- The bill will exempt crypto transactions under US$300 from taxation, with an annual cap of US$5,000 reducing compliance requirements for small-scale users.
- It will remove double taxation on mining and staking rewards by deferring tax obligations until the assets are sold, with the rewards treated as ordinary income upon disposal.
- The legislation will clarify that crypto lending and digital asset donations are not taxable events, encouraging broader participation in decentralised finance and philanthropy.
US Senator Cynthia Lummis has tabled new legislation that would overhaul how digital assets are taxed in the United States, eliminating key burdens on users and businesses.
Filed on 3 July 2025, a day after similar provisions failed to be included in the One Big Beautiful Bill Act, the standalone proposal aims to modernise the Internal Revenue Code of 1986. Lummis is pushing the bill forward after crypto tax provisions were dropped from the latest federal budget package.
We cannot allow our archaic tax policies to stifle American innovation, and my legislation ensures Americans can participate in the digital economy without inadvertent tax violations.
US Senator Cynthia LummisOne of the key changes would be the introduction of a de minimis threshold of US$300 (AU$456) for crypto transactions, exempting such small trades and capital gains from taxation, with an annual exemption cap set at US$5,000 (AU$7,602).
This provision aims to ease the compliance burden on everyday users making low-value purchases. “The $300 threshold strikes a reasonable balance between tax compliance and practical usability of digital assets as a medium of exchange,” Senator Lummis said in a statement.
Related: Brazil Ends Crypto Tax Exemptions, Imposes 17.5% Flat Capital Gains Rate
Addressing Multiple Crypto Activities
The bill would also remove double taxation on mining and staking activities by deferring tax obligations until the associated assets are sold, rather than taxing them at the time of receipt. When eventually taxed, the rewards would be treated as ordinary income.
Other reforms include giving crypto lenders and borrowers the same tax treatment as participants in traditional securities lending, and clarifying that these activities are generally not taxable events. Charitable donations made in digital assets would also be exempt from taxation, removing a barrier that previously deterred such giving despite the assets’ clear market value.
Lummis, who leads the Senate’s digital assets subcommittee, has invited public feedback to accelerate the bill’s passage through Congress and onto President Trump’s desk.
Related: Democrats Introduce COIN Bill to Curb Trump’s Crypto Racket
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