Cynthia Lummis sells the "Digital Asset Taxation Act": It can collect 600 million dollars in ten years, what are the benefits for encryption?

U.S. Republican Senator Cynthia Lummis officially introduced a comprehensive "Digital Asset Taxation Act" yesterday (the 3rd), claiming it aims to help the cryptocurrency industry achieve key victories and create a fair competitive environment for digital asset users across the U.S. (Background: Cryptocurrency tax moving towards "global reporting"! Switzerland approves sharing cryptocurrency income information among 74 countries) (Background information: Can car loans, tips, and overtime pay be tax-deductible really help low-income groups? Breaking down the truth about tax cuts in Trump's "Tax Cuts and Jobs Act") U.S. Republican Senator and Chair of the Senate Banking Committee's Digital Assets Subcommittee Cynthia Lummis officially introduced a comprehensive "Digital Asset Taxation Act" yesterday (the 3rd), claiming it aims to help the cryptocurrency industry achieve key victories and create a fair competitive environment for digital asset users across the U.S. Cynthia Lummis stated: To maintain our competitive edge, we must revise our tax laws to embrace the digital economy rather than adding burdens on digital asset users. This groundbreaking legislation is completely self-sufficient, reducing cumbersome bureaucratic processes and establishing common-sense rules that align with the actual functioning of digital technologies. We cannot allow outdated tax policies to stifle innovation in America; my bill will ensure that Americans can participate in the digital economy without unintentionally violating tax regulations. The announcement pointed out that this bill will not only address long-standing issues in digital asset taxation but is also expected to generate approximately $600 million in net revenue for the federal government within the fiscal window from 2025 to 2034. Specific contents of the bill: 1. Tax exemption for microtransactions: Establishes a minimum threshold for tax exemption for the sale or exchange of digital assets. This exemption does not apply if the transaction involves cash, cash equivalents (such as payments in stablecoins), or property used for actively conducting business, or property held to generate income. Specific limits include: single transaction value and total gains not exceeding $300, with an annual total limit of $5,000. This provision will reduce the tax compliance burden for ordinary users and promote the practicality of digital assets as a medium of daily transactions. 2. Tax exemption for digital asset lending: Digital asset lending agreements are generally not considered taxable events. This measure avoids the issue of triggering tax consequences from temporarily lending digital assets, encourages the development of a legitimate lending market, enhances capital efficiency, and aligns tax treatment with securities lending, eliminating artificial barriers in the digital asset market. 3. Wash sale rules applicable to digital assets: Includes digital assets in the category of "specific assets," subject to a 30-day wash sale rule, covering options, forward contracts, futures, and derivations. This measure ensures fairness in taxation between digital assets and traditional securities, avoiding distortions in market investment decisions. 4. Mark-to-market valuation option: Allows digital asset dealers and traders to choose mark-to-market tax treatment: Dealers: as mandatory for securities dealers. Traders: may choose applicability as securities traders. This provision gives digital asset traders the same tax treatment as securities and commodity traders, eliminating discrimination between asset types and ensuring income recognition aligns more closely with the economic realities of trading activities. 5. Delayed recognition of mining and staking income: Specifies that income from mining and staking is not recognized until the output asset is sold or disposed of, with recognition treated as ordinary income. This avoids tax reporting based on fluctuating and uncertain fair market values at the time of receipt, addresses cash flow issues faced by taxpayers due to unrealized assets, and promotes the long-term development of digital asset mining and staking. 6. Charitable donations exempt from assessment: Aims to eliminate bureaucratic barriers hindering digital asset donations. Lummis pointed out that actively traded digital assets typically have easily ascertainable fair market values and should enjoy similar treatment as publicly traded securities to promote charitable causes and simplify the donation process. Market response is positive. According to public posts on the social media platform X, several opinion leaders (KOLs) expressed support for the bill, believing it will bring significant favourable information to the crypto market. For example, some community members pointed out that the bill's microtransaction tax exemption, cancellation of double taxation on staking, and tax equalization with traditional financial assets will enhance the U.S.'s competitiveness in the global digital asset market. At the same time, some market analysts predict that if the bill passes smoothly, it will significantly reduce tax compliance costs for digital asset users and promote the everyday application of cryptocurrencies. However, some comments also caution that whether the bill can ultimately become law depends on the deliberation process in the Senate and House of Representatives and the consensus within the Republican Party regarding its fiscal impact. Related reports: Why is CZ concerned about Kyrgyzstan? Overview of the country's cryptocurrency tax and regulatory system. The dreamland for miners? Exploring Iceland's cryptocurrency tax and regulatory landscape. Overview of Asia's cryptocurrency tax policies, which countries are more friendly? "Cynthia Lummis proposes the Digital Asset Taxation Act: Will it collect $600 million in ten years? What are the benefits for crypto?" This article was first published in BlockTempo, the most influential blockchain news media.