Senator Cynthia Lummis said that US legislators are actively investigating how Bitcoin can be used for daily payments without automatically being subject to capital gains tax, and considers this issue as a key obstacle to considering the asset as a real means of exchange.
On March 5 on CNBC’s Squawk Box, the Wyoming Republican said that debate is ongoing in both the House and Senate on a possible de minimis exemption, and that the number currently stands at “about $300.”
Congress Eyes Bitcoin Tax Payments
Lummis described the rate as just one part of a broader tax problem. The bigger question, he suggested, is not just where to set the small transaction exemption, but how Congress should distinguish between holding Bitcoin as an investment asset and using Bitcoin as money.
“It’s called a de minimis exemption. And the number being considered by the House Ways and Means and Senate Finance is about $300 as a de minimis exemption,” Lummis said, adding:
“But the challenge is trying to figure out how you can use Bitcoin as a medium of exchange without paying capital gains tax on it. So we’re trying to weigh the appropriate way to determine when selling, for example, Bitcoin should be a capital gain and when it should be allowed to be used as a simple medium of exchange. Just like we use the US dollar.”
This distinction is important. Under the current framework, appreciating Bitcoin spending can create a taxable event, even when the transaction is economically similar to a simple purchase in dollars. For crypto advocates, this has long been one of the main reasons for Bitcoin to run as clean as a US railroad, despite its growing acceptance as a store of value and institutional asset.
The exchange on CNBC made it clear that Lummis sees the issue less as a crypto tax tweet and more as a structural inconsistency in the treatment of digital assets. When host Joe Kernen joked that by the same logic, consumers should be able to claim capital losses as the dollar loses permanent purchasing power, Lummis agreed and drew on the comparison.
“This is true because by design the US dollar loses 2% or more of its value every year,” he said. “So you’re right. If we did the same thing with the US dollar, all taxpayers would lose their capital every year.”
However, Lummis did not specify a final path for the legislation, and he did not claim that a consensus had been reached.
At press time, Bitcoin was at $70,786.
Featured image created with DALL.E, chart from TradingView.com
Editing process because bitcoinist is committed to delivering thoroughly researched, accurate and unbiased content. We adhere to strict sourcing standards and every page is rigorously reviewed by a team of top technology experts and experienced editors. This process ensures the integrity, relevance and value of our content to our readers.
