Crypto Tax Reform Urged as US Risks Falling Behind Global Rivals
U.S. Senator Cynthia Lummis has renewed calls for tax reform in the cryptocurrency sector, urging lawmakers to eliminate what she calls an unfair double taxation policy imposed on crypto miners and stakers.
Currently, individuals who secure blockchain networks by mining or staking digital assets face two layers of taxation: they are taxed first when they receive crypto rewards—treated as income—and again when they sell those assets, incurring capital gains tax. This contrasts with the treatment of regular crypto investors, who are taxed only upon realising profits.
In a recent post on X, Lummis wrote, “It’s time to stop this unfair tax treatment and ensure America is the world’s Bitcoin and Crypto Superpower.” She was joined by Michael Saylor, Executive Chairman of MicroStrategy, who echoed the sentiment: “We must end unfair taxes on Bitcoin miners if the U.S. wants to lead.”
Both argue that such tax practices discourage participation in the essential activities that support blockchain security and decentralisation. They warn that without friendlier regulations, the U.S. risks losing talent and businesses to more crypto-friendly nations.
Several countries already offer more attractive tax regimes for crypto operations. El Salvador exempts Bitcoin miners from taxation entirely and recognises Bitcoin as legal tender. The UAE imposes no income tax on mining and provides additional benefits in free economic zones like Dubai and Abu Dhabi.
Other jurisdictions—such as Georgia, Portugal, Germany, and Switzerland—also have crypto-advantageous tax policies, ranging from no capital gains tax to exemptions based on holding periods or income thresholds. Zug, Switzerland’s “Crypto Valley,” remains a leading hub due to its supportive regulatory environment.
With global rivals luring crypto innovators and miners through favourable laws, Lummis and Saylor warn that the U.S. could fall behind in the race to lead the blockchain economy. They urge Congress to modernise tax policy and ensure the country remains at the forefront of crypto innovation.
