Senator Daines' ADAPT Act Exempts Stablecoin Payments in Bitcoin (BTC) Tax Overhaul

Stablecoin Payments Set for Tax Relief

Senator Steve Daines of Montana introduced the ADAPT Act on September 30, a comprehensive rewrite of how digital assets are taxed in the United States. Co-sponsoring the bill are Senators Cynthia Lummis of Wyoming, Bernie Moreno of Ohio and Tim Scott of South Carolina. The measure amends the Internal Revenue Code with the stated aim of rules that taxpayers, businesses and the IRS can apply without friction. In a post on X, Daines argued that digital assets have moved into the mainstream while the tax code has not kept up, and that the legislation sets clear rules for stablecoins, network fees, staking and lending. The Bitcoin (BTC) price traded without a clear direction in the hours after the filing, with no immediate market reaction recorded. The centerpiece targets everyday settlement, the payments layer the industry markets as PayFi: purchases of goods and services with qualifying US dollar stablecoins issued under the GENIUS Act would recognize no gain or loss, and brokers would be released from information reporting on those transactions. Eligibility is tied to a Treasury list published each quarter, and traders and dealers are excluded. A parallel carve-out covers network fees, the gas paid on Layer 2 and base networks: where total fees per transaction do not exceed $10, no gain or loss is recognized and broker reporting is waived, though traders, dealers, validators, users clearing more than 5,000 transactions a year and purpose-built structured transactions sit outside the relief. The bill then tightens investor taxation. It applies the wash sale rule to digital assets for the first time, blocking loss deductions when a substantially identical asset is repurchased within 30 days of a sale at a loss. Constructive sale rules follow, so gains locked in through offsetting short positions can no longer defer taxation indefinitely. Staking and mining income would be sourced to the recipient's residence, and SEC-regulated funds staking a single proof-of-stake asset through an external provider keep their tax status.

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House Panel Voted 38 to 5

The Senate filing lands on top of already-advanced House work. The House Ways and Means Committee approved the Digital Asset Tax Clarity Act, H.R. 10357, by a bipartisan vote of 38 to 5 on September 16 and sent it to the full House, as the committee's own release confirms. That bill covers reporting relief and the tax treatment of mining and staking, giving the chamber a counterpart that has already cleared committee. The ADAPT Act runs to 15 sections. Section 2 carries the stablecoin payment exemption. Section 11 applies the $10 threshold to network fees, with the same exclusions for traders, dealers, validators and high-frequency users above 5,000 transactions a year. Section 7 writes the 30-day wash sale window into the code but carves out regulated GENIUS Act stablecoins, staking and mining rewards, and mark-to-market positions. Section 9 extends constructive sale treatment and again spares regulated stablecoins. Section 4 sources staking and mining income to the recipient's residence by default, with a look to the location of equipment and staff for mining run through a branch. Section 6 gives digital asset lending a non-recognition treatment modeled on securities lending. Section 8 clarifies that a fund regulated by the SEC which stakes a single proof-of-stake asset through an external provider does not lose its tax qualification, a provision that reaches crypto ETF issuers weighing staking programs for their listed products. Industry groups including Coinbase, Fidelity Investments, the Blockchain Association, the Crypto Council for Innovation and the Digital Chamber have publicly backed the Senate bill. The ADAPT Act now heads to the Senate Finance Committee, where it would be reconciled with the House text if both advance.

Senate Finance Committee Next

Read against the primary documents, both texts are proposals, not law, and neither takes effect until both chambers pass it and the president signs. The bill text itself is what would bind: Section 2 of the ADAPT Act states that no gain or loss is recognized when qualifying GENIUS Act stablecoins pay for goods or services, and the House committee record fixes its vote at 38 to 5 on September 16. If enacted, the rules would bind taxpayers, brokers and the IRS, with the quarterly Treasury list deciding which stablecoins qualify. Timing is the open question.