Coinbase Denies Lobbying Against Bitcoin Tax Relief Amidst Dorsey’s Scrutiny
Coinbase Chief Policy Officer Faryar Shirzad has vehemently denied allegations that the cryptocurrency exchange is actively lobbying against a proposed de minimis tax exemption for Bitcoin. The denial comes after reports surfaced suggesting Coinbase was advising lawmakers that the exemption is unnecessary, arguing Bitcoin isn’t widely used as a medium of exchange.
Responding to Bitcoin podcaster Marty Bent on X (formerly Twitter), Shirzad stated, “This is a total lie @MartyBent. We have never and will never lobby against Bitcoin. Ever.” Coinbase CEO Brian Armstrong subsequently echoed this denial, calling the claims “totally false.”
The Proposed Tax Exemption and Industry Debate
The proposed de minimis tax exemption, championed by Senator Cynthia Lummis (R-WY), would exempt Bitcoin transactions under $300 with an annual cap of $5,000 from capital gains taxes and IRS reporting requirements. Supporters argue this is crucial for fostering the adoption of Bitcoin for everyday purchases, removing a significant barrier to its use as currency. Currently, every Bitcoin transaction is considered a taxable event, creating a complex compliance burden.
However, reports indicate a growing trend on Capitol Hill to limit any such exemption to stablecoins only. Bitcoin Policy Institute Managing Director Conner Brown confirmed a “strong shift” towards this approach, warning it would be a “strategic blunder for the U.S.”
Block’s Advocacy and Lightning Network Growth
Block, Inc. – the parent company of Cash App and Square – has been the most vocal corporate advocate for the exemption. In November 2025, Block launched a “Bitcoin is Everyday Money” campaign, coinciding with the rollout of Lightning Network tools allowing Square merchants to accept Bitcoin payments with zero fees through 2027.
Recent data suggests increasing real-world use of Bitcoin via the Lightning Network. According to River Financial, November 2025 saw $1.17 billion in monthly volume across 5.22 million transactions. The average transaction size was $223. A June 2025 report indicated the network had reached roughly 1.5 million users and $1.5 billion in trading volume. Block’s own Lightning node achieved a 9.7% yield routing payments and Cash App processed one in four outbound Lightning transactions, experiencing 7x usage growth.
Miles Suter, Block’s Bitcoin product lead, emphasized the company’s vision: “If Bitcoin just becomes digital gold, we failed the mission. Bitcoin payments validate Bitcoin. They make it real. Bitcoin is money.”
Tensions Between Exchanges and Payment Infrastructure Providers
The exchange of claims highlights a growing tension between cryptocurrency exchanges like Coinbase and companies focused on building Bitcoin payment infrastructure, such as Block. While Coinbase appears to prioritize stablecoins, Block is betting on Bitcoin becoming a widely used currency.
Congress continues to debate the proposal as part of broader discussions on digital asset tax reform.