The tax barrier: why taxation policy limits the adoption of Bitcoin as a payment method

The integration of Bitcoin into everyday payment systems faces an obstacle that goes beyond technical issues: the existing tax framework. While many analysts point to scalability limitations as the main challenge, experts like Pierre Rochard, a board member of Strive, argue that tax policies are actually the decisive factor hindering the widespread adoption of BTC as a medium of exchange.

The core of the problem lies in the lack of provisions that simplify the tax treatment of small transactions. The absence of a de minimis exemption for low-value operations means that every Bitcoin movement is subject to tax obligations, discouraging its practical use in daily payments.

The challenge of tax exemptions on smaller transactions

During 2025, specialized organizations like the Bitcoin Policy Institute expressed well-founded concerns about this regulatory limitation. The organization emphasized that without tax exemptions for transactions below certain amounts, Bitcoin can hardly function as everyday money.

U.S. lawmakers have explored different approaches to this dilemma. One proposal under consideration seeks to restrict de minimis exemptions exclusively to stablecoins backed by dollar reserves and short-term government securities. This measure has faced considerable resistance within the crypto ecosystem, which perceives it as discriminatory against Bitcoin and its decentralized features.

Initiatives to reform tax policy

Throughout 2025, Wyoming Senator Cynthia Lummis introduced a legislative initiative proposing substantial changes to the tax treatment of digital assets. The proposal includes a de minimis exemption of $300 per transaction, accompanied by an annual cap of $5,000 on cumulative exemptions. Additionally, it includes measures to exempt charitable donations made in cryptocurrencies from taxation and suggests deferring taxation of income from mining or staking until the point of sale.

Prominent industry figures have expressed their support for these tax reforms. Jack Dorsey, founder of the payment platform Square, has publicly supported tax exemptions on small Bitcoin transactions, emphasizing that BTC should evolve into a “daily circulation currency” more quickly.

Diverging perspectives on policy direction

However, reform advocates face strong criticism from other sectors. Marty Bent, a well-known Bitcoin advocate and co-founder of Truth for the Commoner, dismissed the proposal for a limited tax exemption for stablecoins as “counterproductive” and unjustified from the standpoint of coherent public policies.

This disagreement highlights a deeper tension: integrating digital assets into traditional regulatory frameworks requires deliberate political decisions that balance financial innovation with fiscal responsibilities. The resolution of this debate will largely determine the viability of Bitcoin as a genuine alternative for everyday transactions.