Senator Lummis Proposes New Crypto Tax Bill for Users and Miners

A new Crypto Tax Bill has been introduced in the U.S. Senate, and if passed, it could significantly reshape how digital assets like Bitcoin, Ethereum, and other cryptocurrencies are taxed. 

Spearheaded by Senator Cynthia Lummis, the bill aims to update what she calls “unfair” and outdated tax laws that stifle innovation and make it harder for everyday users to participate in the digital economy.

Crypto Tax Bill: To Simplify Crypto Use in Daily Life

For years, using crypto for everyday purchases in the U.S. has come with tax complications.

Every time someone buys coffee with Bitcoin or pays for groceries with Ethereum, they may be on the hook for capital gains taxes, even if the profit is only a few cents. 

The new Crypto Tax Bill is designed to eliminate that friction. 

Here’s the key highlights of the Crypto Tax Bill:

1. $300 Exemption for Small Payments

Under the proposed bill, crypto payments under $300 would not be taxed, meaning people could spend their digital coins like regular cash without worrying about triggering a taxable event.

Annual Cap: Users must keep their total tax-free gains under $5,000 per year to qualify.

Inflation Adjustment: Beginning in 2026, the $300 limit will adjust for inflation, ensuring it remains relevant over time.

Read Also: How to Calculate Income Tax in the US: A Clear Guide

2. Better Tax Treatment for Miners and Stakers

Today, miners and stakers often get taxed as soon as they receive tokens, even if they haven't sold them. The new bill proposes a much fairer approach:

- Taxes would only be applied when the assets are sold or used.

- This avoids double taxation and reduces unnecessary financial stress for those helping secure blockchain networks.

3. Tax Relief for Crypto Lending

Crypto lending is a growing space, but current tax laws treat lending as a taxable event. This bill aims to align crypto lending tax treatment with the stock market:

- Lending crypto won't be treated as a sale.

- Holders can lend and earn returns without triggering capital gains obligations.

4. Easier Crypto Donations

For those looking to donate crypto to charity, the bill would remove the requirement for expensive appraisals when donating commonly traded assets like BTC or ETH.

- This change could encourage more crypto philanthropy.

- Simplified donation rules could boost giving and save donors money.

Read Also: Plans for Bitcoin ETF, Japan Proposes Crypto Tax Reforms

Why the Crypto Tax Bill Matters for the U.S.

Senator Lummis argues that the current tax environment is discouraging innovation and pushing developers, startups, and investors to other countries. 

By modernizing crypto tax rules:

1. The Crypto Tax Bill could generate $600 million in tax revenue over the next 10 years.

2. More importantly, it could encourage innovation and growth in the U.S. digital economy.

3. It provides clarity and fairness for individuals and businesses working with blockchain technology.

Read Also: New Bitcoin Regulation in Japan: Slash Taxes and ETF Ban Revoke

Conclusion

The proposed Crypto Tax Bill is more than just a policy tweak, it’s a major step toward normalizing crypto use in everyday life. 

By reducing tax complexity for small transactions, improving conditions for miners and stakers, and aligning crypto lending with traditional finance, the bill supports both users and innovators. 

If passed, it could make the U.S. a friendlier environment for blockchain technology while maintaining a steady stream of tax revenue.

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FAQ

What is the Crypto Tax Bill?

The Crypto Tax Bill is a legislative proposal introduced in the U.S. Senate that aims to update and simplify the taxation of cryptocurrency transactions.

Who introduced the Crypto Tax Bill?

Senator Cynthia Lummis is leading the charge to reform outdated crypto tax rules.

What is the $300 rule?

The bill proposes that crypto transactions under $300 be exempt from taxation, making it easier to use digital assets for everyday purchases.

How will it affect crypto miners and stakers?

Miners and stakers will only be taxed when they sell or use their rewards, instead of being taxed upon receipt.

Will crypto lending be taxed?

No. Under this bill, lending crypto won’t be treated as a taxable sale, similar to traditional stock lending.

Does the bill encourage crypto donations?

Yes, it simplifies the process by removing the need for costly appraisals when donating commonly traded crypto assets.

When will the $300 limit adjust for inflation?

Starting in 2026, the $300 exemption limit will be adjusted annually for inflation.