Senator Lummis Calls for Reform in U.S. Crypto Tax Policy

According to ShibDaily, Wyoming Senator Cynthia Lummis has called for a revision of the current cryptocurrency tax policy, arguing that Bitcoin and other digital assets are being unfairly affected by existing tax regulations. In a post dated June 10, Senator Lummis emphasized the need for changes in crypto taxation, stating that the current rules are flawed and require reconciliation. Known as Congress's 'Crypto Queen,' Senator Lummis has been at the forefront of cryptocurrency policy development, notably through her introduction of the BITCOIN Act. This legislation aims to formalize U.S. President Donald Trump's executive order by creating a strategic Bitcoin reserve at the federal level. Senator Lummis presented her proposed crypto tax framework at the 2025 Bitcoin Conference, revealing that her office has already submitted a detailed plan to the Senate Finance Committee. In a letter dated May 12, Senator Lummis, along with Bernie Moreno, urged Treasury Secretary Scott Bessent to reconsider the current definition of 'adjusted financial statement income' under U.S. law. They highlighted the Treasury's authority to amend this interpretation to alleviate tax burdens on digital asset firms and encouraged Secretary Bessent to utilize this power. In the United States, the Internal Revenue Service (IRS) treats cryptocurrencies as property, meaning that any profitable crypto transaction is subject to capital gains tax. Short-term gains, from assets held for less than a year, are taxed at ordinary income rates ranging from 10% to 37%, depending on the taxpayer's bracket. Long-term gains, for assets held over a year, benefit from reduced rates of 0%, 15%, or 20%, providing some tax relief to long-term crypto investors. As discussions on crypto taxation continue, both lawmakers and industry experts stress the importance of establishing clearer, more balanced policies that reflect the evolving nature of digital assets. With the rapid advancement of blockchain technology and increasing adoption, tax frameworks must evolve to encourage innovation while ensuring fair compliance. The outcome of these discussions could significantly influence the future landscape of crypto investment and business operations in the U.S., making it essential for stakeholders to remain engaged in the legislative process. The response of policymakers will be crucial in determining whether the country can nurture a thriving digital economy that benefits all participants.