Senator Lummis Proposes $300 Exemption for Small Crypto Transactions

Senator Cynthia Lummis has proposed a significant amendment to President Donald Trump’s comprehensive budget reconciliation bill, focusing on reforming the taxation of cryptocurrency transactions. The amendment, presented on June 30, aims to exempt small crypto transactions from taxation and clarify the tax treatment of mining and staking rewards. Lummis is advocating for the inclusion of this amendment in the extensive legislative package, which outlines major fiscal and regulatory changes.

The proposal introduces a de minimis exemption, which would exempt crypto transactions under $300 from capital gains tax. Additionally, it sets an annual cap of $5,000 for untaxed crypto activity to manage the volume of transactions for frequent users. This change is intended to reduce the tax burden on individuals who engage in small-scale crypto transactions, making cryptocurrency more accessible for everyday use.

One of the key aspects of the amendment is the adjustment to the tax treatment of staking and mining rewards. Currently, these rewards are taxed at the time of receipt. The proposed change would align taxation with the point of sale, addressing concerns about double taxation. This modification is supported by crypto advocates who believe it would simplify compliance and encourage long-term holding and mainstream usage of cryptocurrencies.

Beyond staking and small trades, the amendment also addresses other forms of crypto activity, including lending, wash sales, and charitable contributions. These adjustments are aimed at aligning existing tax laws with the realities of the digital asset economy. Supporters argue that these changes would foster innovation and create domestic jobs by providing clarity around staking rewards and other crypto-related activities.

The amendment has garnered strong support from crypto advocacy groups and industry leaders. The Bitcoin Policy Institute and the Solana Policy Institute, along with prominent figures like Michael Saylor, have publicly endorsed the proposal. Matthew Pines of the Bitcoin Policy Institute urged the public to engage with members of the Senate Finance Committee, emphasizing that such reforms would support everyday compliance and expand adoption. Kristin Smith from the Solana Policy Institute highlighted that clarity around staking rewards could drive innovation and job creation.

The fate of the amendment remains uncertain, as the Senate is set to vote on various amendments to the bill within the week. President Trump has urged lawmakers to finalize the bill before July 5. Once it clears the Senate, it will also need to pass through the House of Representatives before becoming law. The outcome of these votes will determine whether Lummis' proposed changes to crypto taxation will be implemented, potentially reshaping the landscape of digital asset usage in the United States.