Senator Lummis Proposes Crypto Tax Reform to Boost US Innovation

Senator Cynthia Lummis has introduced new legislation aimed at reforming the tax treatment of digital assets, with the goal of generating $600 million from 2025 to 2034. The proposed bill seeks to exempt crypto transactions under $300 from capital gains tax, which would facilitate everyday crypto payments. The $300 threshold applies to both the transaction value and the total gain, with a $5,000 yearly cap and inflation adjustments beginning in 2026.

Under the proposed measures, crypto earned through mining or staking will be taxed only once when it’s sold or exchanged, not when it’s first received. This change aims to end the double taxation that miners and stakers currently face. Other key provisions include extending security lending rules to digital assets, implementing a 30-day wash sale rule for crypto transactions, and allowing dealers and traders to elect mark-to-market treatment.

Senator Lummis emphasized the importance of updating the tax code to support the growth of digital assets, stating that this overhaul is crucial for the US to maintain its leadership in global innovation and finance. She noted that the legislation is fully paid-for and establishes common-sense rules that reflect how digital technologies function in the real world. Lummis also expressed her commitment to ensuring that Americans can participate in the digital economy without inadvertently violating tax laws.

Lummis is seeking to pass the bill through Congress and deliver it to the President for approval and enactment. She has also welcomed public comments on the legislation, indicating her openness to feedback and potential amendments. The proposed changes are designed to streamline tax treatment for crypto holders and foster a more favorable environment for digital asset innovation in the US.