A coffee bought with a qualifying dollar stablecoin would avoid gain-or-loss recognition under the ADAPT Act that Sen. Steve Daines released Sept. 30. The same coffee bought with Bitcoin would still trigger the cost-basis calculation and capital gain or loss reporting that attach to spending digital assets.

Bloomberg Law reported Sept. 25 that Daines had circulated a draft and expected to introduce it the next week. The 56-page text released Sept. 30 carries the title Aligning Digital Assets with Principles of Taxation Act and lists Sens. Cynthia Lummis , Bernie Moreno and Tim Scott of South Carolina as cosponsors.

Under current IRS guidance, paying for goods or services with digital assets in any amount is a disposition. Holders of personal or investment assets must calculate and report capital gain or loss, which depends on the asset's value and cost basis.

A payment can produce a gain, a loss, or a break-even result, and the IRS uses a cup of coffee as its own example. A $5 Bitcoin purchase with an allocated basis of $3 produces a $2 capital gain that belongs on the return.

New section 1034 of the tax code would treat the disposition of covered payment stablecoins to buy products or services as a nonrecognition event. The relief covers gain or loss on the token itself, and sales taxes and other purchase obligations stay in place.

The token must be a qualified US dollar stablecoin, meaning one issued by a permitted payment stablecoin issuer under the GENIUS Act .

A foreign issuer qualifies through OCC registration or a Treasury finding that its home regime is comparable. It must appear in Treasury's most recent report before the payment, and the taxpayer must have acquired it at a price within 3% of $1.00.

Treasury would publish that report at least every three months, listing each qualified stablecoin actively traded within 3% of $1.00 during the 12 months ending the prior month. Users and payment companies would check the latest list when making a purchase.