Senator Cynthia Lummis introduced legislation that would eliminate the bureaucratic nightmare of tracking every small crypto transaction. Her bill sets a $300 threshold for tax-free crypto purchases, with an annual cap of $5,000. No more treating a $10 coffee purchase like a complex capital gains event. The measure also tackles double taxation on staking rewards and includes provisions for charitable crypto donations. Industry leaders are calling it a much-needed step toward sanity in digital asset regulation, though plenty of details remain.
While President Trump’s budget bill left crypto enthusiasts hanging, Senator Cynthia Lummis isn’t backing down. The Wyoming Republican is pushing forward with her own standalone legislation that could finally put an end to the paperwork nightmare plaguing everyday crypto users.
Her plan is invigoratingly simple. Set a $300 threshold for crypto transactions that don’t require capital gains tracking. No more calculating taxes on that $50 Bitcoin purchase for coffee. The catch? There’s an annual cap of $5,000 in tax-free transactions. Still beats the current system where buying a sandwich with crypto technically triggers a taxable event.
Finally, a sensible fix: skip the tax paperwork on your daily crypto coffee runs under $300.
Lummis leads the crypto subcommittee within the Senate Banking Committee, so she knows the environment. Her bill tackles more than just small transactions. It eliminates the absurd double taxation on staking and mining rewards by only taxing gains when you actually sell. Because apparently, the IRS thought getting rewarded for securing a blockchain should be taxed twice.
The legislation also expands securities lending rules to digital assets and allows mark-to-market accounting for dealers. There’s even provisions for charitable giving with crypto, addressing tax headaches that have plagued donors trying to do good with their digital assets. The new rules align with the SEC’s stablecoin framework for compliant digital assets.
Industry leaders are calling this a positive step, even after the initial budget bill disappointment. The plan reflects growing recognition that policies need to catch up with the digital economy. Without updates, the U.S. risks falling behind in the global crypto race.
The senator is keeping things democratic by opening the bill to public comments. Smart move, considering how badly previous crypto regulations have missed the mark when crafted without stakeholder input. The bill specifically seeks to amend the Internal Revenue Code of 1986 to create a more comprehensive digital asset framework.
This isn’t just about reducing paperwork burden. It’s about encouraging adoption and creating a coherent regulatory framework that doesn’t punish people for using digital assets as intended. The current system treats every crypto transaction like a stock trade, which is ridiculous when someone just wants to buy lunch. However, the bill faces uncertainty in gaining Senate time for consideration amid competing priorities.
Whether this standalone bill gains traction remains to be seen. But at least someone in Washington gets it.
