Steve Daines

Sen. Steve Daines (R-Mont.) circulated draft cryptocurrency tax legislation this week, as lawmakers ride a wave of enthusiasm for offering clarity to digital asset taxation in the aftermath of a bipartisan vote in the House earlier this month.

The retiring member of the Senate Finance Committee has long expressed a desire to set down a marker on the issue before he departs, and the legislation is expected to be formally introduced next week, according to Daines’ office.

Releasing the crypto tax legislation before the midterm elections leaves the door open to potential Senate action in the lame-duck session, though it’s ...