New Cryptocurrency Tax Regulation Announced by Senator Lummis

On Thursday, Senator Cynthia Lummis from Wyoming introduced a law aimed at updating tax regulations for cryptocurrency. This move comes as Congress works toward establishing a clear regulatory framework for digital assets.

“To remain competitive, we need to adapt tax laws to support the digital economy instead of penalizing users of digital assets,” Lummis stated.

The proposed tax measures outline basic rules for handling digital assets. They include exemptions for small transactions under $300 and for taxes on crypto loans. Additionally, taxes on income derived from staking would be deferred until the tokens are sold.

The legislation also applies typical 30-day wash sale rules to cryptocurrencies, allowing investors to sell their tokens at a loss and still claim the loss for tax purposes. It aims to close loopholes that permit immediate repurchases while claiming deductions.

Similar to securities, cryptocurrency holdings would be subject to “marking to market” rules. This means they would be treated as if sold at the end of the year at market price, permitting individuals to claim losses for tax deductions.

Lummis noted that the Congressional Taxation Committee anticipates this law could generate around $600 million by 2034.

“This forward-thinking law is fully funded, reduces bureaucratic deficits, and sets practical rules that reflect the realities of digital technology,” she said.

“I won’t let outdated tax policies stifle American innovation. This law enables Americans to engage in the digital economy without the risk of tax violations,” Lummis added.

Earlier in the week, some Wyoming Republicans expressed a desire to incorporate crypto tax provisions into President Trump’s extensive tax and spending proposals. However, the law did not progress in the Senate and was ultimately set aside on Tuesday.

Even though it’s not included in the settlement bill, the crypto tax package is being introduced as Congress leans toward the Digital Assets Act. The Senate passed this bill last month, establishing a framework for stablecoins.

Meanwhile, the House panel is advancing both stablecoin regulations and measures that distribute oversight of the broader cryptocurrency market between two financial regulators. The lower chamber is expected to address the crypto bill later this month.