U.S. Senate Panel Sets October 1 Showdown on Crypto Tax Policy - Here’s What’s at Stake

Washington finally wakes up to the crypto revolution—just as tax season looms.

The Regulatory Chessboard

Senate lawmakers are scrambling to decode digital assets before the IRS starts sending out those scary letters. October 1 marks D-Day for crypto taxation clarity, with policymakers facing a simple choice: embrace innovation or strangle it with legacy frameworks.

Why This Hearing Matters

Traditional finance bureaucrats meet blockchain reality—expect sparks. The hearing could define whether America leads the digital asset revolution or becomes another compliance-obsessed backwater. Current tax treatment makes crypto transactions more complicated than filing corporate returns for a Fortune 500 company.

The Bottom Line

Watch for signals about simplified reporting, DeFi treatment, and whether senators actually understand the technology they're trying to regulate. Because nothing says 'financial innovation' like making crypto traders nostalgic for the simplicity of 1040 forms.

Trump administration backs small crypto tax relief

Cryptopolitan reported back in July that White House Press Secretary Karoline Leavitt had said that the TRUMP administration still wants to push through the de minimis exemption in upcoming laws.

“The president did signal his support for de minimis exemption for crypto and the administration continues to be in support of that,” Karoline said. She explained that right now, using crypto for basic purchases is too complicated because of tax rules, but a change could make everyday payments smoother.

“We are definitely receptive to it to make crypto payments easier and more efficient for those who seek to use crypto as simple as buying a cup of coffee — of course, right now, that cannot happen, but with the de minimis exemption perhaps it could in the future.”

Karoline also revealed that President Trump plans to host a signing ceremony for the GENIUS Act, a stablecoin-focused bill expected to pass soon. That bill is part of his administration’s broader goal to make the U.S. “the crypto capital of the world.”

The Senate has already tried and failed to deal with this issue before. In 2020, two Democratic lawmakers proposed the VIRTUAL Currency Tax Fairness Act, which aimed to ignore tax on crypto gains below $200. It didn’t even make it to a vote. A similar version in 2022 also died on the floor.

Then came a broader bill in 2025 called the One Big Beautiful Bill Act, which covered everything from taxes to border control. Senator Cynthia Lummis, a Republican from Wyoming, tried to get a crypto exemption added in for gains under $300, but that proposal got scrapped before the final bill passed.

President Trump signed it into law on July 4 without the crypto language attached.

Right now, the IRS says every single crypto transaction must be reported, even if there’s no gain or the amount is tiny. If you spend $5 of bitcoin, that’s a taxable event. The idea behind the de minimis exemption is to cut through that nonsense and give users room to breathe. But it hasn’t been easy.

Lawmakers face real obstacles. First, the federal government depends on tax income. If it suddenly lets millions of small crypto transactions go untaxed, that means less money coming in. And there’s no sign yet of how they’ll offset that shortfall.

Even with strong voices like Cynthia and Jason in the room, the Senate still hasn’t landed on a solution. October 1 might give them a chance to do something useful. Or it might be another meeting where everyone talks and nothing happens.

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