What This Bill Does
The PAR Act would amend the Internal Revenue Code to treat certain digital assets more like securities and commodities for tax purposes. It expands existing rules on securities lending, mark-to-market accounting, and trading safe harbors so they can apply to defined categories of digital assets, including “traded digital assets,” “widely traded digital assets,” and “covered digital assets.” The bill also sets a new definition framework for digital assets and gives the Treasury Secretary authority to specify or limit some of those definitions. Several changes would take effect after enactment, while the trading safe harbor would apply to taxable years beginning after December 31, 2025.
- Section 2 expands securities-lending rules to cover “specified assets,” including traded digital assets.
- Section 3 creates a mark-to-market election for dealers in covered digital assets.
- Traders in covered digital assets can also elect mark-to-market treatment under section 475(f).
- Section 4 adds a digital-asset trading safe harbor to section 864(b)(2).
- Section 5 defines “digital asset,” “traded digital asset,” and “widely traded digital asset,” including a $500,000,000 market-cap test.
Who This Bill Affects
For people who trade, lend, or build businesses around digital assets, this bill could change how those assets are taxed and reported. If you are a dealer or trader in widely traded digital assets, it could let you use mark-to-market accounting and, in some cases, spread section 481 adjustments over four years; if you are not involved in digital assets, the direct effect is likely limited. The bill could still matter indirectly if it changes how crypto-related financial products are priced or structured.
See how this bill affects you — sign in for a personalized analysisWho Supports & Opposes This
- digital asset exchanges and trading firms They would likely support the bill because it gives digital assets clearer tax treatment that mirrors existing rules for securities and commodities. The new definitions and elections could reduce uncertainty and make compliance more predictable for firms that hold or trade these assets at scale.
- dealers and active traders in digital assets They may favor the mark-to-market election because it can align tax accounting with how they manage inventory and risk. The four-year spread of section 481 adjustments also softens the transition for taxpayers changing methods in their first taxable year after enactment.
- financial intermediaries and custodians They could support the expanded safe harbor for trading through resident brokers, commission agents, custodians, or other independent agents. That provision may make it easier to structure cross-border or agency-based trading without triggering unwanted tax consequences.
- tax compliance advocates They may worry that the bill adds several new categories and exceptions, which could make the tax code more complex rather than simpler. The Secretary’s authority to specify or limit definitions could also create uncertainty about how the rules will be applied.
- some traditional securities and commodities market participants They may object to digital assets being given parallel treatment that could blur distinctions between asset classes. The bill’s rule that certain covered digital assets are not treated as securities or commodities for section 475 purposes may create edge cases and compliance questions.
- critics of crypto market expansion They may argue that clearer tax rules could further legitimize and encourage a sector they view as speculative or risky. By making lending, trading, and hedging rules more workable, the bill could lower friction for larger-scale digital-asset activity.
Key Implications
-
““specified assets” means—“securities ... and traded digital assets””
Section 1058 would no longer be limited to securities lending. Digital-asset lending arrangements could be brought into the same tax framework, which matters for how returns, payments, and obligations are handled during the lending period.
-
““dealer in covered digital assets who elects the application of this subsection””
Dealers in qualifying digital assets could choose mark-to-market treatment. That can change when gains and losses are recognized for tax purposes, which is especially important for firms holding inventory-like positions.
-
““market capitalization ... exceeded $500,000,000 at substantially all times””
Only digital assets meeting this threshold can qualify as “widely traded digital assets.” This limits the bill’s broadest treatment to larger, more established assets rather than the entire digital-asset market.
-
““Trading in traded digital assets through a resident broker ... or other independent agent””
The safe harbor would protect certain agency-based trading from being treated as a U.S. trade or business for tax purposes under section 864(b)(2). That can matter for foreign investors and cross-border market participants.
-
““taken into account ratably over the 4-taxable year period””
Taxpayers changing accounting methods under the new rules would not have to absorb all section 481 adjustments at once. Spreading the adjustment over four years reduces the immediate tax shock from switching methods.
Latest Status
June 8, 2026
Referred to the House Committee on Ways and Means.
Take Action
Get more from BillBoard
Free tools to understand, respond to, and track this bill.
Ask AI about this billData sourced from api.congress.gov.