Jack Dorsey and the Tax Challenge of Bitcoin: Why Politics Hinders More Than Technology

The path to widespread adoption of Bitcoin as a daily payment method is not blocked by technological limitations but rather by restrictive tax regimes, according to industry experts. Pierre Rochard, a board member of Strive, a Bitcoin treasury company, highlighted this often underestimated reality. The real challenge lies in the lack of tax exemptions for microtransactions, a gap that turns every Bitcoin payment into a potentially heavy tax event.

The irony is striking: while blockchain technology enables instant and low-cost transactions, existing regulatory frameworks require each transaction to be taxed, discouraging the actual use of Bitcoin as a medium of exchange. According to Cointelegraph, this situation prompted the Bitcoin Policy Institute, a non-profit advocacy organization, to sound the alarm in December 2025 regarding the glaring lack of exemptions for small transactions.

Tax obstacles overshadow Bitcoin’s technological challenges

The core issue remains simple but systemic: U.S. lawmakers are considering restricting de minimis exemptions exclusively to dollar-pegged stablecoins that are fully backed by cash reserves or short-term government securities. This approach has sparked a wave of criticism within the Bitcoin community, which denounces unfair discrimination against decentralized digital assets.

The situation reveals a conceptual gap: on one side, regulators seek to regulate centralized stablecoins; on the other, they largely ignore the concrete needs of users who want to use Bitcoin for accessible daily transactions.

The Lummis proposal: an attempt to unlock cryptocurrency payments

In July 2025, Wyoming Senator Cynthia Lummis, a prominent figure in crypto industry advocacy in the U.S. Congress, introduced a bill offering a different perspective. Her proposal envisioned a de minimis tax exemption for digital asset transactions not exceeding $300, with an annual cap of $5,000. The bill also included interesting provisions: the exemption would extend to cryptocurrencies donated to charitable organizations, and income generated from staking or mining would be deferred until the assets are sold.

Although progressive, this proposal received mixed reviews. Marty Bent, a Bitcoin advocate and co-founder of the media organization Truth for the Commoner, particularly challenged the focus on dollar-backed stablecoins, calling this restriction “absurd.”

Jack Dorsey and crypto figures: growing mobilization for change

Square founder Jack Dorsey has positioned himself at the forefront of this regulatory battle. With his experience in digital payments, Dorsey expressed unequivocal support for tax exemptions on microtransactions, arguing that Bitcoin must become “the currency of everyday life” as quickly as possible. His commitment goes beyond mere rhetoric; it represents a convergence of interests between private sector innovators and decentralization advocates.

Jack Dorsey is not alone. His advocacy is part of a broader mobilization of influential figures in the crypto ecosystem who recognize that without favorable tax clarity, transactional adoption of Bitcoin will remain confined to niches.

A regulatory battle redefining Bitcoin’s future

The ongoing debate transcends simple tax questions. It highlights the fundamental tensions between the vision of a decentralized digital currency and regulatory frameworks designed for centralized financial systems. The absence of a de minimis tax exemption for Bitcoin transactions directly hampers its evolution from an investment asset to a true medium of exchange.

Jack Dorsey and his sector allies advocate for an approach that recognizes the distinction between Bitcoin as a store of value and Bitcoin as a practical payment method. For this vision to materialize, regulators will need to reconsider their current positions and adopt tax frameworks that encourage rather than discourage innovation.