U.S. senator Cynthia Lummis has proposed a new bill to review and streamline crypto taxation with the aim of exempting certain transactions.
The bill presented to the senate on 3 July seeks to address issues such as double taxation and unclear tax policies affecting crypto staking, mining, and lending.
Making crypto easier
Cryptocurrencies have received much support from the current Donald Trump government, especially with the recent passage of the GENIUS Act into law.
However, cryptocurrencies seem to be taxed multiple times in several transactions that should be exempted, hence the bill by Senator Lummis.
The bill differentiates between digital asset transactions, separating those that should be taxed from those that should be taxed.
It proposes a de minimis exemption for transactions under $300 and an annual cap of $5,000 on capital gains to lessen the tax burden on smaller investors.
Among other things, this encourages the participation in crypto for small investors by reducing their tax burdens.
It also seeks to defer taxes on mining and staking rewards until the underlying assets are sold, since these only become income after they are sold.
Similarly, the bill proposes exemption of crypto lending and donated assets from taxation, thus encouraging the growth of the DeFi sector and charity using digital assets.
Making up for the Big Beautiful Bill
President Trump’s proposed Big Beautiful Bill was passed by the house today, cutting taxes in significant ways. However, the bill does not address crypto taxation much, hence the need for Lummis’ bill.
It therefore serves as a make up bill to complement the Big Beautiful Bill in terms of crypto taxation in order to fully carry the industry along.
If it gets passed into law, this bill will be a big step towards making the U.S. more crypto-friendly and setting the industry on the path to greater growth.
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