Harsh US tax rules hinder Bitcoin's use as a currency

U.S. Bitcoin users are struggling under harsh tax regulations, BeInCrypto reported. Nicholas Anthony, a researcher at the Cato Institute, pointed out that current capital gains tax rules have effectively paralyzed Bitcoin's function as a currency. This is because every time a user makes a payment with Bitcoin, they must record and report the acquisition date, usage date, original cost, and any profit or loss to the IRS. According to the report, a user who buys coffee with Bitcoin daily would need to file over 100 pages of tax documents at the end of the year. The report criticized the tax code for incentivizing long-term holding and discouraging its use as a currency, emphasizing the need for legal improvements such as raising the small-transaction exemption threshold or abolishing capital gains tax on virtual assets.