Square’s Bitcoin integration reignites debate over crypto’s role as everyday money
Jack Dorsey, founder of Square and long-time Bitcoin advocate, has called on U.S. lawmakers to introduce tax exemptions for small Bitcoin transactions, arguing that such a move would accelerate the digital currency’s use as “everyday money.” His comments followed Square’s latest integration of Bitcoin payment services into its merchant checkout and point-of-sale systems on Wednesday.
“We want Bitcoin to be everyday money ASAP,” Dorsey said, emphasizing that tax-free microtransactions are key to unlocking Bitcoin’s potential as a peer-to-peer payment system rather than just a speculative asset.
Push for De Minimis Tax Exemption on Bitcoin Transactions
Under current U.S. tax law, every Bitcoin transaction — no matter how small — is treated as a taxable event. This means users must calculate and report capital gains or losses when spending BTC, even on minor purchases like coffee or groceries.
Senator Cynthia Lummis recently proposed a “de minimis” exemption that would exclude BTC transactions under $300 from capital gains tax, with an annual exemption cap of $5,000. The bill aims to make Bitcoin practical for everyday use while reducing the tax burden for small users.
“The U.S. should encourage innovation, not penalize it with complex tax reporting for small transactions,” said Lawrence Zlatkin, vice president of tax at Coinbase, during an October Senate Finance Committee hearing.
Crypto Industry Backs Simpler Tax Rules
Crypto industry leaders, including executives from major exchanges and payment platforms, have backed the proposal. They argue that simpler, tax-free rules for small payments would boost Bitcoin adoption among merchants and consumers while ensuring payment innovation remains in the U.S.
Several countries — including Germany, Portugal, and the United Arab Emirates (UAE) — already offer favorable tax treatment for small digital asset transactions, making them attractive destinations for crypto businesses.
“Without clear and fair tax policies, we risk losing the future of payment innovation to other regions,” Zlatkin warned lawmakers.
Square’s new Bitcoin payment feature allows merchants to accept BTC directly via checkout terminals and online systems, automatically converting funds if needed. The integration reinforces Dorsey’s broader vision of Bitcoin as an open, global money system that operates outside traditional banking rails.
Dorsey’s call for tax-free Bitcoin payments highlights a growing push to align U.S. regulations with global crypto innovation — ensuring that Bitcoin can evolve from an investment asset into truly usable, digital cash.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.