Tax Policy, Not Scaling, is Bitcoin’s Biggest Payment Adoption Hurdle

Summary:

Pierre Rochard of Bitcoin treasury firm Strive argues that tax policy—not technical scaling—is the primary barrier to Bitcoin (BTC) adoption as a payment method. The lack of a de minimis tax exemption means every BTC transaction triggers taxable events, discouraging everyday use. US lawmakers are considering tax exemptions exclusively for stablecoins, sparking backlash from Bitcoin advocates. Key figures like Senator Cynthia Lummis and Jack Dorsey are pushing for regulatory changes to enable BTC’s use as “everyday money.”

What This Means for You:

• Tax Complexity: Using BTC for payments requires tracking capital gains on every transaction, creating accounting burdens.
• Policy Awareness: Monitor legislative developments like Lummis’ proposed $300 transaction exemption bill.
• Strategic Spending: Consider BTC payments primarily for larger purchases where tax reporting effort is justified.
• Regulatory Risk: Stablecoin-focused exemptions could create a two-tier system favoring centralized digital assets.

Original Post:

The biggest obstacle to Bitcoin (BTC) being used as a payment method is tax policy, not scaling technology that reduces settlement times and transaction costs, according to Pierre Rochard, a board member for Bitcoin treasury company Strive.

“Here’s a metaphor: the best athlete can win against the worst athlete 100% of the time, if the best athlete plays. It drops to 0% if he doesn’t play and lets the weak athlete win,” Rochard said about BTC’s current lack of use as a method of payment.

In December 2025, the Bitcoin Policy Institute, a non-profit policy advocacy organization, sounded the alarm on the lack of a de minimis tax exemption for small Bitcoin transactions.

The lack of a de minimis tax exemption means that every time BTC is transferred to another party for payment, it is subject to taxes, hindering its use as a medium of exchange.

US lawmakers are considering limiting the de minimis tax exemption to overcollateralized dollar-pegged stablecoins, which are tokenized US dollars, backed 1:1 by fiat cash deposits or short-term government securities, which sparked backlash from Bitcoiners.

Related: Netherlands risks capital flight with unrealized gains tax on stocks, crypto

The Bitcoin community reacts to the lack of de minimis exemptions for BTC

In July 2025, Wyoming Senator Cynthia Lummis, an ally of the crypto industry, introduced a bill proposing a de minimis tax exemption on digital asset transactions of $300 or less.

The bill placed a $5,000 annual limit on exemptions and also included provisions to exempt cryptocurrencies used for charitable donations.

Lummis’ bill proposed deferring income from staking crypto to secure proof-of-stake blockchain networks or income earned from mining proof-of-work cryptocurrencies until those assets were sold.

Jack Dorsey, the founder of payments company Square, which integrated Bitcoin payments into its point-of-sale systems in October, called for a tax exemption on small BTC transactions.

“We want BTC to be everyday money ASAP,” Dorsey said. Meanwhile, others like Bitcoin advocate and co-founder of the Truth for the Commoner (TFTC) media outlet, Marty Bent, said the proposed tax exemption for stablecoins is “nonsensical.”

Magazine: How crypto laws changed in 2025 — and how they’ll change in 2026

Extra Information:

IRS Virtual Currency Guidance – Official tax treatment of crypto transactions in the US
Bitcoin Tax Guide – Comprehensive resource on crypto taxation principles
Digital Asset Tax Fairness Act – Full text of proposed legislation

People Also Ask About:

• What is a de minimis tax exemption? A threshold below which small transactions are exempt from capital gains reporting.
• How are Bitcoin transactions taxed? Each spend triggers a capital gains event based on acquisition vs. disposal price.
• Why do stablecoins get different tax treatment? Their peg to fiat reduces price volatility and tax calculation complexity.
• What’s the $600 IRS rule for crypto? Proposed requirement for exchanges to report transactions over $600 (currently $20,000).
• Can you avoid crypto taxes legally? Only through specific exemptions like the proposed de minimis rules or holding periods.

Expert Opinion:

“The tax treatment of Bitcoin as property rather than currency creates friction that directly contradicts its use case as electronic cash,” says tax attorney Amanda Russo. “Until regulators recognize this fundamental mismatch, technical improvements like the Lightning Network will have limited impact on daily adoption.”

Key Terms:

• Bitcoin payment adoption tax barriers
• De minimis exemption for cryptocurrency
• Capital gains tax on small BTC transactions
• Stablecoin vs Bitcoin tax treatment
• Lummis crypto tax bill 2025
• IRS virtual currency guidance
• Bitcoin as medium of exchange challenges

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