A new cryptocurrency tax reform bill introduced by U.S. Senator Cynthia Lummis is gaining traction for its ambitious attempt to modernize how digital assets like Bitcoin are taxed. The legislation offers targeted relief to everyday users, miners, stakers, lenders, and charitable donors, potentially marking a major shift in how the U.S. treats digital currencies.
At the heart of the proposal is a tax exemption for small crypto transactions. Under the bill, any purchase made with cryptocurrency under $300—such as buying coffee, groceries, or public transit—would no longer trigger a taxable event. This applies as long as an individual's total tax-free crypto gains do not exceed $5,000 annually. The threshold is also set to adjust for inflation beginning in 2026.
“People shouldn’t have to calculate capital gains every time they buy a sandwich,” said Senator Lummis, a longtime advocate for digital financial innovation. “This bill is about making crypto more usable as a real currency—not just a speculative asset.”
The bill also proposes deferred taxation for crypto mining and staking—a move industry leaders have long requested. Currently, miners and stakers are taxed as soon as they receive new tokens, even if they haven’t sold them. The new plan would change that, making tax liabilities apply only when the tokens are sold, helping to eliminate surprise tax bills based on volatile asset valuations.
In addition, crypto lending and donations would see more favorable tax treatment. Loans of digital assets would no longer be treated as taxable disposals, allowing users to lend crypto without triggering immediate capital gains. For charitable giving, donors contributing commonly traded cryptocurrencies—like Bitcoin or Ethereum—would no longer need costly third-party appraisals, easing the process and potentially boosting donations to nonprofits.
Lummis argues the bill will encourage crypto adoption while keeping innovation in the U.S. She estimates the legislation could generate $600 million in federal revenue over ten years, thanks in part to increased compliance and reporting clarity.
While the bill didn’t make it into former President Trump’s newly signed spending package, Lummis remains optimistic. “This is common-sense legislation,” she said. “And we want to hear from the public.”
The proposal is now open for public comment, with lawmakers encouraging stakeholders—including crypto users, industry leaders, tax experts, and consumer advocates—to weigh in.
With bipartisan interest in digital asset reform slowly building in Congress, supporters of the bill hope the momentum continues into the fall legislative session.
July 2025, Cryptoniteuae