U.S. Senator Cynthia Lummis is spearheading a renewed push for crypto tax reform, introducing a draft bill this week that proposes exemptions for small digital asset transactions and deferrals on mining and staking income — a move that’s invigorating the decentralized finance (DeFi) sector.
The proposed legislation seeks to ease the tax burden on crypto users by exempting gains under $300 per transaction (up to $5,000 annually), while deferring taxes on staking and mining rewards until the assets are sold. Lummis framed the bill as a step toward “common-sense rules” that reflect the digital economy’s realities and protect Americans from “inadvertent tax violations.”
The timing of the bill — coming just weeks after the bipartisan passage of the GENIUS Act to regulate stablecoins — suggests growing momentum for pro-crypto regulation in Washington.
DeFi leaders see the bill as a catalyst for increased institutional interest. $AAVE Labs founder Stani Kulechov, speaking at EthCC 2025, said the combination of regulatory clarity and dissatisfaction with traditional finance is accelerating interest in decentralized systems.
“The frustration with banking is pushing more capital into fintech and DeFi,” Kulechov said, calling real-world asset (RWA) tokenization a “multi-trillion-dollar opportunity.”
Adding to the momentum, Chainlink this week launched a new compliance standard, Chainlink ACE, designed to enable institutional capital to move onchain. Co-founder Sergey Nazarov called it the “final building block” needed to unlock $100 trillion in tokenized assets.
Lummis’s standalone bill follows her unsuccessful attempt to include similar crypto-friendly provisions in the federal budget reconciliation bill earlier this month. With support for blockchain innovation growing among policymakers and financial firms, the senator hopes her proposal can advance independently.
As regulatory guardrails begin to take shape, analysts suggest that traditional financial players will increasingly look to DeFi platforms for yield, efficiency, and global accessibility — a trend that could accelerate in the second half of 2025.
