Sen. Cynthia Lummis said she is drafting legislation to exempt small bitcoin transactions from capital gains taxes, responding to a suggestion from tech entrepreneur Jack Dorsey.
Lawmaker’s Proposal Aims to Make Small Bitcoin Buys Tax-Free in US
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Sen. Lummis Works on De Minimis Rule for Bitcoin Transactions
The Wyoming Republican, Sen. Cynthia Lummis, a vocal cryptocurrency advocate, announced the effort on Oct. 9, 2025, aiming to introduce a de minimis exemption for transactions under a certain value.
This would eliminate reporting and taxation on minor bitcoin uses, such as buying coffee, which currently trigger capital gains based on asset appreciation.
Lummis has reportedly tied the proposal to broader goals of fostering U.S. innovation in digital assets. The plan builds on her earlier work, including a June 30, 2025, amendment to a budget reconciliation bill proposing a $300 per-transaction exemption with no initial annual cap. That measure failed during a Senate vote-a-rama.
On July 3, 2025, she released a standalone draft bill specifying a $300 threshold for gains or losses, capped at $5,000 annually per taxpayer, with inflation adjustments starting in 2026. Additional provisions include tax deferral on mining and staking rewards until sale, alignment of crypto lending with securities taxation, 30-day wash sale rules, and simplified charitable donations under $5,000.
The Joint Committee on Taxation projected the package would yield about $600 million in revenue over 2025-2034 through improved compliance. Key milestones include Lummis floating a $600 exemption idea on May 27, 2025, and urging public support in August and September media appearances. On Oct. 7, 2025, she linked it to funding the Strategic Bitcoin Reserve.
Crypto groups praised the move for boosting adoption, while critics called the thresholds too low and raised enforcement concerns. As of Oct. 9, 2025, the bill remains in draft, with Lummis seeking feedback and no vote scheduled, though it aligns with pro- bitcoin policy shifts.
FAQ 🪙
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What is Sen. Lummis’s new Bitcoin proposal?
It’s a draft bill to make small bitcoin purchases exempt from capital gains tax in the U.S. -
How would the de minimis rule work?
The plan sets a $300 threshold per transaction, capped at $5,000 annually, to simplify everyday BTC use. -
Why does this bill matter for crypto users?
It aims to remove tax friction for small payments, encouraging mainstream bitcoin adoption. -
When could the law take effect?
The proposal is reportedly still in draft form, with adjustments and inflation indexing expected starting in 2026.
