Why is Illinois introducing a 0.2% cryptocurrency tax?

Illinois introduced the 0.2% tax on certain Bitcoin (CRYPTO:BTC) and other digital asset transactions as part of its fiscal 2027 budget. The Digital Asset Tax Act will take effect on Jan. 1, 2027, and applies to covered activities including exchanges, transfers, custody and wallet services.

What are the new requirements for cryptocurrency brokers under the Illinois law?

Bitcoin (CRYPTO:BTC) brokers and other covered digital asset service providers must register with the Illinois Department of Revenue before conducting taxable activities. They must also collect the 0.2% tax as a separate line item and submit monthly reports on covered transactions.

Why did the Commodity Futures Trading Commission criticise the Illinois cryptocurrency tax?

The Bitcoin (CRYPTO:BTC) tax was criticised by Commodity Futures Trading Commission Chair Brian Quintenz Selig, who said the measure could place Illinois businesses and residents at a disadvantage. He also argued the state acted while federal lawmakers continue developing national cryptocurrency rules.

How could the Illinois cryptocurrency tax affect firms outside the state?

Bitcoin (CRYPTO:BTC) businesses located outside Illinois may still fall under the law if they provide services to customers in the state. Tax advisers said customer mailing addresses, IP addresses and other records may be used to determine whether the tax applies.

What does the Illinois cryptocurrency tax mean for US regulation?

Bitcoin (CRYPTO:BTC) taxation is being debated at both state and federal levels as Congress considers new digital asset tax proposals. The Illinois law comes while the Commodity Futures Trading Commission and the Securities and Exchange Commission review broader cryptocurrency market structure and regulatory rules.

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CFTC chair criticises Illinois crypto tax

Written by Isaac FrancisPublished Jul 3, 2026, 6:40 AM

CFTC Chair Brian Quintenz Selig criticised Illinois' new 0.2% tax on certain digital asset transactions before its planned 2027 launch.
The law requires brokers to register, collect the tax and submit monthly reports on covered cryptocurrency activity.
The criticism comes as US lawmakers and regulators continue developing federal cryptocurrency tax and market structure rules.

Illinois approved a 0.2% tax on certain digital asset transactions from Jan. 1, 2027, prompting Commodity Futures Trading Commission Chair Brian Quintenz Selig to argue the measure could slow cryptocurrency activity and create conflicts with emerging federal policy.

The Digital Asset Tax Act forms part of Illinois' fiscal 2027 budget and requires brokers to register with the Illinois Department of Revenue, collect the tax as a separate charge and submit monthly reports covering eligible cryptocurrency transactions.

“Illinois lawmakers slammed the brakes on technological progress,” said Commodity Futures Trading Commission Chair Brian Quintenz Selig.

The law applies to activities including cryptocurrency exchanges, transfers, custody and wallet services, while tax advisers said customer addresses, IP addresses and other records may be used to determine whether firms fall within Illinois' jurisdiction, including some businesses based outside the state.

Federal discussions on cryptocurrency taxation and market structure remain underway, while following the announcement no listed company was directly affected and no share price reaction applied.

Industry criticism has continued since Illinois Governor JB Pritzker signed the budget, with Strategy co-founder Michael Saylor describing the tax as a "Big Mistake" and industry groups arguing it could increase costs for users and businesses.

The debate comes as Congress reviews several cryptocurrency tax proposals and the Commodity Futures Trading Commission and Securities and Exchange Commission continue a joint review of digital asset market structure, derivatives and margin rules.