Senator Lummis Introduces Cryptocurrency Tax Bill With $300 Transaction Threshold

Senator Cynthia Lummis has introduced a new cryptocurrency tax bill aimed at providing a more comprehensive digital asset tax framework in the United States. The legislation seeks to amend the Internal Revenue Code of 1986 to reform how the U.S. tax code treats digital assets. This bill comes after Lummis' previous attempts to include similar provisions in the One Big Beautiful Bill Act, which was recently passed by the Senate and is now awaiting final approval in the House.

The key feature of the bill is a $300 threshold for both transaction value and total gain, with a $5,000 annual exemption cap. This means that any purchase made with cryptocurrency under $300, such as buying coffee, groceries, or public transit, would no longer trigger a taxable event. The bill also includes a de minimis rule that exempts gains from small digital asset transactions, ensuring that minor transactions do not result in unnecessary tax burdens. Additionally, the legislation proposes to defer taxes on mining and staking rewards until the assets are sold, eliminating double taxation for crypto miners and stakers.

The bill also aims to achieve tax parity by treating digital assets similarly to other financial assets. It proposes expanding securities lending rules to include digital assets, clarifying that digital asset lending is generally not a taxable event. This move is intended to create a more level playing field for digital assets within the existing tax framework.

Lummis, who leads the Senate Banking Committee’s digital assets subcommittee, emphasized the importance of updating the tax code to embrace the digital economy. "In order to maintain our competitive edge, we must change our tax code to embrace our digital economy, not burden digital asset users," she stated. "This groundbreaking legislation is fully paid-for, cuts through the bureaucratic red tape and establishes common-sense rules that reflect how digital technologies function in the real world."

The senator also highlighted the need to prevent archaic tax policies from stifling innovation. "My legislation ensures Americans can participate in the digital economy without inadvertent tax violations," she added. Lummis has welcomed public comments on the bill, indicating a willingness to engage with stakeholders and refine the legislation as needed.

The introduction of this bill is part of a broader effort to regulate digital assets in the United States. Other notable digital asset regulation bills, such as the CLARITY and GENIUS Act bills, are currently on Congress’ calendar. These bills address various aspects of digital asset regulation, including market structure and stablecoin regulation. Following the election, Lummis also introduced the Bitcoin Act, which seeks to establish a BTC strategic reserve for the U.S.

The bill's provisions, if enacted, would provide much-needed clarity and relief for digital asset users, particularly those engaged in small transactions. By setting a clear threshold for taxable events and eliminating double taxation, the legislation aims to foster a more conducive environment for digital asset adoption and innovation. The bill's focus on tax parity and the expansion of securities lending rules further underscores the effort to integrate digital assets into the existing financial framework.