Think tank in the United States calls for the abolition of Bitcoin capital gains tax to allow Bitcoin and other cryptocurrencies to compete freely

Recently, the Cato Institute, a U.S. think tank, called on Congress to eliminate the capital gains tax on Bitcoin and other cryptocurrencies, arguing that the current tax system hinders monetary competition and suppresses the practicality of cryptocurrencies as a payment tool.

Cato Institute policy scholar Nicholas Anthony pointed out in a report on Wednesday that the capital gains tax discourages the use of alternative currencies like Bitcoin because it encourages long-term holding and increases the reporting burden on users.

He also mentioned that Bitcoin users are heavily affected by tax season; although Bitcoin transactions are now very convenient, the tax burden makes law-abiding citizens suffer. For example, even a daily coffee purchase can generate nearly a hundred pages of tax filing materials.

Anthony believes the most direct solution is to directly abolish the capital gains tax to create a more competitive market environment; another option is to eliminate the special capital gains tax on cryptocurrency and foreign currency use, thereby reducing government intervention and allowing the market to naturally determine the value of tokens.

He also mentioned the “de minimis” exemption scheme, where users only trigger capital gains tax if they reach a certain threshold. He also warned that requiring users to prove each transaction is for purchasing goods or services to be exempted could “create another compliance nightmare.”

According to a 2025 survey by the U.S. National Cryptocurrency Association, 39% of U.S. cryptocurrency holders have used crypto assets to purchase goods and services.

Meanwhile, academic publishing company Springer Nature used BTC Ma tracking data to find that approximately 11,000 merchants worldwide currently accept Bitcoin payments.

Overall, Anthony believes Congress should simplify tax laws so that ordinary Americans can easily meet compliance requirements. This would not only greatly ease the pressure on Americans during each tax season but also create a more competitive economic environment.

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