Senator Cynthia Lummis recently announced her plans to introduce an amendment to the “One Big Beautiful Bill” (OBBB) that would address crypto tax language. This decision comes after ongoing advocacy efforts from crypto supporters pushing for fair tax treatment for digital assets.
In a social media post, Lummis expressed her intention to draft an OBBB amendment that would protect Americans from facing tax violations when using digital assets. She highlighted the current issue faced by miners and stakers who are taxed twice – once when they receive block rewards and again when they sell them. Lummis emphasized the need to end this unfair tax treatment and position America as a leading Bitcoin and Crypto Superpower.
The proposed amendment aims to exempt small gains on everyday transactions, a move that has garnered bipartisan support in the past. Matthew Pine, the executive director of the Bitcoin Policy Institute, urged supporters to reach out to senators and request a narrowly tailored Bitcoin de minimis tax exemption. Pine highlighted the burdensome record-keeping requirements under current rules, which hinder fair compliance and everyday adoption of digital assets.
Dennis Porter, CEO of the Satoshi Action Fund, focused on the taxation of mining and proof-of-stake earnings. He pointed out that these rewards are currently taxed as ordinary income when created and again as capital gains when sold. Porter proposed a solution that would tax rewards only at disposition, aligning them with self-generated property like farm produce.
Colin McLaren from the Solana Policy Institute echoed the sentiment, urging Congress and the Senate Finance Committee to clarify digital asset tax issues around staking. He advocated for incorporating Lummis’s language to unlock future innovation in the crypto space.
Lobbying efforts have intensified, with Cody Carbone, CEO of the Digital Chamber lobbying group, amplifying the message that taxes on block and staking rewards should be applied at sale rather than creation. The Digital Chamber has joined forces with Bitcoin policy advocates, proof-of-stake supporters, and other crypto trade groups to push for legislative changes that treat these rewards as created property.
Supporters believe that the ongoing committee negotiations present a crucial opportunity to attach digital asset provisions to the bill before it reaches the Senate floor. They argue that implementing a de minimis exemption and fixing the timing of block rewards taxation would simplify individual reporting, reduce compliance costs, and promote validation activity in the US.
As Senate staff have yet to release the draft text and negotiators have not indicated the path forward for these issues, the crypto community remains hopeful for positive changes in the tax treatment of digital assets. The coordinated efforts from various stakeholders demonstrate a united front in advocating for fair and clear tax regulations in the crypto space.