Digital Asset PARITY Act

(q) Definitions related to digital assets. For purposes of this title—

(1) Digital asset. The term digital asset means a digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary.

(2) Digital asset exchange. The term digital asset exchange means a platform which facilitates the transfer of digital assets by taking custody of, or exercising control over, such assets on behalf of users.

(3) Actively traded digital asset

(A) In general. The term actively traded digital asset means, with respect to any taxpayer for any taxable year, any digital asset—

(i) which is fungible,

(ii) with a minimum trading volume of $50,000,000 for the two calendar years immediately preceding the sale or exchange of such asset,

(iii) with a minimum yearly market capitalization of $10,000,000,000 for the three calendar years immediately preceding the sale or exchange of such asset, and

(iv) with respect to which the taxpayer and the related parties of the taxpayer hold no more than 5 percent by value or units of such asset.

(B) Inflation adjustment. In the case of any calendar year after 2025, each of the dollar amounts in subparagraph (A) shall be increased by an amount equal to— 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.

(i) such amount, multiplied by

(ii) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting calendar year 2024 for calendar year 2016 in subparagraph (A)(ii) thereof.

(4) Eligible digital asset. The term eligible digital asset means a digital asset that—

(A) is fungible,

(B) is of a type for which a market price is readily ascertainable based on publicly available quotations on a digital asset exchange,

(C) does not represent or confer any ownership interest, equity interest, debt obligation, or other financial or property right in any entity, asset, commodity, or enterprise, and

(D) is designed and functions as a medium of exchange, store of value, or unit of account, and is recorded and transferred through distributed ledger or blockchain technology.

(5) Traded digital asset. The term traded digital asset means a digital representation of value that—

(A) is designed and functions as a medium of exchange, store of value, or unit of account,

(B) is recorded and transferred through distributed ledger or blockchain technology,

(C) does not represent or confer any ownership interest, equity interest, debt obligation, or other financial or property right in any entity, asset, commodity, or enterprise, and

(D) does not derive its value from, or represent a claim on, any fiat currency, commodity, security, or other financial instrument.

(6) Validation activity. The term validation activity means staking, mining, or similar activities in support of the validation of digital asset transactions.

(7) Mining. The term mining, when used in connection with a digital asset, means—

(A) performing computations, or making available computing power, in support of the validation of digital asset transactions, and

(B) except as otherwise provided by the Secretary, any substantially similar activity.

(8) Staking. The term staking, when used in connection with a digital asset, means—

(A) making such asset available in support of the validation of digital asset transactions by pledging, deploying, immobilizing, or locking to support validation of transactions on a cryptographically secured distributed ledger, or

(B) except as otherwise provided by the Secretary, any substantially similar activity.