Senate Passes Trump Budget Bill Without Cryptocurrency Provisions

The Senate has passed President Trump's comprehensive budget bill, a significant legislative achievement that marks a major step towards the president's economic agenda. The bill, spanning over 1,000 pages, encompasses a wide range of tax cuts and spending priorities. Notably absent from the legislation are any references to digital assets, including Bitcoin, Ethereum, or blockchain technology. This omission is significant, as it indicates a lack of immediate regulatory focus on the cryptocurrency sector within this particular piece of legislation.

The passage of the bill came after a lengthy and contentious process, with Senate Republicans narrowly securing its approval. The bill now moves to the House of Representatives for further consideration. The legislation includes permanent extensions of the 2017 tax cuts, substantial reductions in corporate tax rates, and new tax incentives primarily aimed at benefiting high-income individuals and corporations. The absence of any mention of cryptocurrencies or related technologies suggests that the Senate did not prioritize regulatory measures for digital assets in this round of legislative action.

Senator Cynthia Lummis, a vocal advocate for digital assets, argued for changing the tax code for crypto mining and staking. She argued that miners and stakers were taxed twice, once when they received block rewards and then again when they had to sell them. Currently, the IRS classifies profits from crypto mining and staking as income, which is taxed at fair market value at the time of receiving them. Once the miners sell their crypto, they have to report capital gains and pay a flat rate on these profits. While these taxes don’t strictly entail double taxation, miners and stakers complain that the system is overly burdensome. Namely, they have to pay taxes before realizing any profits, or before converting any crypto to fiat.

Lummis also advocated for tax exemptions for small crypto transactions, or a “de minimis” rule. These are often transactions that involve small payments for gas fees, small transfers, etc. While transactions don’t generate much tax income, they are a significant burden when it comes to tax reporting. The crypto industry was one of the biggest donors in the November 2024 elections. They supported candidates from both parties, raising over $190 million for their campaigns.

The Senate's decision to exclude cryptocurrency-related provisions from the bill is noteworthy, given the growing interest and investment in digital currencies. The lack of regulatory guidance on digital assets could have implications for the future of cryptocurrency in the United States. However, it is important to note that the absence of specific provisions in this bill does not preclude future legislative action on the matter. The Senate's focus on tax cuts and spending priorities indicates a strategic approach to addressing immediate economic concerns, while leaving the door open for further discussions on digital assets in the future.

The passage of the bill also highlights the political dynamics at play within the Senate. The narrow approval of the legislation underscores the partisan divisions that have characterized much of the legislative process in recent years. The bill's success in the Senate was secured with the support of Vice President JD Vance, who cast a tie-breaking vote following abstentions from three Republican senators. This vote underscores the delicate balance of power within the Senate and the importance of bipartisan support in passing major legislation.