Bitcoin advocates lobby Congress: Why BTC payments must be granted tax exemptions

Bitcoin advocacy groups are stepping up lobbying efforts in the U.S. Congress to expand tax exemptions, including Bitcoin and major network tokens. Behind this policy push is the compliance dilemma faced by millions of cryptocurrency users in the United States.

Policy Dilemma: Stablecoins First, BTC Excluded

According to the latest news, a key issue in the tax reform proposals currently under consideration by the Senate Finance Committee and the House Ways and Means Committee is that tax benefits may only cover payment stablecoins that meet the standards of the GENIUS Act, completely excluding Bitcoin.

What does this mean? Under current rules, the IRS still considers Bitcoin as property. Even a $10 coffee transaction technically requires users to perform cost basis and profit/loss calculations, creating a significant barrier to the widespread adoption of everyday payments.

Advocates’ Demands: Specific and Feasible Solutions

The Bitcoin Policy Institute, in collaboration with organizations such as Bitcoin Voter, Blocks, Crypto Council, Digital Chamber, MoonPay, and River, recently sent a letter to key congressional committee chairs Michael Crapo and Jason Smith, proposing a set of concrete reform measures.

Core proposal details

The design logic of this plan is clear: setting a market cap threshold ensures only mainstream network tokens benefit; transaction limits prevent tax evasion risks; and it provides practical convenience for ordinary users’ daily payments.

Core arguments of the advocates

• Current tax rules undermine the original intent of simplifying reporting
• Limiting benefits to stablecoins cannot address the compliance burdens faced by many U.S. users
• After 2025, reporting with Form 1099-DA will be required; delaying adjustments will lead to higher compliance costs and audit risks for businesses and individuals

Why is this issue so important now?

From a market size perspective, this is not a niche problem:

• Approximately 45 million Americans hold cryptocurrencies
• About 7 million U.S. users are expected to use Bitcoin or other network tokens for payments in 2024
• The U.S. has become one of the largest markets for Bitcoin payments
• Bitcoin’s market cap reaches $1.90 trillion, accounting for 58.43% of the entire crypto market

These data indicate that Bitcoin payments are no longer a niche geek activity but involve the actual needs of millions of users. Unreasonable tax rules are hindering further development of this market.

Policy Outlook for 2026

The timing of this lobbying effort is critical. As the new Congress gradually adopts a more open attitude toward digital assets, and with the upcoming implementation of Form 1099-DA, the window for tax reform is opening.

While the advocates’ proposal still faces questions like “Why give cryptocurrencies special treatment,” their reasoning is somewhat persuasive: if stablecoins can receive near-cash tax treatment, Bitcoin as a store of value and payment tool should be similarly treated. This is not special favor but a logical consistency in policy.

Summary

This lobbying effort reflects the fundamental dilemma faced by the cryptocurrency industry: policy frameworks are still catching up with technological developments. Bitcoin advocates’ demands are pragmatic—they are not asking for complete tax exemption but for simplified tax reporting within reasonable limits for everyday payments.

The key question boils down to: will the U.S. Congress recognize Bitcoin’s practical role as a payment tool and adjust tax rules accordingly? Based on the size and lobbying strength of these advocacy groups, this issue is gaining increasing importance on the policy agenda for 2026. Monitoring the responses of congressional committees and the progress of related bills will be crucial indicators of the policy direction.