Trump’s promises and new U.S. crypto tax bill reignite excitement in the crypto market

The cryptocurrency market, long challenged by bearish trends, finds renewed optimism with new legislative efforts. Former President Donald Trump's promise to ease regulations and foster innovation, should he win in November, has turned crypto into a significant political issue.

Virtual Currency Tax Fairness Act

A notable bill, the Virtual Currency Tax Fairness Act, has been reintroduced in the U.S. Senate. It aims to exempt small crypto transactions from capital gains tax, similar to current exemptions for foreign currency. This legislation seeks to simplify the tax implications for low-value crypto transactions.

Bipartisan Support

Jerry Brito, Executive Director of Coin Center, highlighted the bill's bipartisan backing. Sponsors include Sen. Ted Budd, Sen. Kyrsten Sinema, Sen. Cynthia Lummis, and Sen. Kirsten Gillibrand. This marks the first bipartisan and bicameral legislative initiative in cryptocurrency taxation, driven by Coin Center’s advocacy efforts.

Positive Reception

The crypto community has welcomed the bill, hopeful for increased investor interest and a more government-friendly stance towards cryptocurrencies. The potential for regulatory clarity and fairer tax treatment is seen as a significant boost for the industry.

Pro-Crypto Senators

Senators Lummis and Gillibrand have been vocal advocates for clear crypto regulations. Lummis has criticized the Department of Justice for its approach to non-custodial software wallets and urged Congress to establish a regulatory framework post-SEC approval of spot Ethereum ETFs. Together, they have also introduced several bills aimed at regulating stablecoins, emphasizing the need for comprehensive crypto regulations.

Political Implications

With the upcoming election, crypto investors are hopeful for a regulatory environment that favours innovation and growth. Should Trump win, the anticipation is for softer and more supportive crypto rules.