Jack Dorsey Renews Push for Bitcoin Tax Breaks and U.S. Crypto Reserve

Jack Dorsey has renewed his call for a tax-free limit on small Bitcoin payments, arguing that such a move was necessary for the premier cryptocurrency to function as a practical, everyday currency.

Dorsey’s advocacy follows the integration of Bitcoin payment options into Square’s checkout systems.

The update lets merchants accept Bitcoin or instantly convert it to U.S. dollars.

https://twitter.com/jack/status/1976056646138036581

Senator Lummis Joins Push for Bitcoin Tax Exemption

Under existing U.S. tax laws, every Bitcoin transaction is a taxable event.

Any increase in value between purchase and use, even on minor payments like buying a coffee, incurs a capital gains tax. This framework creates unnecessary friction for consumers and inhibits innovation, which explains why industry leaders are pushing for reforms.

At an October Senate Finance Committee hearing, Coinbase’s Vice President of Tax, Lawrence Zlatkin, urged lawmakers to approve an exemption that would “keep payment innovation in the U.S.” rather than driving it overseas.

This call for legislative action has now found a powerful political ally.

https://twitter.com/pete_rizzo_/status/1973402152899928555

Senator Cynthia Lummis has publicly supported Dorsey’s position, confirming that legislation to address the issue–the Digital Asset Tax Fairness Act–had already been introduced in Congress.

The proposal would exempt crypto transactions below $300 from capital gains reporting, with a yearly limit of $5,000.

Lummis contends that this measure will simplify small Bitcoin purchases, aligning U.S. policy with nations like Germany, Portugal, and the UAE, where forward-thinking tax rules have correlated with rapid crypto adoption.

Lummis’s Plan for a U.S. Bitcoin Reserve

Lummis’s tax proposal is one component of the Senator’s broader strategy to establish the U.S. as a leader in digital asset innovation.

Last year, she suggested converting part of America’s gold reserves into Bitcoin to create a long-term Bitcoin reserve, representing about 5% of the total supply, and held for twenty years.

She argued that such a move could help protect the U.S. economy from inflation and support financial stability without adding pressure to the national budget.

By August 2025, Treasury Secretary Scott Bessent announced that the Strategic Bitcoin Reserve would expand through budget-neutral acquisitions, mainly using seized assets from criminal cases. Lummis endorsed the plan, calling it a realistic way to build the nation’s holdings.

Both officials see the reserve as part of a wider effort to strengthen the country’s position in the global digital economy.

Their push comes as other nations, including Sweden, consider forming their own Bitcoin and digital asset reserves to prepare for the growing role of digital currencies in the financial sector.

Dorsey’s push for everyday Bitcoin payments and Lummis’s push for national reserves point in the same direction: helping the United States stay competitive in the future of money.