Cato Institute: U.S. Bitcoin tax rules hinder everyday payment applications, calls for reform

According to The Block, the Washington think tank Cato Institute published an article criticizing the current btc-42">Bitcoin tax policy in the United States. Researcher Nick Anthony pointed out that the current tax framework treats Bitcoin as "property" rather than "currency," requiring users to calculate capital gains or losses for each transaction individually, even for everyday small purchases. This makes tax reporting extremely cumbersome and effectively hinders the adoption of Bitcoin as a payment tool.

In response, the Cato Institute proposed several reform suggestions, including completely eliminating the capital gains tax on cryptocurrency payments and introducing a tax-free threshold for small transactions. The report also mentioned the existing "Virtual Currency Tax Fairness Act," which aims to exempt cryptocurrency transactions under $200, but Anthony believes this threshold is too low to cover the actual spending levels of consumers. Currently, the Trump administration has expressed support for establishing a small tax exemption for cryptocurrency transactions and will continue to evaluate related legislative options.