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The U.S. Senate’s recent passage of President Trump’s massive reconciliation bill marked a pivotal moment, yet crucial crypto tax amendments aimed at benefiting miners, stakers, and retail users were ultimately excluded.
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Despite intense last-minute efforts led by Senator Cynthia Lummis and crypto industry advocates, the proposed tax provisions did not make it into the final legislation, highlighting ongoing challenges in crypto policy integration.
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According to a COINOTAG source, “We just ran out of time,” reflecting the missed opportunity to address double taxation and other key issues within the bill’s tight legislative window.
Senate passes major reconciliation bill without key crypto tax benefits, leaving miners and retail users facing double taxation and regulatory uncertainty.
Senate Passes Reconciliation Bill Amidst Crypto Tax Amendment Setbacks
The U.S. Senate’s approval of the “One Big, Beautiful Bill” represents a significant legislative achievement, yet the absence of crypto-specific tax amendments underscores persistent hurdles for digital asset stakeholders. Senator Cynthia Lummis (R-WY), a prominent advocate for crypto-friendly policies, spearheaded efforts to introduce provisions that would have alleviated the burdensome double taxation on mining and staking rewards. These rewards are currently taxed both at the moment of receipt and again upon sale, a practice widely criticized for stifling industry growth and innovation.
In the final hours before the bill’s passage, Lummis and allied senators pushed to include amendments that would clarify tax treatment, introduce mark-to-market accounting for crypto holdings, and establish a de minimis exemption for small crypto transactions. However, the timing of these proposals—only finalized over the weekend preceding the vote—left insufficient opportunity for comprehensive debate and inclusion. Vice President J.D. Vance’s tie-breaking vote ultimately secured the bill’s passage without the crypto provisions, signaling a missed chance to modernize tax policy in line with evolving digital asset markets.
Key Crypto Tax Provisions and Their Industry Impact
The proposed amendments aimed to address several critical issues affecting the crypto ecosystem. First, the clarification that staking and mining rewards should be taxed only upon sale would have eliminated the punitive double taxation currently faced by miners and stakers. This change is expected to incentivize greater participation in blockchain validation processes, fostering network security and decentralization.
Second, the mark-to-market accounting provision would have granted companies the ability to report unrealized gains on crypto assets, enhancing financial transparency and balance sheet strength. This flexibility is particularly important for businesses holding significant digital asset reserves, as it aligns accounting practices with traditional financial instruments.
Lastly, the de minimis exemption for crypto transactions under a specified threshold would have simplified tax reporting for retail users, encouraging everyday use of cryptocurrencies for payments and reducing administrative burdens. This measure is seen as a crucial step toward mainstream adoption by lowering barriers for casual users and small-scale traders.
Outlook for Future Crypto Tax Legislation
While the current legislative cycle concluded without the inclusion of crypto tax reforms, Senator Lummis remains optimistic about future progress. A spokesperson highlighted ongoing productive discussions with Senate Finance Committee Chair Mike Crapo (R-ID) and other key members, indicating that these issues remain a priority for upcoming sessions. The bipartisan interest in refining crypto tax policy suggests that stakeholders should remain engaged and proactive in advocacy efforts.
Industry leaders and policy experts emphasize the importance of continued dialogue and public engagement to ensure that future bills address the complexities of digital asset taxation effectively. The recent push to mobilize constituents to contact their senators demonstrates the growing political influence of the crypto community and its capacity to shape regulatory outcomes.
Conclusion
The Senate’s passage of the reconciliation bill without key crypto tax amendments represents a significant but incomplete step in integrating digital assets into federal tax policy. The exclusion of provisions to end double taxation, implement mark-to-market accounting, and establish a de minimis exemption highlights ongoing challenges in aligning legislation with the unique characteristics of cryptocurrencies. However, the sustained efforts by Senator Lummis and industry advocates signal a continued commitment to addressing these issues in future legislative sessions. Stakeholders are encouraged to stay informed and engaged as the dialogue around crypto taxation evolves, ensuring that the United States remains competitive in the global digital economy.
