Senator Lummis Pushes Crypto Tax Relief in U.S. Budget Bill

U.S. Senator Cynthia Lummis is advocating for a major crypto tax reform by introducing a pro-crypto amendment into the sweeping federal budget bill aligned with President Donald Trump's agenda. The proposal aims to ease tax burdens for everyday crypto users and participants in the blockchain economy.

Lummis’ amendment seeks to exempt small crypto transactions under $300 from capital gains taxes, with an annual cap of $5,000. This change could remove significant barriers for individuals engaging in routine digital asset use, making crypto adoption easier and more practical.

More critically, the amendment would overhaul the current tax treatment of staking, mining, airdrops, and forks. Presently, these rewards are taxed twice—first upon acquisition and again at the point of sale. The new provision would align taxation with realized income by taxing these digital asset rewards only when they are sold.

Crypto advocates, including the Digital Chamber, argue the current approach penalizes fundamental blockchain activities and discourages participation. They’ve urged the community to lobby Congress in support of the amendment, which they believe corrects a long-standing tax policy flaw.

Additionally, the proposal addresses crypto lending, charitable donations, and aims to close the controversial wash-trading loophole that allows investors to sell at a loss and quickly buy back to lower taxable gains.

The amendment is part of a complex Senate “vote-a-rama” process involving numerous legislative changes. While the budget bill faces strong opposition from Democrats due to concerns over spending cuts, the crypto tax provision could gain bipartisan support as a practical step toward fair digital asset regulation.

If adopted, Lummis’ amendment could significantly reshape the U.S. crypto tax landscape and provide long-sought clarity for investors and blockchain participants alike.