The bitcoin price has rebounded from a low of $32,000 in January, rising back above $40,000, after falling dramatically from a record of nearly $70,000 per bitcoin late last year.
Representatives in the House have reintroduced a bill that would exclude consumers from paying taxes on bitcoin and crypto transfers under $200, which one congressman called "an important step forward."
In a statement, Congressman David Schweikert (R-Ariz.) said:
"Virtual money is changing our lives, and the US has to acknowledge this and act to treat virtual currencies appropriately in our tax structure. This legislation is a significant step forward in terms of laying the framework for the digital economy's growth."
The Virtual Currency Tax Fairness Act — a change to the Internal Revenue Service's tax rules — is designed to reduce tax costs for everyday crypto users who must now disclose even the smallest capital gains.
This was revealed this week by crypto-friendly lawmakers Schweikert, Suzan DelBene, Darren Soto, and Tom Emmer, and would apply retrospectively to all qualified transactions from December 31, 2021 if the proposal passes.
Furthermore, Jerry Brito, executive director of cryptocurrency think tank Coin Center, who has lobbied for the bill, stated that not only will the bill level the playing field for digital currencies, but it will also help unleash innovation on applications such as micropayments, which can involve dozens of transactions per minute and are difficult to reconcile with current law.
"While bitcoin and other cryptocurrencies are technologically innovative payment methods, you must now keep track of and disclose every transaction you do with them, whether it's a $10,000 investment trade or a 99-cent song on the internet or a latte at a café," Brito added.
The bitcoin price has surged 300% over the last two years
The price of bitcoin has increased by 300% in the previous two years, while the price of Ethereum has increased even faster, as demand for blockchain-based decentralized banking and collectible non-fungible tokens has skyrocketed.
The second layer bitcoin lightning network, which allows for faster and cheaper bitcoin payments, as well as Tesla billionaire Elon Musk's support for meme-based bitcoin rival dogecoin, have bolstered crypto's payment use-case.