@DanielV01
I believe you have basis rules backwards. If the property has increased in value, the recipient’s cost basis is the same as the giver’s cost basis. The recipient does not get a stepped up value equal to fair market value on the date of the gift.
[Edited to add: when I wrote this, I understood the question to be that the father owned one type of cryptocurrency and the son or daughter was going to convert it to a tethered currency after the gift. That would create a capital gain transaction. However, if the father is going to purchase the tether directly, the paragraph below does not apply to this taxpayer.]
I believe you are also incorrect with respect to the transfer of the cryptocurrency from its current form to a “stablecoin”. Each time cryptocurrency is converted, it is treated as a gain or loss at the US dollar value on that date. Even if the owner converts the current cryptocurrency to stable coin without going through US cash as an intermediary, the transaction is recorded as a capital gain or loss using the dollar value equivalent on the day of the conversion.
