The Cato Institute Calls on the US Congress to Repeal Bitcoin Capital Gains Tax to Promote Currency Competition

April 16 — A report from the Cato Institute, a U.S. think tank, argues the federal government should eliminate capital gains taxes on Bitcoin and other cryptocurrencies to ease their use as daily currency and foster fair competition among currencies, per Cointelegraph. Current U.S. tax law classifies Bitcoin as a capital asset, so using crypto to pay for goods or services triggers a taxable event requiring capital gains calculation and reporting. Even small daily transactions can generate voluminous tax documentation, significantly increasing compliance burdens. The Cato Institute aims to remove these policy barriers to crypto’s use as a currency. “Congress should simplify tax laws so ordinary Americans can easily meet their obligations,” said Cato researcher Anthony. “This would greatly ease tax season pressure and create a more competitive economic environment.” A 2025 survey found 39% of U.S. crypto holders have used crypto to purchase goods and services, while roughly 11,000 merchants worldwide currently accept Bitcoin payments.