Today in crypto: Bitcoin advocates warned that a US proposed de minimis tax relief may apply only to stablecoins transactions, while spot Bitcoin ETFs posted their biggest inflows in over a month and the Federal Reserve rolled back crypto guidance for banks.
Bitcoin Policy Institute reps sound alarm on de minimis tax exclusion
Representatives of the Bitcoin Policy Institute (BPI), a nonprofit Bitcoin advocacy organization, warned that US lawmakers have not included a de minimis tax exemption for Bitcoin transactions below a certain threshold.
“De Minimis tax legislation may be limited to only stablecoins, leaving everyday Bitcoin transactions without an exemption,” Conner Brown, BPI’s head of strategy, said on X, adding that the decision to exclude Bitcoin is a “severe mistake.”
In July, Wyoming Senator Cynthia Lummis introduced a bill proposing a de minimis tax exemption for crypto transactions of $300 or less, with a $5,000 annual limit on tax-free transactions and sales.
The bill proposal also included tax exemptions for digital assets used for charitable donations and tax deferment for crypto earned through mining proof-of-work (PoW) protocols or staking to secure blockchain networks.
Allowing a tax exemption for small Bitcoin transactions would increase its use as a medium of exchange rather than just as a store of value asset, allowing a new financial system built on a Bitcoin standard, BTC advocates say.
Spot Bitcoin ETFs record $457 million inflows in “early positioning” push
Spot Bitcoin ETFs recorded $457 million in net inflows on Wednesday, marking their strongest single-day intake in more than a month as institutional demand showed signs of re-acceleration.
Fidelity’s Wise Origin Bitcoin Fund (FBTC) led the inflows, recording the largest daily intake at roughly $391 million, accounting for the majority of the day’s net inflows. BlackRock’s iShares Bitcoin Trust (IBIT) followed with around $111 million, according to data from Farside Investors.
The inflows lifted cumulative net inflows for US spot Bitcoin (BTC) ETFs to more than $57 billion, while total net assets climbed above $112 billion, equivalent to around 6.5% of Bitcoin’s total market capitalization.
The rebound followed a choppy stretch in November and early December, when flows alternated between modest inflows and sharp outflows. Spot Bitcoin ETFs last saw inflows above $450 million on Nov. 11, when funds pulled in roughly $524 million in a single day.
Fed pulls guidance blocking its banks from crypto
The US Federal Reserve on Wednesday withdrew guidance from 2023 that limited how Fed-supervised banks, including uninsured ones, engaged with crypto, as it was outdated and the “financial system and the Board’s understanding of innovative products and services have evolved.”
The guidance said uninsured banks must follow the same rules as federally insured institutions, based on the principle that similar activities pose similar risks and should be subject to identical regulation.
Uninsured banks were prevented from engaging in activities that weren’t permitted for national banks, like crypto services, which automatically disqualified Fed membership because the institution’s primary activities weren’t allowed.
The Fed issued new guidance the same day to establish a formal pathway for both insured and uninsured Fed-supervised state member banks to pursue “innovative activities,” such as cryptocurrencies, provided risk-management expectations are met.
