.

The ADAPT Act also would allow brokers to elect mark-to-market taxation. Supporters of the broader approach argue that aligning tax rules with actual crypto use cases could reduce mismatches between reporting requirements and the way participants transact on-chain.

Contrast with South Korea’s slower framework

The US proposal arrives as South Korea is still working through its own crypto tax framework. According to the source article, South Korean officials have been building that system since 2020, but critics say it still falls short of the realities of the industry.

Those concerns are especially focused on mining, staking, and DeFi. Critics argue that tax rules should classify digital-asset income by its economic substance, rather than placing all such income under a miscellaneous category.

What comes next

For now, the ADAPT Act is a legislative proposal, not enacted law. The next confirmed step is consideration of the bill through the US lawmaking process, while debate is likely to center on whether use-based tax treatment can better reflect how digital assets function in practice.

The comparison with South Korea underscores the wider policy question facing regulators and tax authorities: whether crypto activity should be handled under broad catch-all rules or under more tailored categories tied to specific economic functions.

Source: en.bloomingbit.io