US ADAPT Act: Tax Exemption for Stablecoins, But Not Bitcoin?

[Botnake]

So I found this interesting proposed bill called the ADAPT Act, which was introduced last September 30, 2026, which will make stablecoins more convenient than Bitcoin for our daily lives. This is written under “SEC. 1034. Certain sales, exchanges, or dispositions of stablecoins”, which says:

“(a) In general.—No gain or loss shall be recognized on the sale, exchange, or disposition of covered payment stablecoins to purchase products or services.”

So it seems unfair, because when Bitcoin is used for purchases, you have to pay capital gains tax, while using qualifying stablecoins, they would already be exempted.

Simple example of how capital gains tax is computed in the US.

For example, you purchased $1000 worth of Bitcoin and after several months, its value rises to $1500.. now you purchase an item, for this example let's use a laptop worth $1000.. although you did not exchange your Bitcoin for cash but since you bought something with it, you will need to pay capital gains tax.

How much is the capital gain? $333.33, tax (depending on the computation as there are brackets).

So imagine with that rule, they are not helping Bitcoin grow its adoption for daily transactions as they are making it hard for us. And with that proposed bill if approved, people will simply choose stablecoins (those that would qualify) and adoption of stablecoins will grow.

However, yes.. there's still some good news for Bitcoin under the Act, because Bitcoin transaction fees that are $10 and below could be exempted from capital gains tax.. so you might be asking, what the heck, they charge capital gains tax on fees? Yes, because that's how complicated the law is in this country.

For example, you send $1000 and you pay $10 as a transaction fee, that fee you paid could still be subject to capital gains tax if the Bitcoin used to pay it has increased in value.. but good thing under the proposal, the gain would be exempted as long as the qualifying fees are $10 and below. lol (as if it's a big help).


check the source

[SquirrelJulietGarden]

So I found this interesting proposed bill called the ADAPT Act, which was introduced last September 30, 2026, which will make stablecoins more convenient than Bitcoin for our daily lives. This is written under “SEC. 1034. Certain sales, exchanges, or dispositions of stablecoins”, which says:

“(a) In general.—No gain or loss shall be recognized on the sale, exchange, or disposition of covered payment stablecoins to purchase products or services.”

So it seems unfair, because when Bitcoin is used for purchases, you have to pay capital gains tax, while using qualifying stablecoins, they would already be exempted.

Why do you consider it as unfair?
If it is a use of stablecoin to buy products or services, it's not be charged with any tax like capital gain tax but how did you get that amount of stablecoin is another thing government will look at.

If before that purchase, you sold bitcoin for stablecoin, you will be taxed. That means along the way, before you have stablecoin, you are not free from tax.

People who use stablecoins actually accept risks.
Most stablecoins can be frozen in your wallets.
Stablecoins and Blacklists.
Stablecoins can be frozen by issuers.

[Botnake]

Why do you consider it as unfair?

Because both (stable coins and btc ) are entitled for capital gains but with this act, stable coins will be exempted.

If it is a use of stablecoin to buy products or services, it's not be charged with any tax like capital gain tax but how did you get that amount of stablecoin is another thing government will look at.

Capital gains for stablecoins are not the same as for Bitcoin because their value does not normally appreciate.
Capital gains are normally computed when you sell an asset at a higher price.
For example, you sell $1000 worth of USDT for $1010, that $10 profit is what we call a capital gain.

If before that purchase, you sold bitcoin for stablecoin, you will be taxed. That means along the way, before you have stablecoin, you are not free from tax.

That is correct because you have already converted your Bitcoin to USDT, but that is not the only instance.
You will also be taxed if you use your Bitcoin to buy a property or an item, as long as its value has increased from the original amount you purchased it for.

[legiteum]

Capital gains taxes only happen when you make money. And then the tax takes a small portion of the money you make. This is how every single investment in the USA is taxed, and it would be ludicrous to carve out an exception just for Bitcoin (and Ether, and $DOGE, and $TRUMP, and... AAPL, and NVDI, and...).

All the proposal is saying here is that stablecoins, by definition, don't produce any kind of gain. Hence individuals should not have to report their stablecoin holdings in any way to the IRS anymore than they have to report physical cash they are holding. That's just sensible policy that saves both individuals and the government a lot of time.

So imagine with that rule, they are not helping Bitcoin grow its adoption for daily transactions as they are making it hard for us. And with that proposed bill if approved, people will simply choose stablecoins (those that would qualify) and adoption of stablecoins will grow.

Bitcoin is not used for "daily transactions" and never will be. The Bitcoin network currently handles ~500k to 1M transactions per day, and it requires about $60 billion in hardware to do so. That's about 1/10,000th of the number of credit card transactions that happen on peak days. And nobody is going to wait 5-30 minutes to pay for their coffee in the morning. It's ridiculous.

Bitcoin is an investment, not a payment method.

And meanwhile, stablecoins are specifically made for payments, including some stablecoins that are made for extremely small payments of $0.01 for instance and have a clearance time in the milliseconds and have absolutely now transaction fees whatsoever.

People who use stablecoins actually accept risks.
Most stablecoins can be frozen in your wallets.
Stablecoins and Blacklists.
Stablecoins can be frozen by issuers.

Stablecoins are a payment method, not an investment. (see above )

Stablecoins should be used to move money from point A to point B. If you are holding a significant amount of money for a significant amount of time, you should invest this money, not leave it in a cash equivalent like a stablecoin.

if you use stablecoins for what they are intended, those risks you mention (which are the same risks for any mainstream investment) are mitigated.

[bitmover]

So I found this interesting proposed bill called the ADAPT Act, which was introduced last September 30, 2026, which will make stablecoins more convenient than Bitcoin for our daily lives. This is written under “SEC. 1034. Certain sales, exchanges, or dispositions of stablecoins”, which says:

“(a) In general.—No gain or loss shall be recognized on the sale, exchange, or disposition of covered payment stablecoins to purchase products or services.”

So it seems unfair, because when Bitcoin is used for purchases, you have to pay capital gains tax, while using qualifying stablecoins, they would already be exempted.

Stablecoins became important as a treasury bonds buying force.

Bloomberg reports that officials are discussing public-private partnerships to expand dollar-backed stablecoins abroad. Treasury, the State Department and the US International Development Finance Corporation could potentially play roles. No countries, companies or funding commitments have been announced.

The broader policy is already public. Trump ordered his administration in 2025 to promote the growth of legitimate dollar-backed stablecoins worldwide.

The logic is simple.

Someone abroad buys $1,000 of a reserve-backed stablecoin. The issuer then needs assets backing those tokens. For major stablecoins such as USDC and USDT, those reserves include US government securities and related dollar assets.

More stablecoins can therefore mean more buyers for Treasury debt.

https://beincrypto.com/trump-stablecoin-plan-us-debt-usdc-usdt/

US is becoming desperate to push their Treasury debt to more investors, and stablecoins are the perfect buyer for now. They are growing rapidly and their investors even prefer that Tether, Circle, etc hold treasuries than other assets.

[stadus]

US is becoming desperate to push their Treasury debt to more investors, and stablecoins are the perfect buyer for now. They are growing rapidly and their investors even prefer that Tether, Circle, etc hold treasuries than other assets.

They are not just being desperate, they are also being smart as they want to increase the demand for stablecoins, which could increase the demand for US Treasury securities and result in lower borrowing costs for the US government.

[EluguHcman]

A very interesting thread. 

So imagine with that rule, they are not helping Bitcoin grow its adoption for daily transactions as they are making it hard for us. And with that proposed bill if approved, people will simply choose stablecoins (those that would qualify) and adoption of stablecoins will grow.

How funny with this Bitcoin haters.
Why not this new term of tax be effective to the stable coin users instead of Bitcoin? Well, I understand that while they are trying to fight against Bitcoin adoption, they are equally giving conditional policies to those that uses Bitcoin for payments believing that Bitcoin is resourceful while the stable coins is not instead, the stable coin is even flexible to be devalued in the economy market.

However, the government will always want to promote their own and finds any means of how to legally extort those using Bitcoin.
And because most crypto users don't prioritize on keeping privacy and the stable coin will definitely be in a wider range of adoption for transactions than Bitcoin and perhaps, due to Bitcoin volatility too, there is said to be more reasons why stable coins will be the masses choices. This is exempt the taxing policy but how to satisfy users from lost.

[Aanuoluwatofunmi]

So I found this interesting proposed bill called the ADAPT Act, which was introduced last September 30, 2026, which will make stablecoins more convenient than Bitcoin for our daily lives. This is written under “SEC. 1034. Certain sales, exchanges, or dispositions of stablecoins”, which says:

“(a) In general.—No gain or loss shall be recognized on the sale, exchange, or disposition of covered payment stablecoins to purchase products or services.”

So they are seeing stable coin as more of being a Fiat than crypto or was it because of the fact that stables appeared to the value of USD? I'm sure this is not just to show or express their interest in cryptocurrency but rather to make the people feel as if they are in support of what everything they are doing, they are not even considering for bitcoin and you expect them to do much that will favor every users in crypto than what they will spend to benefit from it at the end, they had better stop playing politics with people's mentality here.

[d5000]

I was quite surprised to learn that in several countries you are also taxed with capital gains tax if you hold another fiat currency (e.g. you're in Europe and hold the US dollar to "hedge" against an Euro crash) and the currency you held appreciates against the local currency. The Swiss Franc for example has appreciated more than 60% in the last decades against the USD so this isn't merely a theoretic question.

In practice, as most people don't hold foreign currencies for more than tourism, except in Argentina perhaps , I haven't heard about anybody being taxed this way, but it seems to be in theory possible in countries like Italy, Germany and France. And in the US if you realize such a profit in foreign currency, according to this article you can be charged income tax ... (but at least there are exceptions for tourism and small profits).

This means that unfortunately, we'll probably not get rid of such a tax even if Bitcoin is used more as a currency, because it would still not be a local currency but an "asset", "property" or "good" just as all foreign currencies.

[legiteum]

Why not this new term of tax be effective to the stable coin users instead of Bitcoin? Well, I understand that while they are trying to fight against Bitcoin adoption, they are equally giving conditional policies to those that uses Bitcoin for payments believing that Bitcoin is resourceful while the stable coins is not instead, the stable coin is even flexible to be devalued in the economy market.

However, the government will always want to promote their own and finds any means of how to legally extort those using Bitcoin.
And because most crypto users don't prioritize on keeping privacy and the stable coin will definitely be in a wider range of adoption for transactions than Bitcoin and perhaps, due to Bitcoin volatility too, there is said to be more reasons why stable coins will be the masses choices. This is exempt the taxing policy but how to satisfy users from lost.

You are asking for Bitcoin to be treated differently than any other investment in the entire world. In other words, you are begging the US government to give Bitcoin special privileges in order to make the price of Bitcoin go higher, and for it to have an unfair advantage over every other kind of investment.

Even after the Bitcoin community got its wish and elected Trump, that's not going to happen. Every single person in the world who does not invest in Bitcoin would want the same advantage.

So they are seeing stable coin as more of being a Fiat than crypto or was it because of the fact that stables appeared to the value of USD? I'm sure this is not just to show or express their interest in cryptocurrency but rather to make the people feel as if they are in support of what everything they are doing, they are not even considering for bitcoin and you expect them to do much that will favor every users in crypto than what they will spend to benefit from it at the end, they had better stop playing politics with people's mentality here.

People are overthinking this bill, it's far simpler than what you are saying. All they are doing is making it clear that something that does not incur a capital gain doesn't pay capital gains tax. Stablecoins (insofar as they don't pay interest) do not make you money, they just store it for you. There's no tax if there's no gain.

But sure, let's turn everything into an anti-Bitcoin conspiracy because it's so much fun.  

[Ambatman]

Well stablecoins don't really appreciate in themselves except well when compared with other currency.
Take my country for example Stablecoins are tax though with 1% as an exemption and other conditions that make such occurrence rare.

Gains on stablecoins are determined by reference to the underlying fiat currency, and stablecoin sales are exempt from the 1% withholding on disposals

https://www.licenseadvisory.co/nigeria-crypto-tax-stablecoin-nrs-guidelines-2026

There are countries that offer some level of exemption to Bitcoin like Germany
All countries are not same has its strengths and weaknesses in respect to Bitcoin.
Not all can be Bitcoin friendly or enemy.

[BlackHatCoiner]

The people who try to make a sense about why stablecoins and not Bitcoin are missing the big picture. Capital gains tax is not a fair tax, and every act on top of this fact will also be unfair. The reason is simple; inflation is not a fair tax.

Capital gains tax means that you're taxing me on "fiat gains". But my asset may have not increased in demand, the USD shitcoin people are trading it with is devaluing, and you want to tax me because people are trading the shitcoin for Bitcoin?

Capital gains tax is what the government does to those who have managed to escape the inflation the same government causes.

[DaveF]

All the proposal is saying here is that stablecoins, by definition, don't produce any kind of gain.

Stablecoins do not produce gains for the holders they do make money (fiat) for the issuers.
You have 1 USDC in a year you still have 1 USDC

However. Circle who issues it is holding the cash that you bought the USDC with in interest earning accounts / products.

https://www.circle.com/transparency

So they are sitting there making well over 3% on your money.

Other stablecoins might vary but most of them are earning some money for the people issuing it.


-Dave

[legiteum]

The people who try to make a sense about why stablecoins and not Bitcoin are missing the big picture. Capital gains tax is not a fair tax [...]

Well, no tax is "fair"--it's tax after all.

That said, should they exempt a portion of your capital gains based on the year's inflation rate? That would be interesting, but in the US it wouldn't amount to much (~2.7% last year) so I doubt many people would get behind that. But it's not impossible.

Also, in the USA, for years the Republican party has pushed to remove capital gains tax for everybody on everything. This was looked at as a tax cut for the rich though (because it's a tax cut for the rich), so this policy idea was never popular.

At the end of the day a government has to raise money somehow. You can debate how, but reducing taxes in one area means raising taxes in another area.

All the proposal is saying here is that stablecoins, by definition, don't produce any kind of gain.

Stablecoins do not produce gains for the holders they do make money (fiat) for the issuers.
You have 1 USDC in a year you still have 1 USDC

Yes, and those companies will pay taxes on the interest they earn, i.e. on their revenues. Depending on the situation, that could actually be more than an individual would pay in cap gains.

So they are sitting there making well over 3% on your money.

Other stablecoins might vary but most of them are earning some money for the people issuing it.

This is the way they pay for the service they are offering, yes (that, and all except Haypenny charge transaction fees).

As I said above, you should never "invest" in cash equivalents like USD or stablecoins, and most serious investors don't.

Just to repeat the above (with the same typography ):


Bitcoin is an investment, not a payment method.

Stablecoins are a payment method, not an investment.

[Magnus Georgem]

Yeah, if stablecoin purchases get the exemption while BTC doesn’t, people will naturally use stablecoins for everyday spending. Bitcoin would stay more of a savings/settlement asset until the tax rules become simpler. The $10 fee exemption feels pretty minor compared with that.

[Dogedegen]

The people who try to make a sense about why stablecoins and not Bitcoin are missing the big picture. Capital gains tax is not a fair tax, and every act on top of this fact will also be unfair. The reason is simple; inflation is not a fair tax.

Capital gains tax means that you're taxing me on "fiat gains". But my asset may have not increased in demand, the USD shitcoin people are trading it with is devaluing, and you want to tax me because people are trading the shitcoin for Bitcoin?

Capital gains tax is what the government does to those who have managed to escape the inflation the same government causes.

Even if you are right, I think this is a separate topic and not directly about this thread. Capital taxes can exist but they need to be reworked so that the rich pay a lot and low new worth or medium net worth people don't pay anything, that would be a more fair way of keeping them if the decision was to try to keep them. When it comes to this particular Act, the user is wrong to bring it up. There is no good reason why Bitcoin would be exempt from taxes. It behaves like an asset that often makes very big gains for its holders. You don't make money buy buying 100 USDT with $100. When you sell it back, it is worth $100.

Yeah, if stablecoin purchases get the exemption while BTC doesn’t, people will naturally use stablecoins for everyday spending. Bitcoin would stay more of a savings/settlement asset until the tax rules become simpler. The $10 fee exemption feels pretty minor compared with that.

It would be appropriate to make an exemption for small amounts, there were some proposals for this kind of thing. Let's say that if they exempt it for purchases under $1000, that would help a lot for spending. What users seem to fail to understand is that stablecoins are exempt effectively even without this because there is no gain! This regulation just wants to reduce the accounting and taxation burden, so people do not need to document and track all of this when there is no gain anyway. Things that do not create gains are exempt by their nature..

[Botnake]

Why not this new term of tax be effective to the stable coin users instead of Bitcoin?

IMO, Should be bought

Well, I understand that while they are trying to fight against Bitcoin adoption, they are equally giving conditional policies to those that uses Bitcoin for payments believing that Bitcoin is resourceful while the stable coins is not instead, the stable coin is even flexible to be devalued in the economy market.

Obviously they would support stablecoins that are backed by the US dollar as that will increase the demand for USD around the world.
There you will see how they monopolize things, it's not about Bitcoin being volatile and transactions being slow, but it's about where they will benefit the most.

So they are seeing stable coin as more of being a Fiat than crypto or was it because of the fact that stables appeared to the value of USD?

They are still crypto as they uses as they are using network like eth, tron, bnb, (etc).
And the fact that its back by USD, the more they will regulate it favorable to the users so it will increase adoption.

This means that unfortunately, we'll probably not get rid of such a tax even if Bitcoin is used more as a currency, because it would still not be a local currency but an "asset", "property" or "good" just as all foreign currencies.

That's the main point as long as they consider it as property, that capital gains will remain.

Capital gains tax means that you're taxing me on "fiat gains". But my asset may have not increased in demand, the USD shitcoin people are trading it with is devaluing, and you want to tax me because people are trading the shitcoin for Bitcoin?

I think capital gains tax occurred because the value of your asset increased.
You buy bitcoin at $1000  and sold at $1500, you naturally have to recognize $500 as taxable capital gain.

If value decreases compared to the purchase price hence no tax is computed.

So government wants to take a share of your profit, but if you lose they will say "who you?"

[X-ray]

Even before this, capital gain tax on stablecoin was already negligble.

The thing is, recent regulations relating to crypto have always been about stablecoin and tokenizing stocks, even fundraising exemption for crypto projects have nothing to do with Bitcoin.

The U.S. government right now is more focused to build the ecosystem of crypto around the U.S. economy, our only hope is Digital Asset Tax Certainty Act.

Cultivating multi trillion dollar stablecoin economy which centered around their treasury bond as the primary demand seems to be prospective indeed.

[Questat]

Even before this, capital gain tax on stablecoin was already negligble.

Exactly, because trading profits on stable coins where its where they will earn big based on volume is not applicable in this act, those are trading profits, not capital gains.

The thing is, recent regulations relating to crypto have always been about stablecoin and tokenizing stocks, even fundraising exemption for crypto projects have nothing to do with Bitcoin.

The U.S. government right now is more focused to build the ecosystem of crypto around the U.S. economy, our only hope is Digital Asset Tax Certainty Act.

Cultivating multi trillion dollar stablecoin economy which centered around their treasury bond as the primary demand seems to be prospective indeed.

They want to increase the demand, and this Act, though not yet approved, I have a feeling it will easily be approved as it's favorable to them.
With the ease of doing business (no capital gains tax on qualifying transactions), people will use stablecoins for regular transactions, which will result in increasing demand, and that could lead to lower borrowing costs for the US (clever move).

[BlackHatCoiner]

Well, no tax is "fair"--it's tax after all.

By "fair" I mean explicitly declared by the State. Inflation is a hidden tax.

That said, should they exempt a portion of your capital gains based on the year's inflation rate?

No, the inflation rate is a completely inaccurate and pointless metric, because a house does not go up at the same percentage as Cheetos garbage. The capital gains tax should simply be abolished.

At the end of the day a government has to raise money somehow. You can debate how, but reducing taxes in one area means raising taxes in another area.

No, it does not necessarily mean they should steal from elsewhere, but even if they must somehow raise taxes, at least they should not tax based on the consequences of the hidden tax they impose (by inflation). This is simply the most unfair tax, and the people who claim it is done to take from the rich and not the poor have a complete flawed economics background. The capital gains tax and inflation are directly affecting the poor, and primarily the poor, as they lead to increase in prices and capital going outside the country.