Using Bitcoin to buy groceries or pay a bill is simple. Under current US tax law, it is anything but. Every transaction—no matter how small—creates a taxable event that must be reported to the IRS, forcing users to count capital gains from purchases as a cup of coffee.
This legal reality has kept Bitcoin more in the hands of investors than in everyday wallets, and a Washington advocacy group says Congress has just months left to fix it.
Shrinking window for action
The Bitcoin Policy Institute (BPI) has been working the halls of Capitol Hill, meeting with 19 offices across the House and Senate over the past three months.
The group is pushing for a de minimis tax exemption — a rule that allows small bitcoin transactions within a set dollar amount to completely avoid capital gains.
Source: Bitcoin Policy Institute
According to the BPI’s own timetable, the window for such a measure to be adopted runs from now until August 2026. After that, midterm election pressures are expected to limit any serious movement on complex tax legislation.
Senator Cynthia Lummis of Wyoming has been the loudest voice in Congress on the issue. He proposed an independent bill in July 2025 that would exempt crypto transactions worth $300 or less, with an annual minimum of $5,000.
The account has been suspended. And when Lummis leaves the Senate in January 2027, the BPI warns that his departure could remove its most loyal champion from the legislative scene in years.
Source: Bitcoin Policy Institute
Two bills, one goal – but no clear path
The legislative landscape is complicated by competing proposals. While Lummis’ bill targeted bitcoin and broader crypto transactions, a separate House bill introduced by Reps. Max Miller and Stephen Horsford focused solely on dollar-denominated stablecoins.
The existence of two bills with different scopes has clouded the way forward, even as the BPI reports that bipartisan support for some forms of exemptions remains intact.
Pierre Rochard, a board member at Bitcoin exchange firm Strive, puts the stakes clearly:
“The number one barrier to Bitcoin payment adoption is tax policy, not scale technology.”
Shopping with Bitcoin
This line goes to the heart of what supporters are fighting for. The current tax treatment effectively penalizes anyone who tries to spend Bitcoin instead.
Every purchase requires tracking the value of the asset at the time of acquisition and again at the point of sale—a level of accounting that makes routine transactions impossible for most people.
There is a de minimis exemption in US law for foreign currency transactions, which gives advocates a legal precedent to point to. Whether Congress will act on it before the political calendar closes remains an open question — one that the BPI says may not come up again for a long time.
Featured image from Unsplash, chart from TradingView
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