- Trending
- Comments
- Latest
Block founder Jack Dorsey has reignited the debate over Bitcoin tax exemption, urging U.S. lawmakers to exempt small Bitcoin transactions from capital gains reporting. His appeal comes as Senator Cynthia Lummis (R-WY) confirmed that legislative work to introduce such an exemption is already underway.
“We need a de minimis tax exemption for everyday Bitcoin transactions,” Dorsey wrote on X, as Block announced a new Bitcoin payments integration for small businesses through its Square platform.
Lummis promptly replied, “Working on it. If this is of interest to you, please tell your Senators/House member!” signaling the resumption of her campaign to reform crypto taxation.
The push for a Bitcoin tax exemption echoes unfinished efforts from July, when Lummis sought to attach pro-crypto amendments to President Trump’s sweeping reconciliation bill. Despite strong support from digital asset advocates, time ran out before the amendments reached the Senate floor.
Under current IRS policy, crypto assets are treated as property, meaning even minor Bitcoin purchases such as buying coffee, create taxable events. This treatment imposes what critics call an “unrealistic burden” on both consumers and merchants.
Industry leaders argue that a Bitcoin tax exemption would streamline compliance and encourage everyday crypto use. According to Arthur Azizov, Founder and Investor at B2 Ventures, the exemption “is a pragmatic fix for a paperwork problem,” enabling small businesses and wallets to experiment with Bitcoin payments more freely.
However, Azizov warned that the exemption alone won’t make Bitcoin a stable payment method. “Stores can still lose money if Bitcoin’s price changes between payment and conversion to dollars,” he said.
He emphasized that the measure must be “part of a package that includes clear broker-reporting rules, anti-fragmentation protection, and fiat-conversion tools” to ensure wider merchant adoption.
The Bitcoin tax exemption proposal was previously part of a broader crypto-friendly amendment to Trump’s “One Big, Beautiful Bill.” Despite bipartisan discussions, the measure was excluded when Vice President J.D. Vance cast the tie-breaking vote that sealed the bill’s passage.
Lummis, one of Washington’s most outspoken crypto advocates, has since vowed to reintroduce the exemption, calling it a “key step toward mainstream Bitcoin adoption.”
In May, she and Senator Bernie Moreno (R-OH) also sent a joint letter to Treasury Secretary Scott Bessent, urging immediate review of a separate Biden-era tax policy that could force U.S. crypto firms to pay taxes on unrealized gains — another hurdle in the broader crypto regulatory landscape.
For policymakers, the renewed attention on the Bitcoin tax exemption represents a balancing act between innovation and fiscal accountability. For investors, it could mark the beginning of a more favorable regulatory environment that normalizes Bitcoin in everyday commerce.
While Dorsey’s public advocacy adds momentum, passage will depend on bipartisan negotiation in a divided Senate, and whether lawmakers view the exemption as a pathway to innovation or a potential loophole in U.S. tax law.
Still, the political and commercial alliance forming between tech leaders like Dorsey and legislators like Lummis signals a turning point. Their joint push for Bitcoin tax exemption could determine how America treats digital currency not just as an asset, but as money itself.
