Illinois draft crypto tax rules detail DeFi, stablecoin treatment

What happened

The tax is scheduled to take effect on Jan. Illinois’ draft rules spell out how its 0.2% digital asset transaction tax would apply to stablecoins (a digital token meant to hold a fixed value, usually one dollar), DeFi platforms, crypto bridges and self-custody transfers.

The new draft rules provide implementation details for the law, including which transactions and digital assets would fall within its scope. Under the proposal , stablecoins would be treated as digital assets subject to tax, while nonfungible tokens would be excluded.

DeFi transactions would generally be exempt unless users pay fees considered “valuable consideration,” such as protocol fees collected for operating or maintaining a platform. Network fees and swap fees paid solely to liquidity providers would not trigger the tax.

The rules also identify crypto bridging as taxable exchange activity when conducted through a digital asset broker for consideration. Illinois approved the Digital Asset Tax Act in June , despite opposition from crypto industry groups.

The Illinois Department of Revenue said Monday that it is accepting comments on the draft through Oct. Readers are encouraged to verify information independently.