The push to make Bitcoin function like real money in the United States has gained a powerful advocate.
Jack Dorsey, the founder of Square, is calling for a fundamental shift in how small crypto transactions are taxed – arguing that without reform, Bitcoin will never reach its potential as a tool for everyday commerce.
Dorsey’s latest comments followed Square’s rollout of new Bitcoin payment features for merchants, allowing businesses to accept the cryptocurrency through its checkout and point-of-sale systems. But while the technology exists, the tax code remains an obstacle.
In the U.S., even the smallest Bitcoin payment – whether for coffee or a train ticket – can trigger capital gains tax if the asset’s value has appreciated. That burden, Dorsey says, effectively stops Bitcoin from functioning as money. “We want Bitcoin to be everyday money as soon as possible,” he wrote, urging regulators to adopt a de minimis exemption for low-value transactions.
The idea isn’t new, but momentum is building. Wyoming Senator Cynthia Lummis proposed a similar measure earlier this year, aiming to exclude Bitcoin transactions under $300 from tax reporting, up to an annual cap of $5,000. The policy would treat small crypto purchases like cash transactions – simple, direct, and tax-free.
Supporters see it as a necessary step toward mainstream adoption. Critics, however, warn that without clearer definitions of “small” or “incidental” transactions, such exemptions could complicate enforcement.
Growing Industry Pressure on Lawmakers
Crypto executives have also joined the call for reform. During an October Senate Finance Committee hearing, Coinbase’s vice president of tax, Lawrence Zlatkin, urged lawmakers to formally enshrine the exemption into law. He argued that easing the tax burden would boost innovation in U.S. payment systems and stop talent from migrating to countries with friendlier rules.
That warning carries weight. Jurisdictions like Germany, Portugal, and the UAE already allow consumers to make small digital payments without triggering capital gains taxes. As a result, these nations are becoming hubs for crypto commerce and fintech startups, leaving the U.S. at a growing disadvantage.
The debate comes amid heightened political uncertainty. As the federal government operates with limited capacity due to the ongoing shutdown, progress on new tax legislation has slowed. Still, Dorsey’s influence – combined with growing bipartisan recognition that crypto needs clearer rules – could revive the discussion once Congress reconvenes.
For now, Bitcoin remains trapped between its ideological promise as peer-to-peer cash and its legal reality as a taxable asset. Whether Washington chooses to modernize the code will determine whether Bitcoin stays a speculative store of value – or finally becomes money people can actually use.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
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Source: https://coindoo.com/will-the-u-s-finally-let-bitcoin-be-used-like-cash-jack-dorsey-thinks-it-should/
