- Eric Trump proposes exempting U.S.-based cryptocurrencies from capital gains taxes, contrasting with a 30% tax for non-American projects.
- Senator Ted Cruz opposes new IRS rules for DeFi platforms, arguing they stifle innovation and jeopardize privacy.
Eric Trump, son of U.S. President Donald Trump, hints at a groundbreaking tax policy that could set the stage for America to dominate the crypto industry. The proposed initiative aims to exempt U.S.-based cryptocurrencies from capital gains taxes—a bold move contrasting sharply with a 30% tax suggested for non-American crypto projects.
BREAKING: Eric Trump has reportedly confirmed that some U.S.-based crypto projects will soon benefit from zero capital gains tax, while non-U.S.-based projects will face a 30% capital gains tax, per The Street: pic.twitter.com/4GcjKQm9z2
— unusual_whales (@unusual_whales) January 26, 2025
If implemented, the policy would influence prominent U.S.-backed digital assets such as XRP, Cardano (ADA), Algorand (ALGO), and Hedera Hashgraph (HBAR). The U.S. cryptocurrency sector holds vast economic potential, with a combined market value of $511 billion and daily trading volumes reaching 42 billion, according to CoinGecko.
Speaking at events like the Bitcoin MENA Conference, Eric Trump has positioned the tax exemption as a strategy to drive innovation and attract international collaboration. He asserts that such a policy would motivate foreign enterprises to relocate operations to the U.S. In contrast, critics highlight global inconsistencies in regulatory approaches, citing Italy’s 42% tax on Bitcoin gains as a stark example of divergence.
Tax Cuts Anticipates 100x Surge for U.S. Crypto
Eliminating taxes on U.S.-based digital assets could attract startups, established firms, and substantial investments. Experts predict this shift may fuel an economic boom by driving job creation, expanding technological infrastructure, and fostering innovation across multiple industries.
Furthermore, such a policy could provide the U.S. with a significant competitive advantage over countries tightening crypto regulations or increasing tax burdens.
Crypto analysts foresee dramatic valuation swings as foreign tokens could decline due to heavier taxation. U.S.-based cryptocurrencies may dominate investor portfolios, potentially driving a 100x surge for promising domestic projects.
IRS Regulation Overreach
Adding to the mix, Senator Ted Cruz aims for a new IRS rule requiring decentralized finance (DeFi) platforms to file detailed tax forms, including user transaction details, names, and addresses. Cruz has called the rule, finalized in December, an overreach that stifles innovation and jeopardizes privacy.
In a fiery statement, Cruz vowed to challenge the regulation using the Congressional Review Act, which allows Congress to reverse federal agency rules. With a Republican majority, his resolution could gain momentum within the next 60 days.
Ted’s opposition aligns with his broader disapproval of Central Bank Digital Currencies (CBDCs), which he perceives as a danger to decentralization. He argued that the regulation undermines the core principles of DeFi, emphasizing that decentralized autonomous organizations (DAOs), which govern many DeFi platforms, often lack centralized systems necessary for compliance.
