Dorsey Wants Tax-Free Bitcoin Payments

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Jack Dorsey, the founder of Square and a major supporter of Bitcoin, has proposed that small Bitcoin transactions should be exempt from taxes. His idea centers around creating a “de minimis” exemption that would allow everyday purchases with Bitcoin—like buying a cup of coffee or groceries—without triggering capital gains tax.

Right now, in the United States, even the smallest Bitcoin transaction is considered a taxable event. This means that if you spend Bitcoin, you technically have to calculate and report the profit or loss based on its value change since you acquired it. Dorsey believes this is a huge obstacle that prevents Bitcoin from functioning as real money rather than just an investment asset.

He’s calling for lawmakers to approve legislation that would exempt low-value Bitcoin transactions, possibly under a specific limit such as $300. This could help normalize the use of Bitcoin in everyday commerce, making it more convenient for both users and merchants.

Some lawmakers, including Senator Cynthia Lummis, have shown support for the idea. Advocates argue that this step would encourage wider Bitcoin adoption and bring it closer to mainstream use. On the other hand, critics worry it could complicate tax enforcement or give Bitcoin preferential treatment compared to other digital assets.

If implemented correctly, this policy could redefine how people view and use Bitcoin—turning it from a speculative asset into a real payment option. But it raises questions about fairness, regulation, and practicality.

Would tax-free Bitcoin payments finally make crypto useful for everyday purchases, or do you think such exemptions would create more problems than benefits?