Sen. Daines moves crypto tax overhaul with stablecoin relief and wash-sale rules

Buying a coffee with a stablecoin in the US can create a taxable event. Sen. Steve Daines wants to change that.

The Montana Republican is pushing a digital asset tax reform bill meant to modernize how the Internal Revenue Code treats crypto. It pairs relief for everyday users with a crackdown on a favorite trader tactic.

The draft runs 13 sections and circulated the week of September 23-25, 2026. Formal introduction was expected the following week.

What’s in the Daines bill

The headline provision covers stablecoins. The draft creates a new IRC §1034 providing nonrecognition of gains or losses on qualifying stablecoin payments at or near the $1 mark.

Put simply, if you spend a dollar-pegged token that is still worth roughly a dollar, you would not need to log a fractional-cent gain or loss. That rule would apply to transactions after December 31, 2026.

The second piece of relief targets network fees. Fees of $10 or less per transaction would get a de minimis exemption from gain or loss recognition.

Then comes the part traders may like less. The bill extends wash-sale rules to most digital assets, with qualified stablecoins carved out.

A wash sale works like this: you sell an asset at a loss, claim the loss on your taxes, then buy the same asset right back. Your position barely changes, but your tax bill shrinks. Stock investors lost that trick long ago, and crypto holders would now face similar limits.

The draft also includes several more technical provisions:

• Mark-to-market elections, letting certain taxpayers treat holdings as if sold at fair value at year end
• Source rules for staking and mining income, clarifying where that income is considered earned
• Safe harbors for foreign investors

The House is already on the same page

Daines is not working in a vacuum. On September 16, 2026, the House Ways and Means Committee advanced the Digital Asset Tax Certainty Act, H.R. 10357.

The vote was 38-5. The Senate draft is designed to line up with that House effort.

Daines has been signaling this move for months. In July 2026, he stressed the need for tax-code updates that cut down on complexity, and the draft follows that theme.

Why crypto taxes got so messy

The root of the problem traces back to IRS Notice 2014-21. That guidance classified digital assets as property rather than currency.

The property label sounds harmless. In practice, it means every disposal, whether a trade, a purchase, or a fee payment, can trigger a gain or loss calculation.

Stablecoins make the absurdity especially clear. A token designed to sit at $1 can drift a fraction of a cent, and under current treatment that drift is technically reportable.

What this means for users, traders, and the market

For everyday users, the stablecoin and fee provisions would remove much of the friction from using crypto for regular payments.

The effective date deserves attention. The stablecoin rule would kick in for transactions after December 31, 2026, so nothing changes for this tax year even if the bill moves quickly.

For active traders, the wash-sale extension is the real story. Harvesting losses in a down market and immediately buying back in has been a legal loophole in crypto that equity investors never had. Anyone relying on it should watch the final bill language closely, particularly how it defines the qualified stablecoins exempted from the rule.

Watch for three things next: the formal Senate introduction and any cosponsors who sign on, whether the Senate text diverges from H.R. 10357 on stablecoin definitions or wash-sale scope, and whether leadership signals a vote before or after November.