Senator Lummis Pushes to End Double Taxation on Crypto Mining and Staking

Senator Cynthia Lummis is leading an initiative to modify the upcoming comprehensive legislative package, referred to as the “One Big Beautiful Bill,” to reduce tax burdens on cryptocurrency users, with a particular emphasis on those involved in mining and staking. Lummis announced her efforts on the social media platform X, aiming to eliminate the double taxation currently applied to block rewards earned through staking or mining. Under current regulations, these rewards are taxed both upon receipt and upon sale, a system that Lummis argues stifles innovation within the digital asset sector.

The proposed amendment aims to align the taxation of crypto block rewards with that of other forms of self-generated property, which are taxed only upon sale. This move is backed by various advocacy groups, including the Bitcoin Policy Institute, Satoshi Action Fund, and the Solana Policy Institute, who have launched coordinated lobbying efforts to urge Congress to adopt these changes. Industry leaders, such as Cody Carbone of the Digital Chamber, have also expressed their support, describing the proposal as a practical solution that brings crypto taxation in line with the handling of physical goods.

The push for these tax reforms is part of a broader effort to exempt small crypto transactions from capital gains tax, a proposal that aims to simplify the tax reporting process and encourage wider adoption of digital currencies. Supporters argue that the current tax rules are cumbersome and act as a barrier to the growth of the crypto industry.

With the legislative package nearing the Senate floor, crypto advocates are hopeful that this amendment will be included, potentially paving the way for greater innovation and adoption within the United States. However, the exact language of the amendment has not yet been released, and it remains uncertain whether the tax changes will be presented as a single proposal or split into multiple parts. Senate negotiators are currently working on finalizing the details, and the outcome of these discussions will determine the fate of Lummis' proposed tax reforms.