Bitcoin tax-free payments proposed by Jack Dorsey

     

Jack Dorsey supports Bitcoin tax-free payments

Jack Dorsey, founder of Square, called for a de minimis tax exemption on small Bitcoin transactions to promote Bitcoin tax-free payments for daily use.

Speaking on Wednesday, Dorsey announced that Square integrated Bitcoin payment services for merchants, enabling BTC payments through its checkout and point-of-sale systems.

“We want Bitcoin to be everyday money ASAP,” Dorsey said, emphasizing the importance of easing tax burdens on small crypto transactions.

His proposal aligns with a bill from Wyoming Senator Cynthia Lummis, who suggested exempting Bitcoin transactions under $300 from capital gains tax, with a yearly exemption limit of $5,000.

Currently, US tax rules classify all Bitcoin transactions as taxable events. This means users must pay capital gains tax whenever BTC’s price increases between purchase and use, discouraging its use as everyday money.

Bitcoin advocates believe that allowing small tax-free transactions would help fulfill Satoshi Nakamoto’s vision of Bitcoin as both a peer-to-peer payment system and a store of value.

Crypto industry backs Bitcoin payment tax exemption

Crypto executives and lawmakers are increasing efforts to establish Bitcoin payment tax exemptions that would simplify crypto use for consumers.

In October, the US Senate Committee on Finance held a hearing to discuss crypto tax regulations amid concerns about innovation leaving the country.

Lawrence Zlatkin, vice president of tax at Coinbase, urged Congress to adopt a de minimis exemption for transactions up to $300. He said such a move would help stimulate crypto payment adoption in retail and ensure that innovation remains within the United States.

Countries like the United Arab Emirates (UAE), Germany, and Portugal already offer more favorable tax conditions for digital assets. These tax-friendly policies have drawn investment and encouraged crypto companies to establish operations abroad.

Without similar reforms, experts warn that the United States could lose its competitive edge in global crypto development.