Jack Dorsey Calls for U.S. Tax Relief on BTC Payments

Dorsey Pushes for Everyday BTC Use

Jack Dorsey, founder of Square, called for a de minimis tax exemption on small BTC transactions to make the cryptocurrency more practical for daily use. “We want BTC to be everyday money ASAP,” he said on Wednesday, later than Square integrated BTC payments into its checkout and point-of-sale systems.

The proposal would remove the capital gains burden on low-value BTC payments, a long-standing obstacle to using the asset as a medium of platform in the U.S. His comments came as Senator Cynthia Lummis renewed efforts to introduce an exemption covering transactions of $300 or less, with a total annual cap of $5,000.

“The current rules make it impractical to use BTC for small purchases,” a Square spokesperson said, adding that the company supports clear tax relief for day-to-day crypto payments.

Investor Takeaway

Push for a De Minimis Exemption

Under current U.S. tax law, every BTC transaction is a taxable event. Holders owe capital gains tax when the sale or payment value exceeds the purchase price, even for small transactions such as coffee purchases. That complexity has sluggished BTC’s adoption as a payments currency, even as its role as a store of value expands.

Senator Lummis’s Digital Asset Tax Fairness Act, introduced in July, viewks to remove that friction. The bill mirrors exemptions already used in other countries to promote digital payments. The measure would exempt BTC and other crypto transactions under $300 from capital gains reporting, simplifying compliance for both consumers and merchants.

“Every small crypto transaction shouldn’t require a tax form,” Lummis said when she introduced the bill. Her proposal gained traction following bipartisan frustration over the IRS’s lack of clarity on digital asset reporting thresholds.

Industry and Congressional Response

The debate over de minimis exemptions resurfaced during an October Senate Finance Committee hearing on crypto taxation. Lawrence Zlatkin, Coinbase’s vice president of tax, urged lawmakers to codify an exemption up to $300, arguing that it would assist “keep innovation in payments within the U.S.” rather than overseas.

Several crypto executives, including Dorsey, have echoed that sentiment, saying excessive tax reporting requirements push companies and developers to jurisdictions with friendlier rules. “If we want BTC to be used as money, we can’t tax every coffee,” Zlatkin told senators during the hearing.

Analysts say the proposal reflects a broader policy shift toward normalizing digital assets within everyday commerce. The change could reduce administrative overhead for merchants accepting crypto while making BTC payments more attractive for consumers wary of complex reporting requirements.

Investor Takeaway

Global Context and Competitive Pressures

Other jurisdictions have already introduced similar rules. Germany exempts crypto held for more than a year from capital gains tax, while Portugal and the United Arab Emirates offer zero or low tax regimes on digital assets. These policies have drawn crypto companies, funds, and developers away from the U.S., viewking regulatory clarity and favorable tax treatment.

Industry groups argue that without reform, the U.S. risks losing competitiveness in crypto payments and fintech innovation. “Other markets are moving quicker,” one Washington-based policy analyst said. “A simple de minimis exemption could be enough to level the playing field.”