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Today, U.S. Senator Cynthia Lummis (R-WY) has launched a comprehensive digital asset tax law legislation that can greatly improve the use of Bitcoin and other cryptocurrencies by cutting bureaucratic traditional tape festivals, modernizing outdated tax rules, and supporting Bitcoin and crypto innovations.
“To maintain a competitive advantage, we have to change tax laws to embrace our digital economy, rather than burden digital asset users,” Loomis said. “This groundbreaking legislation is fully paid, cuts bureaucratic traditional tape and creates common rules that reflect how digital technology works in the real world. We cannot allow our ancient tax policies to stifle American innovation, and my legislation ensures that Americans can participate in the digital economy without infringing on tax violations.”
The proposal introduces a minimum exemption that would exclude small amounts of digital assets gains or losses from taxes, with a limit of $300 per transaction, $5,000 per year, and inflation adjustments starting in 2026.
The bill ensures that bitcoin and other crypto loans are not taxed, align them with traditional securities loans and improve capital efficiency. It also applies 30-day WASH sales rules to digital assets, closing vulnerabilities and promoting tax justice in asset classes.
The bill allows digital asset dealers and traders to choose trademark-to-market tax treatment, aligning bitcoin and other cryptocurrencies with existing securities and commodity rules. This allows for more accurate revenue recognition based on fair market value, eliminating arbitrary discrimination based on asset type.
It also violates taxes for mining and sales until the assets are sold, thus reducing the burden of taxes on unrealized income. Additionally, the bill removes the assessment requirements for charitable contributions to actively traded digital assets, making it easier to contribute to Bitcoin and crypto nonprofits and treat it like publicly traded stocks.
“The legislation was estimated by the Congress Joint Tax Committee, with net income of approximately $600 million during the 2025-2034 budget window,” the release said.
Senator Lummis stressed the importance of public opinion in shaping a fair and forward-looking approach to bitcoin and the broader digital asset economy. “I welcome public comments on this legislation as we try to deliver this package to the president’s desk,” she said.