In a significant step toward embracing the digital economy, U.S. Senator Cynthia Lummis has introduced a standalone bill aimed at reforming the tax treatment of cryptocurrencies. The legislation seeks to eliminate double taxation and provide a clear legal framework for crypto staking, mining, and lending activities.

🔹 Tax Exemptions for Everyday Transactions:
The proposed bill introduces capital gains tax exemptions for crypto transactions under $300, with an annual cap of $5,000. This move aims to facilitate daily crypto usage and reduce bureaucratic burdens for ordinary users.
🔹 Support for Charitable Donations:
Lummis also wants to simplify crypto donations. Her bill proposes tax exemptions for lending contracts and digital assets used in charitable giving — particularly for tokens with clearly identifiable market value due to active trading.
🔹 Taxation Upon Sale of Staked or Mined Assets Only:
The bill stipulates that mining and staking rewards will not be taxed upon receipt but only when sold or disposed of. These rewards would be treated as ordinary income, helping prevent liquidity issues from taxing unsold assets.
🔹 Mark-to-Market Option for Traders:
Lummis proposes allowing digital asset traders to elect mark-to-market accounting, similar to stock and commodity traders. This would remove unfair tax discrimination between asset types and better reflect economic activity.
🔹 Estimated Budget Impact:
According to the Joint Committee on Taxation, the bill could bring a net fiscal gain of approximately $600 million between 2025 and 2034.
Higher Chances of Passage Than Ever Before
Senator Lummis hopes her bill — backed by crypto advocates and some senators — will smoothly make its way to President Trump’s desk. With the current administration being more crypto-friendly, this initiative stands as one of the most promising efforts to modernize crypto legislation in the U.S.
Lummis has long been a pro-crypto voice in the Senate. Earlier this year, she was appointed Chair of the Senate Banking Subcommittee on Digital Assets. She’s also a prominent supporter of creating a U.S. Bitcoin reserve under the Treasury Department.
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