The "Big and Beautiful" bill sparks controversy, will the crypto industry also get tax cuts?

Author: Bright, Foresight News

On July 1, the U.S. Senate secured enough votes (51 in favor, 49 against) in a procedural vote to advance the Trump administration's "One Big Beautiful Bill Act," a bill that previously caused a stir with Elon Musk, who had a falling out with Trump.

Musk directly tweeted, "If this crazy spending bill ('One Big Beautiful Bill') passes, a new political party will be formed in America the next day. Our country needs an alternative to the Democratic and Republican single-party system so that the people truly have a voice." Subsequently, Musk retweeted posts criticizing America's massive debt and commented on the rising debt during the tenures of both the Democratic and Republican parties, stating, "They are just pretending to be two parties, but in reality, they are one party."

In response, a previous online poll showed that over 80% of voters believe America needs a new political party.

In the early hours of July 1, Beijing time, the U.S. Senate secured enough votes (51 in favor, 49 against) in a procedural vote to advance Trump's tax reform bill, increasing the likelihood of the bill passing in the coming days. The bill, named the "One Big Beautiful Bill Act," abbreviated as OBBB, contains multiple provisions, spanning over 1,000 pages, primarily focusing on tax cuts and spending reductions.

The bill will extend the corporate and individual tax cuts that Trump enacted during his first term in 2017, provide new tax relief for tips, auto loans, and more, raise the eligibility threshold for social welfare for impoverished groups, significantly cut clean energy subsidies from Biden's Inflation Reduction Act (IRA), while increasing defense spending and providing more funding to combat illegal immigration.

Can the "One Big Beautiful Bill" Make Crypto "One Big Beautiful"?

Aside from the debt ceiling disputes, Republican Senator Cynthia Lummis from Wyoming is trying to quietly incorporate a significant cryptocurrency tax measure into Trump's massive budget bill, aimed at reducing the tax burden arising from basic cryptocurrency activities. On Monday, Lummis proposed adding relevant provisions to the "One Big Beautiful Bill," including a tax exemption for small cryptocurrency transactions (under $300).

Industry insiders believe this will streamline the current practice of taxing core cryptocurrency activities—staking and digital asset mining—at both the beginning and end of the activities.

The proposal also suggests setting an annual cap on small transaction totals at $5,000, significantly easing the capital gains tax burden for those who only engage in a small number of digital asset transactions. Currently, the amendment pushed by Cynthia Lummis has not yet been voted on and also involves tax issues related to cryptocurrency lending, wash trading, and charitable donations.

Industry experts believe that this amendment will alleviate many potential users' concerns about trying cryptocurrencies. In fact, just yesterday, the U.S. Supreme Court rejected Coinbase user James Harper's appeal against the IRS, declining to hear his request to "protect user cryptocurrency transaction data from mandatory disclosure."

However, if the amendment passes, small transactions by investors will be exempt from some cumbersome tax reporting procedures, and daily transactions that do not involve large token purchases or sales will not need to be disclosed.

Additionally, Democratic Senator Jeff Merkley from Oregon proposed an amendment to the "One Big Beautiful Bill" that would prohibit elected officials from promoting or profiting from cryptocurrency tokens in which they have a financial interest. In response, Cynthia Lummis firmly opposed this amendment, stating that it would severely undermine America's innovation and competitiveness and hinder the government's ability to effectively understand and regulate digital assets. It is evident that cryptocurrency has now become a fundamental base of economic support for the Republican Party.

Overall, the "One Big Beautiful Bill" is viewed by the market as the first step in the Trump administration's "money printing" efforts, and Trump has once again urged Powell to lower interest rates. In this regard, Goldman Sachs has moved its expectations for a Fed rate cut from December of this year to September. Perhaps, a significant monetary easing is on the horizon?