Senators Propose Tax Relief for US Crypto Firms, Targeting CAMT

Senators Cynthia Lummis and Bernie Moreno have introduced a new proposal aimed at providing tax relief for cryptocurrency firms in the US. The proposal suggests that companies should only be required to pay taxes on realized gains from digital assets, rather than on unrealized gains. This move is seen as a significant step towards creating a more favorable environment for cryptocurrency adoption in the country.

The proposal specifically targets the Corporate Alternative Minimum Tax (CAMT), a rule enacted in 2022 as part of the Inflation Reduction Act. The CAMT requires corporations with annual revenues exceeding $1 billion to pay at least 15% in taxes. Lummis and Moreno argue that applying this tax to unrealized crypto gains places an unfair burden on US crypto firms, potentially hindering their competitiveness against foreign counterparts.

Lummis and Moreno have highlighted the potential risks of the current tax structure, which they describe as unintended. They emphasize the need for fair competition if the US aims to lead the world in digital assets. The Senators have urged the US Treasury to revise the fair market value accounting interaction under the CAMT, aligning it with their proposal for unrealized gains.

Crypto analysts have expressed optimism about the potential impact of this proposal. They believe that if the US government accepts the proposal, it could significantly boost cryptocurrency adoption. The proposal, if passed, could level the playing field for US crypto firms, making it easier for them to compete globally. This move is seen as a step towards creating a more favorable regulatory environment for the cryptocurrency industry, which could attract more investment and innovation in the sector.