U.S. Aims to Lead Global Crypto Race with New Tax Framework

The U.S. Senate Finance Committee is set to hold a pivotal hearing on October 1, 2025, to examine the taxation of digital assets, marking a significant step in the Trump administration’s efforts to establish regulatory clarity for the crypto industry. The session, titled “Examining the Taxation of Digital Assets,” will feature testimony from key industry stakeholders, including Lawrence Zlatkin, Vice President of Tax at Coinbase Global, and Jason Somensatto, Director of Policy at Coin Center. The hearing follows a broader push for legislative updates to the Internal Revenue Code (IRC) to address the unique challenges posed by digital assets, which currently lack a cohesive tax framework under existing laws.

Senator Cynthia Lummis (R-WY), a leading advocate for crypto-friendly policies, has introduced a standalone bill aimed at modernizing tax rules for digital assets. The proposal includes a de minimis exemption for transactions under $300, eliminating double taxation on crypto payments, and aligning digital asset lending with securities lending rules. A critical component of the bill is its statutory definition of digital assets as “a digital representation of value recorded on a cryptographically secured distributed ledger,” excluding traditional financial assets and real-world property. This definition seeks to resolve ambiguities arising from conflicting classifications across federal agencies.

The Lummis bill also addresses operational realities in the crypto ecosystem by deferring taxation on staking and mining rewards until disposal, aligning with economic realization principles. For traders and dealers, the legislation introduces mark-to-market accounting, allowing gains and losses to be recognized based on fair market value at year-end, mirroring rules for securities and commodities traders. Additionally, the bill proposes extending the 30-day wash sale rule to digital assets, closing a known tax-loss harvesting strategy while maintaining exceptions for dealers and stablecoins.

The October 1 hearing may face delays if Congress fails to avert a government shutdown before the September 30 funding deadline. Such delays could impact the timeline for advancing the Lummis bill, which has already faced challenges in the House. The bill’s provisions include a 10-year sunset clause for major reforms, reflecting lawmakers’ view of the proposed changes as transitional measures. This temporal limitation underscores the need for ongoing stakeholder engagement to refine the framework as markets evolve.

The hearing and the Lummis bill are part of a broader effort to position the U.S. as a global leader in digital asset innovation. The Trump administration’s executive order on digital assets explicitly opposes central bank digital currencies (CBDCs), emphasizing that “lawful and legitimate” stablecoins support the sovereignty of the U.S. dollar. This stance contrasts with the European Union’s Markets in Crypto-Assets (MiCA) regulation, which imposes stringent oversight on stablecoin issuers and treats digital assets as e-money tokens. While the U.S. and EU frameworks share some convergence—such as reserve requirements for stablecoins—the U.S. approach prioritizes private-sector innovation over regulatory expansion.

The Senate’s focus on crypto taxation aligns with growing institutional interest in digital assets, including the potential approval of altcoin spot ETFs and increased institutional capital inflows. The Lummis bill’s emphasis on reducing compliance burdens could facilitate broader adoption of crypto for everyday transactions, such as microtransactions and staking, by minimizing punitive tax consequences. However, the bill’s anti-abuse provisions and administrative safeguards, including Treasury guidance on wallet segregation and broker reporting, aim to balance innovation with regulatory integrity.

Source: [1] title1 (https://www.cryptotimes.io/2025/09/25/senate-finance-committee-to-hear-crypto-tax-plans-on-october-1/) [2] title2 (https://www.forbes.com/sites/tonyaevans/2025/07/09/lummis-crypto-tax-reform-bill-could-transform-us-digital-asset-rules/) [3] title3 (https://beincrypto.com/ripple-ceo-senate-hearing-crypto-future/) [8] title8 (https://www.atlanticcouncil.org/blogs/econographics/the-2025-crypto-policy-landscape-looming-eu-and-us-divergences/) [9] title9 (https://www.weforum.org/stories/2025/09/us-genius-act-eu-mica-convergence-crypto-rules/)