US Senator Cynthia Lummis has introduced a draft bill aimed at reforming the taxation of digital assets in the United States. The proposed legislation seeks to eliminate double taxation and clarify tax regulations concerning crypto transactions such as staking, mining, and lending. Key provisions include a de minimis exemption for digital asset transactions with capital gains of up to $300 and a maximum annual exemption cap of $5,000. Additionally, the bill suggests deferring taxes on mining until the underlying assets are sold, and exempting crypto lending agreements from taxation. Lummis emphasizes that the legislation is structured to support innovation in the digital economy, helping Americans engage in this space without the fear of unintended tax violations. The bill comes in response to the lack of clarity and inefficiency regarding the tax treatment of cryptocurrency, particularly concerning decentralized finance (DeFi) protocols. Lummis' draft represents a crucial opportunity to address the concerns of the crypto community as wider legislative discussions unfold.

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