Bitcoin Policy Institute Reps Sound Alarm On De Minimis Tax Exclusion

US lawmakers are only considering de minimis tax exemptions for dollar-pegged stablecoins, according to Bitcoin Policy advocate Conner Brown.

Representatives of the Bitcoin Policy Institute (BPI), a nonprofit Bitcoin advocacy organization, warned that US lawmakers have not included a de minimis tax exemption for Bitcoin transactions below a certain threshold.

“De Minimis tax legislation may be limited to only stablecoins, leaving everyday Bitcoin transactions without an exemption,” Conner Brown, BPI’s head of strategy, said on X, adding that the decision to exclude Bitcoin (BTC) is a “severe mistake.”

In July, Wyoming Senator Cynthia Lummis introduced a bill proposing a de minimis tax exemption for crypto transactions of $300 or less, with a $5,000 annual limit on tax-free transactions and sales.

The bill proposal also included tax exemptions for digital assets used for charitable donations and tax deferment for crypto earned through mining proof-of-work (PoW) protocols or staking to secure blockchain networks.

Allowing a tax exemption for small Bitcoin transactions would increase its use as a medium of exchange rather than just as a store of value asset, allowing a new financial system built on a Bitcoin standard, BTC advocates say.

The discussion around de minimis tax exemptions has also raised questions about whether such relief should apply to stablecoins, which are designed to maintain a stable value.

“Why would you even need a De Minimis tax exemption for stablecoins,” Marty Bent, founder of media company Truth for The Commoner (TFTC), wrote on X. “They don’t change in value. This is nonsensical.”

Cointelegraph reached out to BPI about the proposed legislation, but had not received a response at time of publication.

Related: Japan’s new crypto tax could wake ‘sleeping giant’ of retail investors

Source: CoinTelegraph