U.S. Senator Cynthia Lummis (R-WY) has introduced a landmark bill aimed at modernizing the nation’s approach to cryptocurrency taxation. The proposed legislation seeks to exempt digital asset transactions under $300 from capital gains taxes, a move designed to simplify compliance and encourage broader adoption of cryptocurrencies for everyday use.
Key Highlights of the Bill
- $300 De Minimis Exemption:
Crypto transactions below $300 would be free from capital gains tax, making it easier for Americans to use digital assets for small purchases without complex tax calculations. The exemption is capped at $5,000 in total annual transactions per taxpayer. - Mining and Staking Relief:
The bill proposes that rewards from mining and staking will only be taxed when the assets are sold or exchanged, ending the current practice of taxing these rewards upon receipt. - Expanded Lending and Trading Rules:
The legislation extends securities lending rules to digital assets and introduces a 30-day wash sale rule for crypto, closing loopholes and aligning digital asset taxation with traditional financial instruments. - Charitable Donations Simplified:
The bill removes the requirement for valuation reports on crypto donations, streamlining the process for charitable giving. - Projected Fiscal Impact:
According to the Joint Committee on Taxation, the reform is expected to generate approximately $600 million in net revenue from 2025 to 2034, balancing innovation with fiscal responsibility.
Senator Lummis’ Vision
Senator Lummis emphasized the importance of updating tax laws to reflect the realities of the digital economy. “We cannot allow our archaic tax policies to stifle American innovation. My legislation ensures Americans can participate in the digital economy without inadvertent tax violations,” she stated.
Next Steps
The bill is currently open for public comment and is expected to be debated in Congress in the coming months. Senator Lummis aims to expedite its passage and deliver it to the President for approval, marking a significant step forward in U.S. crypto policy.
Summary:
Senator Lummis’ new bill could reshape the landscape for crypto users and businesses, offering tax relief for small transactions and clarifying rules for miners, stakers, and traders. If enacted, it would represent a major shift toward a more innovation-friendly regulatory environment for digital assets in the United States.
