A new crypto-friendly tax bill introduced in the U.S. Senate is gaining attention for its potential to simplify how Americans use digital currencies for everyday transactions. Spearheaded by Senator Cynthia Lummis, the legislation aims to remove key tax hurdles that currently discourage casual crypto usage.
Small Crypto Transactions May Become Tax-Free
Under the proposed bill, Americans would be exempt from reporting capital gains on cryptocurrency transactions under $300, with a maximum annual exemption cap of $5,000. This change is intended to make it easier for people to use crypto for small purchases like coffee, groceries, or digital services—without getting tangled in tax complications.
Currently, even a small gain on a $10 crypto payment can trigger tax reporting requirements. The new rule would treat these minor transactions more like cash, reducing friction and encouraging wider use of digital assets in everyday life.
New Rules for Crypto Rewards, Staking, and Accounting
The legislation doesn’t stop at simplifying payments. It also addresses double taxation on crypto rewards from staking, mining, airdrops, and blockchain forks. Under the proposal, these rewards would only be taxed when they’re sold—not when they’re received.
Other highlights of the bill include:
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Clarifying tax treatment for crypto lending and charitable donations.
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Ending “wash sale” rules for digital assets, a practice where traders sell and quickly repurchase assets to claim tax losses.
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Allowing traders and dealers to mark crypto assets to market value for accounting purposes.
These changes aim to modernize the tax code to reflect how digital assets function in today’s economy.
Senator Lummis emphasized that this bill is necessary to help Americans participate in the digital economy without fearing accidental tax violations. While the legislation faces significant hurdles in the Senate—especially with competing crypto bills and proposals like the creation of a federal bitcoin reserve—its introduction signals growing political momentum for crypto innovation in the U.S.
If passed, this bill could mark a major step forward for making digital currency more practical and accessible for the average consumer.
