US Senator Cynthia Lummis drafts standalone crypto tax bill

US Senator Cynthia Lummis submitted a draft bill on Thursday, outlining several provisions to overhaul the tax code and exempt certain digital asset transactions from taxation after crypto amendments failed to appear in the budget package.

The bill proposes a de minimis exemption for digital asset transactions and capital gains of $300 or less, with a $5,000 annual exemption cap.

The Wyoming Senator also outlined provisions to exempt crypto lending agreements and digital assets used in charitable contributions from taxation. Additionally, the bill proposed deferring taxes on mining and staking rewards until the underlying assets are sold. Lummis said:

“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.

My legislation ensures Americans can participate in the digital economy without inadvertent tax violations,” she continued.

The standalone draft bill is now the Wyoming Senator's best chance of passing the pro-crypto legislation promised to the crypto community after Senators passed the spending bill without addressing digital assets.

Double taxation, unclear policies frustrate US crypto investors

Digital asset taxation has become a hot-button issue in the crypto industry, with executives, investors, traders, and users frustrated by the lack of clarity and tax efficiency in the United States.

One major topic of contention is the tax treatment of completely decentralized finance (DeFi) protocols and non-custodial platforms where the developers do not have control over funds or consensus rules.

In June, US lawmakers on the House Financial Services Committee introduced an amendment to the Digital Asset Market Clarity Act of 2025, the crypto market structure bill, exempting developers of decentralized protocols from being classified as money-transmitting services.

This would also exempt these DeFi protocols from the same tax reporting requirements as centralized exchanges and other crypto businesses employing a traditional business structure.

US lawmakers are scrambling to include crypto provisions in the final version of the spending bill before it hits US President Donald Trump's desk.