Will Trump’s Spending Bill Ignite a Crypto Boom or Deepen US Debt Risks?

The Senate’s marathon session over President Trump’s “Big Beautiful Bill” has placed cryptocurrency at the heart of a fierce policy debate. Senator Cynthia Lummis’s proposed amendments would waive taxes on crypto transactions under $300, up to $5,000 per year, and delay taxation on mining, staking, and airdrops until assets are sold.

These measures are designed to end what Lummis calls “unfair tax treatment,” potentially encouraging broader adoption of digital assets and making everyday crypto use more practical for Americans. If adopted, these changes could lower barriers for retail investors and small businesses, stimulating activity across the US crypto sector.

Debt Expansion Remains a Central Concern

Despite the bill’s growth ambitions, its fiscal cost is drawing sharp warnings. The Congressional Budget Office estimates the legislation will add at least $3 trillion to the federal deficit over the next decade. Critics argue that generous tax cuts, including those for crypto, risk undermining fiscal stability.

Credit rating agencies and economists warn that the rising debt burden could weaken the dollar’s standing and increase borrowing costs, especially if global investors lose confidence in US Treasuries. While some banks and business groups support the bill’s stimulative effects, the scale of deficit expansion remains a flashpoint in the debate.

Did you know?
The “vote-a-rama” process currently underway is a rare Senate procedural marathon, allowing hundreds of amendments to be proposed and voted on in rapid succession, sometimes running through the night and reshaping major legislation in real time.

Will Crypto Incentives Spark a Digital Asset Boom

Proponents of the crypto amendments believe the bill could trigger a surge in US-based blockchain activity. By exempting small transactions and clarifying tax treatment for mining and staking, the legislation aims to foster a friendlier environment for innovation and investment.

Industry advocates argue that these reforms would help the US keep pace with global competitors, attract new projects, and reduce regulatory uncertainty. However, the ultimate impact will depend on how the IRS implements these changes and whether the reforms survive the Senate’s final negotiations.

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Political Divisions Expose Broader Policy Fault Lines

The crypto provisions of the bill have become a focal point for partisan conflict. While Republicans tout the amendments as pro-innovation, Democrats have pushed for stricter ethical rules, including a failed proposal to bar government officials and their families from promoting or owning digital assets.

The defeat of this amendment and the heated rhetoric from figures like Elon Musk, who threatened to form a new political party if the bill passes, underscore how digital assets have become deeply entwined with broader debates over transparency, influence, and economic policy.

Tax Relief for Households and Businesses Drives Broader Economic Strategy

Beyond crypto, the bill delivers sweeping tax cuts for working- and middle-class Americans, expands child tax credits, and boosts business expensing for capital investments. Supporters argue these measures will prevent a looming tax hike in 2026, stimulate household spending, and spur job creation.

Banks and analysts note that the immediate effect of the bill could be to avert a fiscal contraction and support economic growth, although this may lead to higher deficits in the long term.