On May 20, it was also a "Regulatory Day": In Washington, bipartisan lawmakers brought the revised PARITY bill back to the table, attempting to push for an IRS evaluation of a tax exemption for small digital asset transactions, to set a "99% cost basis non-taxable" rule for regulated payment tokens, and to design a safe harbor for intermediaries like brokers, all aimed at lowering the tax and liability thresholds for daily payments and compliant intermediaries; almost at the same time, the SEC Chairman opened a public comment period on "prediction market ETFs," with Bloomberg analyst Eric Balchunas pointing out that regulators preferred to extend the review period, gather more feedback, and were reluctant to rush the release of products seen as mechanism and risk-wise close to certain crypto assets. Meanwhile, in Singapore, the MAS directly revoked the main payment institution license of Bsquared Technology (BSQ) for its digital payment token business on May 14, citing serious violations, weak risk management, and multiple non-compliances in outsourcing and information disclosure, meaning BSQ could no longer provide related services locally. The attempts to reduce tax burdens on one hand, a cautious stance on product development, and the severe regulatory action on the license side altogether sketch a torn global regulatory map: the U.S. is reserving space for innovation and tax reform, while Singapore draws a harder line through revocations, forcing crypto businesses and users to renegotiate their compliance costs and operational coordinates between "tax-friendly" and "strict enforcement" jurisdictions.

PARITY Returns to Congress: Small Crypto Payments Seek Tax Relief

On this torn regulatory map, Congress's tax reform brush strokes land on the most trivial yet controversial grid: daily small payments. On May 20, 2026, when bipartisan lawmakers pushed the revised PARITY bill back to Congress, one point that was deliberately highlighted was the request for the IRS to study and evaluate the consequences of establishing a de minimis exemption for "small" digital asset transactions. In other words, the bill at this moment does not specify a concrete tax exemption amount for taxpayers but rather throws the question to the IRS: If daily small payments are loosened, how much tax base will be lost, will compliance risks increase, and how will regulatory costs change? It more resembles a formal "notice of investigation" rather than an immediate tax relief promise.

The real suspense lies in how, once clear de minimis rules are established in the future, the rules of the game for U.S. residents in retail payments and small transfers will be rewritten. If the tax burden on small transactions is alleviated, retail investors will no longer need to repeatedly weigh between "experiencing payment convenience" and "calculating taxes line by line afterward" when using crypto assets to buy a cup of coffee or pay a service fee; compliance friction will significantly decrease; on the merchant side, they can integrate such payment options more confidently without significantly increasing bookkeeping and reporting complexities. For platforms and wallet providers already operating in the U.S., this discussion initiated by Congress and examined by the IRS signifies that a key variable for future compliance design is taking shape—what ultimately determines whether U.S. small crypto payments can transition from the role of "speculative assets" to "everyday tools" will be where the tax-exempt boundary charted by the IRS is finally drawn.

Tax Benefits for Stablecoins, Yet Bitcoin is Left Out?

While debating small tax exemptions, the revised PARITY bill directly provided another more "hardcore" tax relief design: for recognized "regulated payment stablecoins," as long as the taxpayer's cost basis is not less than 99% of its redemption value, its disposal will be considered neither gain nor loss, resulting in no taxable event. Translated into everyday scenarios, this means that when you use these types of tokens recognized by regulators and highly pegged to fiat currency to buy coffee or pay a subscription, as long as the price has not deviated significantly from the pegged range, tax law treats it as if you neither earned nor lost anything, no longer requiring line-by-line cost calculations or reporting of gains and losses. This clause tries to align "regulated payment stablecoins" as closely as possible to "cash equivalents," clearly informing the market: As long as you operate within the licensing and regulatory framework, the tax friction will be minimized.

In contrast, assets like Bitcoin, which exhibit significant price volatility, still require calculations and reporting of gains and losses for every disposal under current rules—whether used for payments or rebalancing among accounts. The bill does not replicate a 99% safety net for such assets, and this deliberate distinction leads many industry insiders to have an intuitive sense: lawmakers are not talking abstractly about "digital assets," but rather using tax law to rank different asset types. Some worry that this approach, which only offers special benefits to regulated payment stablecoins, may weaken the attractiveness of high-volatility assets like Bitcoin in the payment sector, further locking them into the role of "investment targets" rather than "payment tools." Simultaneously, PARITY also established safe harbor arrangements for digital asset transactions conducted through brokers or taxpayer accounts, reducing the uncertainty faced by compliance intermediaries regarding tax responsibilities: as long as they fulfill information reporting and account management obligations within the recognized broker system, the accountability boundaries for intermediaries become relatively clear; this implicitly draws a new industry dividing line—compliant platforms and traditional brokers are encouraged to act as front-end gateways, while those outside the safe harbor must absorb higher tax and compliance risk premiums themselves.

Prediction Market ETF under Scrutiny: SEC Remains Tight-Lipped

Just as Congress debated how to "ease" the crypto tax burden, the SEC on the other end tightened the reins even further. Around May 20, 2026, the SEC Chairman sought public input on "prediction market ETFs," announcing neither approval nor a clear timetable, leaving behind a new product type that is "under assessment." Bloomberg senior ETF analyst Eric Balchunas pointed out the true rhythm of the regulators: this is not about going through the final procedural motions for listing, but rather about extending the review period, trying to gather comprehensive feedback from industry, academia, and investors before formally releasing it—intentionally prolonging the timeline is in itself a way of pricing risks.

The reason for this "special treatment" is that, in the eyes of many regulators and observers, prediction market ETFs have mechanisms and risk characteristics highly similar to certain crypto assets: prices can fluctuate dramatically around event outcomes, there is significant information asymmetry and manipulation potential, and the product attributes closely align with "betting on events," making them naturally susceptible to accusations of being akin to gambling. For issuers and traditional institutions preparing to file these ETFs, this means that all previous process templates established for index ETFs and bond ETFs are no longer sufficient: risk disclosures in the prospectus must be maximized, strategies to prevent manipulation, define target markets, and explain pricing logic must provide the SEC with a compelling compliance narrative; should the product structure touch upon the regulatory sensitivities regarding "speculation" and "responsibility boundaries," delays, additional requests for information, or even demands for redesign are just starting points. For these institutions, this round of "not releasing" the review itself represents the real test for product design and licensing layout in the coming years.

MAS Revokes BSQ License, Singapore Demonstrates Strong Regulation

On May 14, 2026, the Monetary Authority of Singapore directly "revoked" the main payment institution license of crypto liquidity provider Bsquared Technology (BSQ), with a very straightforward reason: its digital payment token business had serious violations, the overall risk management and conflict of interest controls were deemed weak, it failed to comply with outsourcing-related guidelines, and submitted false or misleading statements to regulators multiple times. Once the license is revoked, BSQ immediately loses the qualification to provide digital payment token services in Singapore, and the case has since been seen as one of Singapore's most stringent enforcement actions in this field in recent times.

For licensed crypto payment service providers already in line for applications or considering the Singapore route, the MAS is sending an extremely clear "zero-tolerance" signal: a license is not a safety net but a magnifying glass. Any serious violations on the business side, structural flaws in risk and conflict of interest control, any failures in outsourcing management, combined with even a single act of tampering with regulatory reports, will ultimately lead to the heaviest punishment outcomes. Unlike the path taken by the U.S., which is discussing "conditional loosening" through tax reform and product innovation, Singapore chooses high-pressure enforcement such as license revocation to pin the compliance red line directly above the license, forcing every institution wishing to engage in crypto payment in the region to establish risk, outsourcing, and information disclosure systems according to the strictest review standards right from the initial application, making "whether they can withstand MAS accountability" the primary premise of business design.

Global Crypto Map under Tax Reform Relaxations and Regulatory Tightenings

In the same week, the U.S. and Singapore presented the industry with two entirely different "admission tickets." On one side is the revised PARITY bill still at the proposal stage, featuring designs like "tax exemption for small transactions," "non-taxable treatment for regulated payment token disposal," and "broker safe harbor," signaling to businesses: as long as they are willing to channel transactions into regulated avenues, both tax burdens and intermediary responsibilities have a chance to be reduced, but the bill's wording may still be rewritten in the legislative process, and the IRS has yet to define final boundaries on de minimis thresholds, wash sale rules, staking rewards, and other details. On the other side, Singapore's MAS confirms its strong regulatory jurisdiction prioritizing licensing and enforcement through the direct revocation of BSQ's digital payment token licenses, reminding all licensed and applying institutions that the premise of providing crypto payment services locally is an ongoing investment of high costs to maintain risk management, outsourcing compliance, and information disclosure systems. As a result, the global compliance map is being redrawn: the U.S. is relaxing conditions on tax systems and new financial products, but the SEC has only opened a comment period for prediction market ETFs without giving a timetable, sending a cautious signal that says "open for discussion but don't rush to get on board"; whereas Singapore confirms itself as a licensing-driven, enforcement-prioritized jurisdiction, compelling businesses to redo their calculations when choosing headquarters locations, operational launches, and tax planning between "the U.S. with clearer tax expectations" and "the more rigid regulatory lines of Asian financial centers." What remains truly uncertain is whether PARITY can pass in its current direction, which gray areas the IRS will incorporate into its regulations, how the SEC will ultimately classify prediction market ETFs, and whether other Asian jurisdictions will replicate MAS's tough approach, as the risk and profit centers of global crypto businesses will also be redistributed based on these unresolved questions.

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