Bitcoin Magazine

Senator Lummis Introduces Digital Asset Tax Legislation Today, U.S. Senator Cynthia Lummis (R-WY) has introduced a comprehensive digital asset tax legislation that could significantly boost the use of Bitcoin and other cryptocurrencies by cutting the bureaucratic red tape, modernising outdated tax rules, and supporting Bitcoin and crypto innovation. JUST IN: Senator Lummis introduced legislation to ease taxation on #Bitcoin and crypto. pic.twitter.com/zC21PCSha1— Bitcoin Magazine (@BitcoinMagazine) July 3, 2025 “In order to maintain our competitive edge, we must change our tax code to embrace our digital economy, not burden digital asset users,” said Lummis. “This groundbreaking legislation is fully paid-for, cuts through the bureaucratic red tape and establishes common-sense rules that reflect how digital technologies function in the real world. We cannot allow our archaic tax policies to stifle American innovation, and my legislation ensures Americans can participate in the digital economy without inadvertent tax violations.” The proposal introduces a de minimis exemption that would exclude small digital asset gains or losses from taxation, with a limit of $300 per transaction and $5,000 annually, and an inflation adjustment beginning in 2026.  The bill ensures Bitcoin and other crypto lending is not taxed as a sale, aligning it with traditional securities lending and improving capital efficiency. It also applies the 30-day wash sale rule to digital assets, closing a loophole and promoting tax fairness across asset classes. The bill allows digital asset dealers and traders to elect mark-to-market tax treatment, aligning Bitcoin and other crypto with existing rules for securities and commodities. This allows a more accurate income recognition based on fair market value, eliminating arbitrary discrimination based on asset type. It also defers taxation on mining and staking until the assets are sold, reducing the burden of being taxed on unrealized income. In addition, the bill removes appraisal requirements for charitable donations of actively traded digital assets, making it easier to contribute to Bitcoin and crypto nonprofits and treating it like publicly traded stock. “The legislation is estimated by the Congressional Joint Committee on Taxation to generate approximately $600 million in net revenue during the 2025-2034 budget window,” stated the press release. Senator Lummis emphasized the importance of public input 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 seek to get this package to the President’s desk,” she said. This post Senator Lummis Introduces Digital Asset Tax Legislation first appeared on Bitcoin Magazine and is written by Oscar Zarraga Perez.

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Senator Lummis’ New Bill Enables Tax-Exempt Bitcoin Spending — But Thresholds Are Too Low Today, Senator Lummis unveiled a bill that would enable U.S. citizens to spend up to $300 worth of bitcoin on goods and services, with a yearly cap of $5,000, without having to pay capital gains taxes on the transactions. The proposed legislation also stipulates that the threshold for spending will be adjusted for inflation starting in 2026. Such provisions were initially conceptualized as an amendment that Senator Lummis pushed to have included in the One Big Beautiful Bill (OBBB), but wasn’t. In the wake of Senate Finance Committee Chairman Mike Crapo not putting Senator Lummis’ amendment up for a vote in the marathon amendment session for the OBBB that occurred earlier this week, Senator Lummis said she would continue to work on legislation regarding tax reform around bitcoin spending. The bill she released this morning was evidence of her remaining true to her word — which should be acknowledged and appreciated. However, the details around the de minimis exemptions regarding bitcoin spending were met with some justifiable critique. Trey Walsh, founder of The Progressive Bitcoiner and contributor to Bitcoin Magazine, stated on X that the “thresholds are SO low” and that “there should be NO CAP for goods and services.” “Make it about spending/payments. This is good for consumers,” Walsh added. “You’re not taxed on your money (dollars) for spending. You shouldn’t be taxed on your money (bitcoin) for spending either.” Zach Herbert, founder of Foundation Devices, expressed his discontent with the bill in fewer words: this is so weak— Zach Herbert (@zachherbert) July 3, 2025 And Nick Anthony, Policy Analyst at the CATO Institute’s Center for Monetary and Financial Alternatives, proposed an alternative to spending thresholds for purchases: While I'm happy to see the threshold will be adjusted for inflation, the $300 transaction cap and $5,000 annual spending cap are disapointing.

It would be better to drop both caps while maintaining that qualifying purchases are those for goods and services. https://t.co/MO6J7ZNwna— Nick Anthony (@EconWithNick) July 3, 2025 Personally, I can live with certain spending caps, but I feel they should be substantially larger. I’d like to see the de minimis exemption applied to transactions valued at up to $600 (the original level Lummis proposed for the amendment to the OBBB) and for the yearly threshold to be closer to $25,000. Now, certain John Lennon lyrics may come to mind as I put the notion of spending up to $25,000 worth of bitcoin per year without being taxed on it out there into the universe: “You may say I’m a dreamer…” But that line warrants finishing when considering that a number of other prominent voices in the Bitcoin space have also spoken up to ask that the provisions in the bill regarding bitcoin spending be more substantial: “…but I’m not the only one.” So, if you agree with where we’re coming from, perhaps some of you will join us in politely raising your voices to request that Senator Lummis consider increasing the spending thresholds in the bill — while also expressing your gratitude for Senator Lummis’ dedication to crafting and advancing legislation that treats bitcoin as a medium of exchange. This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine. This post Senator Lummis’ New Bill Enables Tax-Exempt Bitcoin Spending — But Thresholds Are Too Low first appeared on Bitcoin Magazine and is written by Frank Corva.