CryptoSlate
A $5 coffee bought with an eligible dollar stablecoin would not trigger recognition of a gain or loss under the ADAPT Act released by Sen. Steve Daines on Sept. 30. The same purchase made with Bitcoin would remain a taxable disposition. The proposal would take effect for covered transactions starting Jan. 1, 2027; current IRS rules remain in force unless it becomes law.
Why it matters
Under current IRS guidance, spending a digital asset counts as disposing of it, requiring holders to calculate any gain or loss against their cost basis. The Daines bill would remove that calculation for purchases of goods and services made with covered payment stablecoins, regardless of purchase size. Sales taxes and other purchase obligations would still apply.
Eligibility has limits. A stablecoin would need to meet the bill's issuer requirements, appear on a Treasury list published at least quarterly, and have been acquired by the taxpayer within 3% of $1.00. Traders, brokers and dealers in qualified dollar stablecoins would not receive the relief. Taxpayers would need records separating eligible payments from other transactions.
Market impact
The proposal draws a sharp line between using a qualifying stablecoin and spending Bitcoin at checkout. A $5 Bitcoin purchase with a $3 allocated cost basis would still produce a $2 capital gain to report. A separate provision would exempt up to $10 in digital assets used for transaction costs from gain-or-loss recognition, subject to exclusions, but it would not exempt the Bitcoin sent to a merchant.
Covered stablecoin payments would also be excluded from specified broker information returns. Treasury would set further rules for its eligibility list, records and broker reporting. The bill remains a proposal, so its potential benefit for stablecoin payments depends on passage and on which issuers and tokens qualify.
Frequently asked questions
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Which stablecoin purchases would qualify for the proposed tax treatment?
The payment must use an eligible dollar stablecoin that meets the bill's issuer requirements and appears on Treasury's latest list. The taxpayer must have acquired it within 3% of $1.00.
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Would the ADAPT Act remove tax reporting for Bitcoin purchases?
No. Spending Bitcoin would remain a taxable disposition requiring a cost-basis calculation and reporting of any capital gain or loss.
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What relief would the bill offer for digital asset transaction fees?
It would exempt gain or loss on up to $10 in digital assets used for transaction costs, subject to exclusions. That relief would not cover Bitcoin sent to a merchant as payment.
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Would covered stablecoin payments generate broker information returns?
The bill would exempt covered stablecoin payments from specified broker information returns. Treasury would set further broker-reporting rules.
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When would the proposed rules take effect?
The stablecoin payment and transaction-fee provisions would apply to covered transactions starting Jan. 1, 2027, if the bill becomes law. Current IRS treatment remains in force.
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