The United States has moved to overhaul cryptocurrency tax law, blockchain media outlet Cointelegraph reported on March 27 local time.

U.S. Representatives Max Miller and Steven Horsford released a draft of the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation and Revenue Act, or the Digital Asset PARITY Act. The bill would amend the Internal Revenue Code enacted in 1986 and set out clear rules for the tax treatment of cryptocurrencies.

Under the bill, capital gains on stablecoins pegged to the U.S. dollar would be excluded from taxation if price fluctuations stay within 1 percent. Bitcoin would not qualify. Stablecoin transactions of $200 or less would also be exempt from tax and reporting requirements, but the annual exemption limit has not yet been set. Income earned from crypto lending, staking and passive validation services would be taxed each year based on market value.

The bill has not yet been submitted to Congress and was made public for discussion ahead of legislation. Cody Carbone, CEO of crypto advocacy group the Digital Chamber, pointed out that "if crypto taxes are not clarified, it will be difficult for the industry to take root in earnest."

The Bitcoin community, however, is strongly opposed. Pierre Rochard of Bitcoin financial product issuer Bitcoin Bond Company criticised the plan, saying "Bitcoin is the one that needs a tax exception" and "stablecoins are not decentralised and are not real money."