MichaelaAmerican entrepreneur and former Twitter CEO Jack Dorsey has called for a de minimis tax exemption on small Bitcoin transactions, arguing that such a move could make the cryptocurrency practical for everyday use, with the goal of turning Bitcoin into “everyday money.”
Key points:
- Jack Dorsey advocates for a de minimis tax exemption on Bitcoin transactions under $300 to make crypto practical for everyday payments.
- Senator Cynthia Lummis is actively pursuing legislation that would exempt small Bitcoin transactions from capital gains tax, with an annual cap of $5,000.
- Tax-free microtransactions could drive broader crypto adoption, increase transaction volume, and position digital assets as practical options for everyday spending.
“[We] need a de minimis tax exemption for everyday bitcoin transactions,” Dorsey wrote in an X post on Wednesday, shortly after his payments company, Square, announced that merchants can now accept Bitcoin through its checkout and point-of-sale systems.
In a separate post, Dorsey asserted that the broader crypto community envisions Bitcoin being used as a standard form of everyday payment.
Senator Cynthia Lummis replied to Dorsey’s X post, noting that she is actively pursuing tax exemptions for small Bitcoin transactions. “If this is of interest to you, please tell your Senators/House member,” Lummis urged. In July, Senator Lummis proposed a standalone crypto tax bill including a de minimis provision that would exempt Bitcoin transactions of $300 or less from capital gains tax, with an annual exemption limit of $5,000.
Under existing U.S. tax regulations, every Bitcoin transaction is subject to capital gains tax, requiring holders to pay on any increase in value, which restricts its practicality for everyday spending.
Tax Exemptions Could Boost SHIB
If the U.S. moves forward with tax exemptions for Bitcoin transactions under $300, it could pave the way for broader adoption of cryptocurrencies in everyday payments. Small-value transactions becoming tax-free would make using digital assets for routine purchases, such as coffee, groceries, or online services, far more practical for the average consumer.
This shift could also encourage other cryptocurrencies to gain traction as “spendable” tokens, increasing their utility beyond speculative trading. Lower friction in day-to-day payments may drive more frequent use, higher transaction volumes, and greater engagement with merchant platforms accepting crypto.
As adoption grows, liquidity across digital asset markets could improve, benefiting both users and businesses. If regulators signal approval for small-value crypto payments, it could accelerate the normalization of cryptocurrencies in daily commerce, helping position them as practical alternatives to traditional payment methods and expanding their role in the mainstream financial ecosystem.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
