U.S. Lawmakers Gear Up to Review Crypto Tax Rules in ‘Crypto Week’

Just days before the House scheduled its crypto tax hearing, Senator Cynthia Lummis had introduced a new bill in the Senate targeting persistent frustrations within the digital asset community. Lummis’ legislative effort followed the omission of her crypto tax provisions from the recent federal budget package. Despite significant lobbying, President Trump’s “One Big Beautiful Bill” excluded all elements of the Lummis-Gillibrand crypto framework and made no mention of digital asset taxation or reporting requirements.

The upcoming hearing, titled "Making America the Crypto Capital of the World: Ensuring Digital Asset Policy Built for the 21st Century," aims to address the complexities of taxing digital assets. Led by Chairman Jason Smith and Oversight Subcommittee Chairman David Schweikert, the session will explore strategies to integrate cryptocurrencies into the existing tax system effectively. The focus will be on developing a framework that promotes innovation while ensuring compliance and revenue collection.

The hearing will consider the implementation of standardized reporting mechanisms for digital asset transactions. The Internal Revenue Service (IRS) has introduced Form 1099-DA, a new tax form specifically designed for digital assets, requiring brokers to report gross proceeds from sales. This move aims to increase transparency and streamline tax reporting for both taxpayers and the IRS.

The tax policy hearing is part of a broader legislative initiative dubbed "Crypto Week," during which the House will deliberate on several bills aimed at regulating various aspects of the cryptocurrency industry.

One of the key pieces of legislation is the CLARITY Act, which seeks to delineate regulatory responsibilities between the SEC and the Commodity Futures Trading Commission (CFTC) concerning digital assets. This measure aims to eliminate overlapping authority and provide legal certainty for developers and investors alike.

Another major proposal is the CBDC Anti-Surveillance State Act. This bill aims to prohibit the federal government from issuing a central bank digital currency (CBDC), citing concerns over financial surveillance and privacy. Supporters argue that such a measure is essential to protect the financial freedom of Americans in a rapidly digitizing economy.

In addition, the GENIUS Act is also on the agenda. This legislation focuses on establishing a regulatory framework for stablecoins, requiring issuers to register, maintain adequate reserves, and provide transparent disclosures to users. The goal is to ensure the safety and soundness of stablecoins as they become increasingly integrated into the broader financial system.

These legislative efforts align with President Donald Trump's platform, which emphasizes reversing the previous administration's stringent approach to crypto regulation and positioning the U.S. as a global leader in digital assets.

Senator Elizabeth Warren has also raised concerns about conflicts of interest, particularly regarding President Trump's personal business stakes in the cryptocurrency industry. She advocates for limits on crypto involvement for senior government officials to prevent potential corruption and ensure unbiased policymaking.

The outcomes of the July 16 hearing and the broader "Crypto Week" legislative activities could significantly influence the trajectory of cryptocurrency regulation in the United States. As lawmakers navigate the complexities of integrating digital assets into the financial system, the balance between promoting innovation and ensuring robust oversight remains a central challenge.