U.S. Treasury Secretary Scott Bessent Made a Statement About Bitcoin Today! Does China Have a Secret Cryptocurrency Plan?

As regulatory and tax policies regarding digital assets take center stage in the US Senate, a notable exchange took place between Cynthia Lummis and Scott Bessent regarding the taxation of Bitcoin.

Lummis indicated that working with the Treasury Department could provide clarity on Bitcoin taxation and that a potential “de minimis” exemption for small transactions could be considered.

Speaking at a hearing before the Senate Banking, Housing, and Urban Affairs Committee, which focused on U.S. financial stability, Lummis highlighted the complexity of taxing small-scale digital asset transactions and calculating capital gains on Bitcoins purchased at different prices.

Bessent acknowledged that the issue is technically quite complex, noting that the Treasury Department’s Office of Tax Policy could work with Lummis’s team to provide guidance. While no definitive decision on Bitcoin tax exemption has been announced, the possibility of an exception for small transactions was discussed between the two.

Lummis also raised the question of whether China is challenging the US’s financial leadership through digital assets and blockchain technology. Bessent noted that China is testing digital asset frameworks through Hong Kong and maintaining financial “sandbox” practices via the Hong Kong Monetary Authority. However, he stated that the US Treasury Department has no concrete observations regarding claims of gold-backed digital assets.

The need for regulation also came to the forefront during the session. Bessent stated that clear and unambiguous rules are essential for digital assets, emphasizing the importance of legislation, particularly regarding stablecoin regulations and market structure. In this context, he openly supported the bill known as the “Clarity Act”.

“We need to get this bill to the finish line,” said Bessent, adding that market participants opposed to the regulations might prefer to move to countries with looser oversight. The session was heated at times, with Senator Mark Warner’s statement, “I feel like I’m in crypto hell,” drawing attention.

Bessent emphasized the importance of integrating the digital asset sector into the US economy, stating that a balance must be struck between innovation and “safe, robust, and intelligent applications.” Addressing concerns that new regulations could lead to deposit outflows from smaller and community banks, Bessent stressed that deposit stability is critical to the local lending mechanism.

Bessent had stated the previous day at a hearing before the House Financial Services Committee that the US government does not have the authority to bail out Bitcoin or instruct banks to hold cryptocurrencies. Emphasizing that taxpayers’ funds cannot be used to purchase BTC, Bessent said the government’s exposure to Bitcoin is limited to assets seized by law enforcement.

*This is not investment advice.