PAR Act

Summary#

This bill, the "Providing Analogous Rules for Digital Assets Act" (PAR Act), changes parts of the Internal Revenue Code to clarify how federal tax rules apply to digital assets. It expands rules that once applied to "securities" so they can apply to certain "specified assets," including "traded digital assets." It allows dealers and traders of widely traded digital assets to elect mark-to-market accounting and creates rules for how adjustments from that election are handled. The bill creates a safe harbor for trading in traded digital assets through resident brokers or agents, and it adds new definitions for terms such as digital asset, traded digital asset, widely traded digital asset, tokenized digital asset, wrapped digital asset, reference digital asset, and stablecoin. It also gives the Secretary of the Treasury authority to publish lists of qualified U.S. dollar stablecoins and to issue guidance treating some stablecoins as dollars or currency. The bill includes rules of construction saying the changes do not create an inference about whether a digital asset is a security, commodity, or other type of financial interest.

What it means for you#

• If you lend or borrow traded digital assets, the bill would expand rules about transfers under lending agreements so that transferors of traded digital assets must assume owner obligations during the loan period and related payments must be made to the transferor. This applies to transfers made after enactment.
• Dealers and traders of "covered" or "widely traded" digital assets could choose mark-to-market accounting for those assets; the bill describes what counts as a covered digital asset and sets an effective date for taxable years beginning after enactment.
• Traders who use resident brokers, commission agents, custodians, or other independent agents to trade traded digital assets may qualify for a trading safe harbor, except dealers in digital assets.
• The bill defines key terms and sets a $500,000,000 market-capitalization test (adjusted for inflation after 2027) for an asset to be a "widely traded digital asset," and it defines wrapped assets and qualified U.S. dollar stablecoins with references to another act (the GENIUS Act).
• The Secretary of the Treasury is given authority to issue regulations, publish lists of qualified stablecoins, and take steps to prevent abuse or unreliable price discovery.

Expenses#

No publicly available information on estimated federal budget effects or compliance costs is included in the bill text or metadata provided.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.