[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9178 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 9178
To amend the Internal Revenue Code of 1986 to reduce certain tax
compliance burdens with respect to digital asset ownership, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 8, 2026
Mr. Yakym introduced the following bill; which was referred to the
Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to reduce certain tax
compliance burdens with respect to digital asset ownership, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Less Tax Paperwork
for Digital Asset Owners Act''.
(b) References.--Except as otherwise expressly provided, whenever
in this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; etc.
Sec. 2. Treatment of de minimis digital asset network fees.
Sec. 3. Simplified accounting for gain and loss on widely traded
digital assets.
Sec. 4. Treatment of U.S. dollar stablecoin transactions.
Sec. 5. Broker requirements.
Sec. 6. Definitions.
SEC. 2. TREATMENT OF DE MINIMIS DIGITAL ASSET NETWORK FEES.
(a) In General.--Part III of subchapter O of chapter 1 of subtitle
A is amended by inserting after section 1043 the following new section:
``SEC. 1044. DE MINIMIS NETWORK FEE EXCEPTION.
``(a) In General.--No gain or loss shall be recognized on the
disposition of a digital asset in payment of a de minimis network fee.
``(b) De Minimis Network Fee.--For purposes of this section--
``(1) In general.--The term `de minimis network fee' means
an amount paid or incurred in a digital asset transaction to
validate another digital asset transaction if the aggregate
amount so paid or incurred with respect to the validation of
such other digital asset transaction does not exceed $10.
``(2) Network fee.--The term `network fee' means any amount
which would be a de minimis network fee if paragraph (1) were
applied without regard to the dollar limitation specified
therein.
``(c) Disposition of Digital Asset Used To Pay Network Fee.--For
purposes of this section--
``(1) a disposition of a digital asset shall not fail to be
treated as a payment merely because such asset is not received
by another person, and
``(2) any payment of a network fee using a digital asset
shall be treated as a disposition of such asset in exchange for
consideration equal to the fair market value of such digital
asset.
``(d) Treatment of Unrecognized Gain.--The amount of any network
fee which would otherwise be taken into account in determining the
amount of gain or loss on the disposition of any asset, in determining
the amount of any deduction, or in determining the basis of any asset
acquired, shall be reduced by the amount of any gain not recognized by
reason of subsection (a) with respect to the disposition of the digital
asset used to pay such network fee.
``(e) Exclusions.--
``(1) Trade or business.--
``(A) In general.--Subsection (a) shall not apply
to the disposition of a digital asset by--
``(i) a trader, broker, or dealer in
digital assets,
``(ii) a person in the trade or business of
batching or facilitating the validation of
digital asset transactions on behalf of others,
``(iii) to the extent provided by the
Secretary, any person in a trade or business
which is substantially similar to a trade or
business described in clause (i) or (ii), or
``(iv) any person that engaged in more than
5,000 digital asset transactions during the
preceding taxable year.
``(B) Administrative convenience exception.--
``(i) In general.--Subparagraph (A) shall
not apply to any taxpayer that demonstrates to
the Secretary that such taxpayer is of a type
with respect to which not applying subparagraph
(A) will not result in a substantial Federal
revenue loss.
``(ii) Guidance.--The Secretary shall issue
guidance that--
``(I) identifies different types of
taxpayers with respect to which not
applying subparagraph (A) will not
result in substantial Federal revenue
loss, and
``(II) specifies with respect to
each such type of taxpayer the
information that such taxpayer must
provide to make the demonstration
described in clause (i).
``(iii) Certain factors required to be
taken into account.--The guidance issued by the
Secretary under clause (ii) shall--
``(I) for purposes of determining
the classification of types of
taxpayers, and whether any Federal
revenue loss from not applying
subparagraph (A) with respect to any
such type of taxpayer would be
substantial, take into account the
method or methods used by such type of
taxpayer for selecting the digital
assets used to pay network fees and the
average holding period of such digital
assets by such type of taxpayer, and
``(II) determine Federal revenue
loss by reducing such loss by a
reasonable approximation of the
additional administrative costs of the
Department of the Treasury, and the
additional compliance costs of such
type of taxpayer (and any person who
would be required to make additional
information return reporting with
respect to such type of taxpayer),
which would be imposed if subparagraph
(A) did not apply to such type of
taxpayer.
``(2) Certain accounting methods.--Subsection (a) shall not
apply to any digital asset--
``(A) to which section 475, 1051(a), or 1256(a), or
``(B) except as otherwise provided by the
Secretary, to which a mark-to-market method applies
under any other provision of this subtitle.
``(f) Regulations.--The Secretary shall issue such regulations or
other guidance as may be necessary or appropriate to carry out the
purposes of this section, including regulations or guidance to prevent
the abuse of this section through--
``(1) transaction structuring for the purpose of qualifying
for the exclusion provided in subsection (a), and
``(2) the receipt of any value other than the validation of
a digital asset transaction in exchange for a network fee.''.
(b) Clerical Amendment.--The table of sections for part III of
subchapter O of chapter 1 of subtitle A is amended by inserting after
the item relating to section 1043 the following new item:
``Sec. 1044. De minimis network fee exception.''.
(c) Effective Date.--The amendments made by this section shall
apply to the disposition of assets after December 31, 2027.
SEC. 3. SIMPLIFIED ACCOUNTING FOR GAIN AND LOSS ON WIDELY TRADED
DIGITAL ASSETS.
(a) In General.--Part IV of subchapter O of chapter 1 of subtitle A
is amended by inserting before section 1052 the following new section:
``SEC. 1051. ELECTION TO APPLY SIMPLIFIED ACCOUNTING FOR GAIN AND LOSS
ON WIDELY TRADED DIGITAL ASSETS.
``(a) In General.--In the case of any designated type of digital
asset with respect to any taxpayer for any taxable year--
``(1) such taxpayer shall recognize gain on such designated
type of digital asset for such taxable year equal to the excess
(if any) of--
``(A) the sum of--
``(i) the aggregate amount realized by the
taxpayer on sales or exchanges (including
nonrecognition transactions) of widely traded
digital assets of such designated type during
such taxable year,
``(ii) in the case of dispositions
(including nonrecognition transactions), other
than sales or exchange described in clause (i),
of widely traded digital assets of such
designated type, the fair market value of such
widely traded digital assets (determined as of
the time of such dispositions), and
``(iii) the fair market value of widely
traded digital assets of such designated type
held by such taxpayer as of the close of the
taxable year, over
``(B) the sum of--
``(i) the fair market value of
consideration provided by the taxpayer for the
acquisition of widely traded digital assets of
such designated type during the taxable year,
``(ii) in the case of any disposition
described in subparagraph (A)(ii), any amounts
which would have reduced the amount realized by
the taxpayer on such disposition if such
disposition had been a sale or exchange,
``(iii) in the case of the acquisition of
widely traded digital assets of such designated
type during the taxable year the basis of which
in the hands of the taxpayer are determined by
reference to the basis of such assets in the
hands of the transferor, the basis of such
assets in the hands of the taxpayer immediately
after such acquisition, and
``(iv) the fair market value of widely
traded digital assets of such designated type
held by such taxpayer as of the close of the
preceding taxable year,
``(2) such taxpayer shall recognize loss on such designated
type of digital asset for such taxable year equal to the excess
(if any) of--
``(A) the amount described in paragraph (1)(B),
over
``(B) the amount described in paragraph (1)(A), and
``(3) except as provided in paragraph (1) and (2), such
taxpayer shall not recognize any gain or loss on the
disposition of widely traded digital assets of such designated
type.
``(b) Designated Type of Digital Asset.--For purposes of this
section--
``(1) In general.--The term `designated type of digital
asset' means, with respect to any taxpayer for any taxable
year, any type of widely traded digital asset with respect to
which such taxpayer elects the application of this section for
such taxable year.
``(2) Type of widely traded digital asset.--Widely traded
digital assets shall be treated as being of the same type if,
and only if--
``(A) such assets are fungible, or
``(B) such assets are determined under rules
provided by the Secretary to have values that are
directly linked or highly correlated.
``(c) Gain or Loss Treated as Short-Term.--Any gain or loss
determined under subsection (a) shall be treated as short-term capital
gain or short-term capital loss, respectively.
``(d) Treatment of Lending Transactions.--
``(1) Certain lending agreements.--In the case of any
transfer of widely traded digital assets to which section
1058(a) applies, such assets shall be treated for purposes of
this section as continuing to be held by the transferor.
``(2) Other lending transactions.--In the case of any loan
of widely traded digital assets which is not described in
paragraph (1), except as otherwise provided by the Secretary,
such assets shall be treated for purposes of this section as
continuing to be held by the lender.
``(e) Election.--
``(1) Application of election.--An election under this
section with respect to any designated type of digital asset
shall apply to the first taxable year which begins after the
date on which the taxpayer makes such election and to each
taxable year thereafter unless revoked as provided in paragraph
(3).
``(2) Partnerships and s corporations.--In the case of any
partnership or S corporation, the election under this section
shall be made at the partnership or S corporation level.
``(3) Revocation.--
``(A) In general.--A taxpayer may revoke an
election under this section with respect to a taxable
year which--
``(i) has not begun as of the date on which
such taxpayer requests such revocation, and
``(ii) is not one of the first 5 taxable
years to which such election applies.
``(B) Deemed revocation.--In the case of any
designated type of digital asset which has ceased to be
a widely traded digital asset, the election under this
section with respect to such designated type shall be
treated as revoked with respect to the first taxable
year beginning after the date on which such designated
type ceases to be a widely traded digital asset.
``(C) 5-year waiting period.--In the case of any
revocation under this paragraph with respect to any
designated type of digital asset, the taxpayer may not
make an election under this section with respect to
such designated type if such election would apply to
any of the first 5 taxable years to which such
revocation applies.
``(D) Special rule for traders making mark-to-
market election.--If a taxpayer has in effect one or
more elections under this section with respect to
designated types of digital assets and such taxpayer
makes the election under section 475(f)(3) with respect
to any taxable year, the taxpayer shall
(notwithstanding subparagraph (A)) be treated as
revoking all such elections under this section
beginning with such taxable year.
``(f) Transition Rules Related to Election, Revocation, and Certain
Transfers.--
``(1) Transition rule for election.--In the case of an
election under this section, with respect to any designated
type of digital asset, any widely traded digital assets of such
designated type held by the taxpayer shall be treated as sold
for fair market value on the last day of the taxable year
preceding the first taxable year to which such election
applies.
``(2) Transition rule for revocation.--In the case of a
revocation of an election under this section, proper adjustment
shall be made in the amount of any gain or loss subsequently
realized for gain or loss taken into account under subsection
(a).
``(3) Transition rule for certain transfers.--In the case
of any transfer of a widely traded digital asset which is a
designated type of digital asset with respect to the transferor
for the taxable year in which the transfer occurs, if the basis
of such asset in the hands of the transferee is determined by
reference to the basis of such asset in the hands of the
transferor, the basis of such asset in the hands of the
transferor (solely for purposes of determining the basis of
such asset in the hands of the transferee) shall be treated as
being equal to the fair market value of such asset at the time
of such transfer.
``(g) Coordination With Certain Other Provisions.--
``(1) Determined without regard to wash and constructive
sale rules.--Sections 1091 and 1259 shall not apply to any
transaction with respect to which gain or loss is not
recognized by reason of subsection (a)(3).
``(2) Coordination with related party transaction rules.--
Section 267 shall not apply with respect to a sale or exchange
of property if the transferor has an election in effect under
this section for the taxable year with respect to such
property.
``(3) Nonrecognition provisions to not apply.--In the case
of any transfer of a widely traded digital asset which is not a
designated type of digital asset with respect to the transferor
for the taxable year of the transferor in which the transfer
occurs but which is a designated type of digital asset with
respect to the transferee for the taxable year of the
transferee in which the transfer occurs, if the transferor and
transferee are described in section 267(b) (applied without
regard to section 267(c)(3)) or section 707(b)(1), gain or loss
shall be recognized on such transfer notwithstanding any other
provision of this title.
``(h) Clarification That Certain Transfers Are Treated as
Dispositions.--The following shall not fail to be treated as a
disposition for purposes of this section:
``(1) The distribution of any digital asset from a trust to
a beneficiary.
``(2) The transfer of any digital asset from a decedent
(whether or not incident to the decedent's death).
``(i) Regulatory Authority.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or appropriate to
carry out the purposes of this section, including regulations or
guidance relating to--
``(1) the form and manner of making an election or
revocation under this section,
``(2) adjustments necessary by reason of such election or
revocation,
``(3) adjustments to reporting requirements relating to
widely traded digital assets with respect to which an election
is in effect under this section,
``(4) the treatment of a derivative of a designated type of
digital asset, and
``(5) preventing abuse of this section.''.
(b) Clerical Amendment.--The table of sections for part III of
subchapter O of chapter 1 of subtitle A is amended by inserting before
the item relating to section 1052 the following new item:
``Sec. 1051. Election to apply simplified accounting for gain and loss
on widely traded digital assets.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2027.
SEC. 4. TREATMENT OF U.S. DOLLAR STABLECOIN TRANSACTIONS.
(a) In General.--Part IV of subchapter O of chapter 1 of subtitle A
is amended by redesignating section 1063 as section 1064 and by
inserting after section 1062 the following new section:
``SEC. 1063. CERTAIN U.S. DOLLAR STABLECOIN TRANSACTIONS.
``(a) Treatment of Acquisitions of U.S. Dollar Stablecoins.--
``(1) Determination of basis.--The basis of any qualified
U.S. dollar stablecoin acquired by a taxpayer in any sale or
exchange shall be the redemption value of such stablecoin. The
preceding sentence shall not apply if it is unreasonable under
the facts and circumstances to conclude that the value of the
consideration provided for such stablecoin in such sale or
exchange is not less than 99.5 percent of such redemption
value.
``(2) Treatment of consideration provided in exchange.--For
purposes of this title, in the case of any consideration other
than money provided in exchange for a qualified U.S. dollar
stablecoin, the income, gain, or loss resulting from the
provision of such consideration shall be determined by treating
the value of such qualified U.S. dollar stablecoin as being
equal to the redemption value of such stablecoin. The preceding
sentence shall not apply if it is unreasonable under the facts
and circumstances to conclude that the value of such stablecoin
is not less than 99.5 percent, and not more than 100.5 percent,
of such redemption value.
``(b) Treatment of Sale or Exchange of Qualified U.S. Dollar
Stablecoins.--
``(1) Determination of gain or loss.--If the taxpayer's
basis in any qualified U.S. dollar stablecoin was determined
under subsection (a)(1), gain or loss on such taxpayer's sale
or exchange of such stablecoin shall be determined as though
such stablecoin were sold or exchanged for the redemption value
of such stablecoin. The preceding sentence shall not apply if
it is unreasonable under the facts and circumstances to
conclude that the value of the consideration received for such
stablecoin in such sale or exchange is not more than 100.5
percent of such redemption value.
``(2) Treatment of consideration received in exchange.--For
purposes of this title, in the case of any consideration other
than money received in exchange for a qualified U.S. dollar
stablecoin, the cost of (and amount paid or incurred for) such
consideration shall be determined by treating the value of such
qualified U.S. dollar stablecoin as being equal to the
redemption value of such stablecoin. The preceding sentence
shall not apply if it is unreasonable under the facts and
circumstances to conclude that the value of such stablecoin is
not less than 99.5 percent, and not more than 100.5 percent, of
such redemption value.
``(c) Exceptions.--
``(1) In general.--Subsections (a) and (b) shall not apply
with respect to any taxpayer for any taxable year if such
taxpayer is--
``(A) a trader, broker, or dealer in qualified U.S.
dollar stablecoins,
``(B) to the extent provided by the Secretary, any
person in a trade or business which is substantially
similar to a trade or business described in
subparagraph (A), or
``(C) any other person who in the preceding taxable
year engaged in more than 5,000 transactions to which
subsection (a) or (b) applied, determined without
regard to--
``(i) any such transaction which is
predominantly with respect to a trade or
business (other than a trade or business
described in subparagraph (A) or (B)),
including the acceptance of qualified U.S.
dollar stablecoins at redemption value as a
payment for goods or services in such trade or
business and the use of qualified U.S. dollar
stablecoins at redemption value to acquire
goods and services for use in such trade or
business, and
``(ii) any such transaction which is a sale
(for money) of a qualified U.S. dollar
stablecoin at or below redemption value.
``(2) Functional currency other than the dollar.--
Subsections (a) and (b) shall not apply to any taxpayer or
qualified business unit (as defined in section 989(a)) that
uses a functional currency other than the dollar.
``(3) Related parties.--In the case of any sale or exchange
between persons described in section 267(b) (applied without
regard to section 267(c)(3)) or section 707(b)(1)--
``(A) subsections (a)(1), (a)(2), and (b)(2) shall
be applied by substituting `100 percent' for `99.5
percent', and
``(B) subsections (a)(2), (b)(1), and (b)(2) shall
be applied by substituting `100 percent' for `100.5
percent'.
``(d) Redemption Value.--For purposes of this section, the term
`redemption value' means, with respect to a qualified U.S. dollar
stablecoin, the dollar amount for which the issuer is obligated to
convert, redeem, or repurchase such stablecoin.
``(e) Regulations.--The Secretary shall issue such regulations or
other guidance as may be necessary or appropriate to carry out the
purposes of this section, including regulations or other guidance--
``(1) describing the factors considered, and documentation
or substantiation required, with respect to the facts and
circumstances tests described in subsections (a)(1), (a)(2),
(b)(1), and (b)(2),
``(2) providing for the application of subsection (c)(1)
with respect to a portion of a taxable year if the taxpayer
only regularly purchases, exchanges, or sells qualified U.S.
dollar stablecoins for profit for a portion of such taxable
year, and
``(3) to prevent abuse of this section.''.
(b) Clerical Amendment.--The table of sections for part IV of
subchapter O of chapter 1 of subtitle A is amended by redesignating the
item relating to section 1063 as an item relating to section 1064 and
by inserting after the item relating to section 1062 the following new
item:
``Sec. 1063. Certain U.S. dollar stablecoin transactions.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2026.
SEC. 5. BROKER REQUIREMENTS.
(a) In General.--
(1) Exception for qualified u.s. dollar stablecoins
acquired at redemption value.--Section 6045(g)(3)(D) is amended
to read as follows:
``(D) Specified digital asset.--The term `specified
digital asset' means any digital asset other than a
qualified U.S. dollar stablecoin the customer's basis
in which at the time of acquisition is at least 99.5
percent of such stablecoin's redemption value (as
defined in section 1063(e)).''.
(2) Conforming amendments.--
(A) Section 6045(c)(1)(D) is amended by striking
``digital assets'' and inserting ``specified digital
assets''.
(B) Subparagraph (B)(iv) and subparagraph (C)(iii)
of section 6045(g)(3) are each amended by striking
``digital asset'' and inserting ``specified digital
asset''.
(C) Section 6050I(d)(3) is amended by striking
``(as defined in section 6045(g)(3)(D))''.
(b) Special Rules for Digital Assets Used To Pay De Minimis
Validation Fee.--Section 6045(g) is amended by adding at the end the
following new paragraph:
``(7) Special rules for digital assets used to pay de
minimis validation fee.--
``(A) In general.--Except as otherwise provided by
the Secretary, in the case of the disposition of a
digital asset with respect to which no gain or loss is
recognized by reason of section 1044(a)--
``(i) except as provided in clause (ii),
subsection (a) shall not apply to such
disposition, and
``(ii) the broker shall include in a return
under subsection (a) such aggregate information
relating to such dispositions of the taxpayer
as the Secretary determines necessary or
appropriate, including for purposes of
verifying the taxpayer's basis in digital
assets held by the taxpayer.
``(B) Application of de minimis exception.--If the
broker has been notified by the taxpayer or the
Secretary that the exception described in section
1044(e)(1)(B) applies to such taxpayer, the broker may
treat such exception as continuing to apply with
respect to such taxpayer for any calendar year
(hereafter in this subparagraph referred to as the
`current calendar year') unless--
``(i) such taxpayer had more than 5,000
digital asset transactions with such broker
during any of the 5 preceding calendar years
and the taxpayer has not notified the broker
that such exception applies to such taxpayer
for the current calendar year,
``(ii) such taxpayer or the Secretary
notifies such broker that such exception does
not apply to such taxpayer, or
``(iii) such broker otherwise knows, or has
reason to know, that such exception does not
apply to such taxpayer.''.
(c) Special Rules for Simplified Accounting for Widely Traded
Digital Assets.--Section 6045(g), as amended by subsection (b), is
amended by adding at the end the following new paragraph:
``(8) Special rules for simplified accounting for widely
traded digital assets.--
``(A) In general.--Except as otherwise provided by
the Secretary, in the case of widely traded digital
assets with respect to which an election under section
1051 applies--
``(i) except as provided in clause (ii),
subsection (a) shall not apply to dispositions
of such assets, and
``(ii) the broker shall include in a return
under subsection (a) such information with
respect to each desginated type of such assets
(within the meaning of section 1051) as the
Secretary may provide, including--
``(I) aggregate reporting with
respect to sales, exchanges,
dispositions, and acquistions of assets
of such designated type (including net
gain or loss thereon),
``(II) the fair market value of
assets of such designated type held by
the taxpayer as of the beginning and
end of the calendar year, and
``(III) such other information as
the Secretary may require with respect
to assets of such designated type for
purposes of the administration of
section 1051.
``(B) Determination of election based on broker
notification.--For purposes of subparagraph (A), the
broker shall take into account any election under
section 1051 (and any revocation of such election) if
(and only if) the taxpayer or the Secretary notifies
such broker of such election (or revocation) or such
broker otherwise knows, or has reason to know, of such
election (or revocation).''.
(d) Effective Date.--The amendments made by this section shall
apply to returns required to be filed, and statements required to be
furnished, after December 31, 2027.
SEC. 6. DEFINITIONS.
Section 7701 is amended--
(1) by redesignating subsection (p) as subsection (q), and
(2) by inserting after subsection (o) the following new
subsection:
``(p) Definitions Related to Digital Assets.--For purposes of this
title--
``(1) Digital asset.--The term `digital asset' means,
except as otherwise provided by the Secretary, any digital
representation of value which is recorded on a
cryptographically secured distributed ledger or any similar
technology as specified by the Secretary.
``(2) Traded digital asset.--The term `traded digital
asset' means, except as otherwise provided by the Secretary to
prevent abuse, any digital asset if--
``(A) such asset is fungible,
``(B) quotations of such asset are readily
available on an exchange (or, in the case of an
exchange that does not provide quotations, such
quotations are readily ascertainable), and
``(C) such asset is either--
``(i) not a tokenized digital asset, or
``(ii) a wrapped digital asset with respect
to which the reference digital asset is a
traded digital asset.
``(3) Widely traded digital asset.--
``(A) In general.--The term `widely traded digital
asset' means, with respect to any taxpayer for any
taxable year and except as otherwise provided by the
Secretary to prevent abuse, any traded digital asset
if--
``(i) quotations for such asset were
readily available on an exchange for the entire
calendar year which ends in or with the taxable
year preceding such taxable year,
``(ii) the market capitalization of such
asset exceeded $500,000,000 at substantially
all times during such calendar year, and
``(iii) not more than 10 percent of the
units of such asset were owned, directly or
indirectly, by the taxpayer or any person
described with respect to the taxpayer under
section 267(b) (applied without regard to
section 267(c)(3)) or section 707(b)(1) at any
time during such taxable year or such preceding
taxable year.
``(B) Special rule for wrapped digital assets.--In
the case of any wrapped digital asset, except as
otherwise provided by the Secretary to prevent abuse,
such asset shall be treated as a widely traded digital
asset if, and only if, the reference digital asset with
respect to such wrapped digital asset is a widely
traded digital asset.
``(C) Authority to ensure reliable price
discovery.--For purposes of subparagraphs (A) and (B),
the term `prevent abuse' includes the exclusion of
assets that lack reliable price discovery or that the
Secretary determines are at risk of price manipulation.
``(D) Authority to adjust requirements.--The
Secretary may, by regulation, provide requirements that
apply in lieu of one or more of the requirements of
clauses (i) through (iii) of subparagraph (A) if the
Secretary determines that due to changes in market
conditions (including by reason of the enactment of
Federal digital asset market structure legislation)
that such alternative requirements would more
effectively or efficiently identify traded digital
assets for which there is consistent and reliable price
discovery.
``(E) Inflation adjustment.--In the case of any
calendar year after 2027, the $500,000,000 amount in
subparagraph (A)(ii) shall be increased by an amount
equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for such
calendar year, determined by substituting
`calendar year 2026' for `calendar year 2016'
in subparagraph (A)(ii) thereof.
Any increase determined under the preceding sentence
which is not a multiple of $100,000 shall be rounded to
the nearest multiple of $100,000.
``(4) Tokenized digital asset.--The term `tokenized digital
asset' means any digital asset (other than any qualified U.S.
dollar stablecoin) if more than an insignificant portion of the
value of such digital asset is related to anything other than
the operation of the cryptographically secured distributed
ledger on which such digital asset is recorded.
``(5) Wrapped digital asset.--The term `wrapped digital
asset' means, except as otherwise provided by the Secretary to
prevent abuse, any digital asset if such asset--
``(A) is redeemable on demand, on a one-for-one
basis, for another digital asset, and
``(B) is recorded on a cryptographically secured
distributed ledger other than the cryptographically
secured distributed ledger on which the digital asset
referred to in subparagraph (A) is recorded.
``(6) Reference digital asset.--
``(A) In general.--The term `reference digital
asset' means, with respect to any wrapped digital
asset, the digital asset referred to in paragraph
(5)(A).
``(B) Special rule for rewrappings.--If, but for
this subparagraph, the reference digital asset with
respect to any wrapped digital asset would be a wrapped
digital asset (hereafter referred to in this paragraph
as the lower-tier wrapped digital asset)--
``(i) subparagraph (A) shall be applied
with respect to such lower-tier wrapped digital
asset, and
``(ii) the reference digital asset with
respect to such lower-tier wrapped digital
asset shall be treated as the reference digital
asset of such wrapped digital asset.
``(C) Multiple wrappings.--If, after the
application of subparagraph (B), the reference digital
asset with respect to the lower-tier wrapped digital
asset is a wrapped digital asset, such subparagraph
shall be reapplied by treating such lower-tier wrapped
digital asset as the wrapped digital asset.
``(7) Stablecoin.--
``(A) Qualified u.s. dollar stablecoin.--The term
`qualified U.S. dollar stablecoin' means any U.S.
dollar stablecoin which is issued by--
``(i) a permitted payment stablecoin issuer
(as defined in section 2(23) of the GENIUS Act,
as in effect on the date of the enactment of
this paragraph), or
``(ii) a foreign payment stablecoin issuer
(as defined in section 2(12) of the GENIUS Act,
as so in effect) which is permitted under such
Act (as so in effect) to offer, sell, or
otherwise make available such U.S. dollar
stablecoin in the United States.
``(B) U.S. dollar stablecoin.--The term `U.S.
dollar stablecoin' means a payment stablecoin as
defined in section 2(22) of the GENIUS Act (as in
effect on the date of the enactment of this paragraph)
applied by substituting `dollars' for `monetary value'
each place it appears in such section.
``(C) Publication of list.--The Secretary shall, to
the extent feasible, regularly publish a list of
qualified U.S. dollar stablecoins.
``(D) Limited authority to treat stablecoins as
money.--The Secretary may issue such regulations or
other guidance as may be necessary or appropriate to
(except as otherwise expressly provided in this
title)--
``(i) treat qualified U.S. dollar
stablecoins as dollars, and
``(ii) treat other stablecoins as currency
if such treatment would increase Federal
revenues.
``(8) Digital asset transaction.--The term `digital asset
transaction' means any transfer of a digital asset recorded on
the cryptographically secured distributed ledger (or similar
technology) referred to in paragraph (1).
``(9) Validation.--The term `validate', and any derivative
of such term (including `validation'), when used in connection
with a digital asset transaction, includes the processes of
proposing transactions for validation and verifying the
validation of transactions.''.
<all>