Senator Cynthia Lummis’ New Crypto Tax Bill

What is the Bill About?

U.S. Senator Cynthia Lummis, hailing from Wyoming, has introduced a brand new draft bill aimed toward updating the tax code for digital assets like cryptocurrencies. This move comes just days after a federal spending bill passed with none mention of crypto.

Main Features of the Bill

Lummis’ proposal includes several key points:

• A de minimis exemption for crypto transactions and capital gains under $300, with an annual cap of $5,000.
• Deferring taxes on mining and staking rewards until the assets are sold, as a substitute of once they’re earned.
• Exempting crypto lending agreements and charitable contributions made in digital assets from taxation.

“This groundbreaking legislation is fully paid for, cuts through bureaucratic red tape, and establishes common-sense rules that reflect how digital technologies function in the real world,” Lummis stated. “We cannot allow our archaic tax policies to stifle American innovation.”

Why is This Important?

The bill comes at a time when many individuals within the digital asset community are frustrated. They feel there is not a transparent and fair tax treatment for cryptocurrencies within the U.S. Currently, the IRS treats most crypto activities as taxable, even for on a regular basis uses like buying a coffee with bitcoin.

De Minimis Exemption

Many within the industry have long advocated for a de minimis exemption to avoid punishing small, routine transactions. Lummis’ bill addresses this by allowing as much as $5,000 annually in untaxed crypto gains under specific thresholds, which many see as a step in the appropriate direction.

Pressure on Lawmakers

There’s growing pressure on lawmakers to deal with crypto taxation amid broader regulatory uncertainty. For example, in June, changes were introduced to the Digital Asset Market Clarity Act of 2025. This would exempt developers of decentralized protocols from being classified as money transmitters, thus reducing their tax and compliance burden in comparison with centralized platforms.

Congress and the Spending Bill

This week, the spending bill passed Congress with none crypto language. However, lawmakers are reportedly attempting to add last-minute provisions before it reaches President Donald Trump’s desk.

Lummis and Her Standalone Bill

Lummis, often called a long-time crypto ally, sees her standalone bill because the clearest path forward. This move comes just six months after the U.S. House of Representatives voted 292-132 to overturn an IRS rule. This rule required crypto platforms, including decentralized finance (DeFi) entities, to gather and report taxpayer and transaction data.

Concerns from Texas Democrat Lloyd Doggett

Texas Democrat Lloyd Doggett has expressed concerns that overturning this rule may benefit tax evaders and criminal networks, potentially increasing the national debt by $4 billion. The IRS has argued that these measures are consistent with existing broker regulations and usually are not intended to discriminate against the DeFi industry.

The Future of Crypto Taxation

As the talk continues, Lummis’ bill represents a major step towards modernizing how digital assets are treated within the U.S. tax system. It acknowledges the unique nature of cryptocurrencies and goals to supply a more equitable framework for users and developers alike.

Looking Ahead

With the crypto world rapidly evolving, the introduction of this bill could function a catalyst for further discussions and legislative efforts. As digital assets turn into more integrated into every day life, clear and fair tax policies will probably be essential to foster innovation and growth on this exciting recent frontier.

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