US lawmakers are solely debating de minimis tax exemptions for dollar-pegged stablecoins, as stated by Bitcoin Policy advocate Conner Brown.
Representatives of the Bitcoin Policy Institute (BPI), a nonprofit Bitcoin advocacy organization, alerted that US lawmakers have omitted a de minimis tax exemption for Bitcoin transactions below a specified ceiling.
“De Minimis tax legislation might be confined to solely stablecoins, leaving common BTC transactions without an exemption,” Conner Brown, BPI’s head of strategy, declared on X, further stating that the decision to exclude BTC constitutes a “severe mistake.”
In July, Wyoming Senator Cynthia Lummis put forth legislation proposing a de minimis tax exemption for crypto transactions of $300 or less, with a $5,000 annual cap imposed on tax-free transactions and sales.
The bill proposal also encompassed tax exemptions for digital assets utilized for charitable donations and tax deferment for crypto obtained through mining proof-of-work (PoW) protocols or staking to secure blockchain networks.
Granting a tax exemption for minor Bitcoin transactions would augment its use as a medium of exchange rather than simply as a store of value asset, thus permitting a new financial system to be constructed upon a Bitcoin standard, BTC advocates assert.
The discussion surrounding de minimis tax exemptions has likewise prompted inquiries regarding whether such relief should be applied to stablecoins, whose purpose is to maintain a consistent valuation.
“Why is a De Minimis tax exemption even necessary for stablecoins,” Marty Bent, founder of media company Truth for The Commoner (TFTC), opined on X. “Their value does not fluctuate. This is nonsensical.”
contacted BPI concerning the proposed legislation, but a response had not been furnished at the time of publication.
Bitcoin’s Value Rises Even as Peer-to-Peer Use Lags
The Bitcoin white paper, composed by its pseudonymous creator Satoshi Nakamoto in 2019, characterizes Bitcoin as a “peer-to-peer electronic cash system.”
However, relatively high transaction fees, average block times of roughly 10 minutes, and capital gains taxes on Bitcoin impede BTC’s deployment as a payment method for goods and services.
Numerous Bitcoin investors opt to retain BTC for the long term, sometimes securing fiat currency against their BTC holdings to pay expenses and fund routine acquisitions.
The Bitcoin Lightning Network is a secondary protocol conceived for BTC payments, which operates by locking a specified amount of BTC in a payment channel between two or more people.
Users linked through a payment channel may execute multiple transactions off-chain, with only the final net balance being recorded on the Bitcoin ledger for settlement once the channel is closed.
This renders BTC transactions faster and cheaper, as the users in the payment channel avoid waiting for new blocks to be generated or paying a network fee for each transaction among parties in the channel.
