Block Calls for $600 Tax Exemption to Bridge Bitcoin’s Usability Gap

The idea that bitcoin could be used to buy a cup of coffee has been more ideological than practical since the very inception of blockchain.

After all, bitcoin cannot become everyday money if spending it feels like filing paperwork, and under current U.S. tax law, digital assets are treated like investments. Choosing cryptocurrency at checkout has traditionally incurred a shopper tax responsibility for every asset “sale,” no matter if that value transfer is in fact, at least from the consumer and merchant’s point of view, a “spending” of the asset.

“When you pay with bitcoin, it’s treated as like selling a stock or an investment,” Janessa Lopez, head of Digital Assets Policy at Block, told PYMNTS. “You’re hit with a capital gains tax and a tax form, which makes using Bitcoin to pay for things like coffee or dinner really difficult and burdensome.”

That’s why, on Tuesday (Nov. 18), Block launched “Bitcoin is Everyday Money,” a campaign advocating for a de minimis tax exemption designed to modernize how bitcoin is treated under U.S. tax law.

“We are just advocating for bitcoin to be treated like money when it’s used like money, simple as that,” Lopez said.

It’s a vision originally heralded in Satoshi Nakamoto’s 2009 bitcoin white paper, but largely unrealized in daily commerce.

Read more: Merchants Using Square Can Now Accept Bitcoin Payments

The Merchant Value Proposition

While the policy messaging targets legislators and regulators, Block’s recent product rollout from its Square subsidiary aims at merchants, particularly small, local businesses where profit margins live and die on the edges of processing costs. The product enables millions of U.S. merchants to accept bitcoin directly at the point of sale, setting the stage for what the company hopes will become crypto’s most significant leap into everyday consumer transactions.

Block announced the plans for Square’s bitcoin payment acceptance in May.

“The biggest selling point for merchants to be accepting bitcoin is that it’s zero fees,” Lopez said of Square’s new offering, adding that bitcoin, when used as a direct payment rail, bypasses traditional intermediaries. “We hear from them every day about the burden of that 3% or upwards of 3% payment processing fee for credit card purchases.”

But technology alone isn’t enough, which is why Block is launching the policy campaign, which centers on a push for de minimis tax exemption on bitcoin payments up to $600, aligning the proposal with an existing threshold used for other federal reporting standards.

“This is a very specific and narrow ask that we’re advocating for. We’re not advocating to change investment taxes or sales tax,” Lopez said, framing the issue as one of classification. “Bitcoin is a unique asset class that requires a new and innovative solution; it doesn’t neatly fit into the existing policy frameworks.”

Read more: Why the Future of Blockchain Payments Could Stay Narrow

Block’s campaign messaging relies heavily on embodied experience rather than ideological persuasion. Lopez said the educational barrier diminishes once people see the payment flow in real time. “When we showcase the product of how easy and seamless it is for you to actually pay with bitcoin on your phone, like scan a QR code and it’s instant, that is also a huge unlock for them to feel it themselves in the tangible utility.”

The larger conceptual reframing at play is that bitcoin’s evolution has moved beyond store-of-value narratives and requires regulatory recognition of its expanded function set.

Block’s five-year outlook envisions bitcoin payments not merely as an alternative but a parallel network that competes on efficiency, not ideology. At maturity, Lopez said, it could represent “a totally alternative payment rail where merchants can accept bitcoin on the bitcoin blockchain without having to go through intermediaries and pay these processing fees.”

The downstream economic impact, she said, could ultimately be quantifiable at both the merchant and macroeconomic level: “Over the long term, I think you can probably calculate how much merchants would be getting back into their own pockets and the impact that would have on the economy.”

“We feel like it’s a pivotal moment,” Lopez said. “Bitcoin is everyday money … and now it’s time to make that tangible reality easy.”