Bitcoin advocates call on the US to amend stablecoin tax rules to promote tax-free daily payments with BTC

January 14 News, Bitcoin advocacy groups are stepping up lobbying efforts with U.S. lawmakers to modify existing and proposed stablecoin tax rules, extending the minimum tax exemption from stablecoins to Bitcoin and major network tokens. The organizations warn that if tax incentives are limited to dollar-pegged stablecoins, it will not address the compliance burdens faced by many U.S. users when using cryptocurrencies for everyday payments.

In summary, the Bitcoin Policy Institute, in collaboration with Bitcoin Voter, Blocks, Crypto Council, Digital Chamber, MoonPay, River, and other organizations, recently sent a letter to Senate Finance Committee Chairman Michael Crapo and House Ways and Means Committee Chairman Jason Smith. The letter states that the current proposals considered by Congress may only provide the minimum tax exemption for payment stablecoins that meet the GENIUS Act standards, completely excluding Bitcoin, which would undermine the original intent of simplifying tax reporting through reform.

Under current rules, the IRS still treats cryptocurrencies like Bitcoin as property, meaning even small transactions require cost basis and profit/loss calculations. The advocacy groups believe this approach is not conducive to the widespread adoption of Bitcoin payments. They recommend granting near-cash tax treatment to compliant stablecoins and including Bitcoin and major network tokens in the exemption system.

Specifically, the alliance proposes using a $25 billion market cap as the entry threshold for network tokens, with a tax-free limit of $600 per transaction and $20,000 annually, balancing compliance and regulatory needs. Data shows that approximately 45 million Americans currently hold cryptocurrencies, with Bitcoin dominating; in 2024, about 7 million U.S. users are expected to use Bitcoin or other network tokens for payments, making the U.S. one of the largest markets for Bitcoin payments.

Additionally, with the requirement to report digital asset transactions using Form 1099-DA after 2025, industry experts generally believe that without quickly adjusting the minimum tax rules, businesses and individuals will face higher compliance costs and audit risks. This is a key reason why Bitcoin advocates have been pushing for tax reform continuously into 2026.