Coinbase Denies Lobbying Against Bitcoin Tax Exemption

Coinbase executives have denied allegations that the company lobbied against a de minimis tax exemption for small Bitcoin transactions, with CEO Brian Armstrong calling the claims “totally false.” The denial comes as Bitcoin network fees sit at just 1 sat/vB, undercutting the reported claim that “no one is using BTC as money.”

Three Capitol Hill Sources Sparked the Firestorm

The controversy erupted on March 11 when Marty Bent, managing partner at Ten31 and host of the TFTC podcast, published allegations that Coinbase lobbyists had been telling lawmakers a Bitcoin de minimis tax exemption was unnecessary. Bent cited “three independent sources on Capitol Hill” verified “over the last few weeks.”

According to Bent, Coinbase representatives allegedly told legislators that “no one is using BTC as money” and that such a tax change would be “dead on arrival.” He further claimed the company wanted the exemption to apply only to regulated, dollar-pegged stablecoins like USDC.

Coinbase Chief Policy Officer Faryar Shirzad responded directly on X, calling it a “total lie.” He wrote: “We have never and will never lobby against Bitcoin. Ever.”

Armstrong weighed in: “Not sure where you’re getting this misinformation, but it’s totally false. I’ve spent a bunch of time lobbying for Bitcoin’s de minimis tax exemption, and will continue doing so. It’s obviously the right thing.”

Chief Legal Officer Paul Grewal added: “I’m not walking anything back. It’s a lie. We’ve never lobbied against BTC.” VP of US Policy Kara Calvert called the claims “categorically false.”

Jack Dorsey, whose company Block co-signed the Bitcoin Policy Institute’s letter urging Congress to include Bitcoin in de minimis relief, pressed Armstrong publicly.

hope this is true for de minimis as well. @brian_armstrong? https://t.co/DfPxSkF7fy

— jack (@jack) March 11, 2026

Source: @jack on X

Armstrong replied with a single word: “Yep.”

$1.35 Billion in Stablecoin Revenue Fuels Skepticism

The allegations carry weight because of Coinbase’s financial relationship with USDC. The exchange generated $1.35 billion in stablecoin revenue in 2025, a 48% year-over-year increase accounting for roughly 19% of total revenue. That income derives primarily from interest earned on U.S. Treasuries held in the USDC reserve pool.

If a de minimis exemption applied only to stablecoins, USDC adoption for everyday payments could accelerate, potentially boosting Coinbase’s bottom line. Bloomberg Intelligence analysts projected that following the passage of the GENIUS Act in July 2025, Coinbase’s stablecoin revenue could surge up to 7x as USDC expands into mainstream payments.

A Bitcoin-inclusive exemption would give consumers a reason to spend BTC directly, reducing reliance on stablecoin payment rails.

CLARITY Act Negotiations May Exclude Bitcoin Regardless

Independent of the Coinbase allegations, there is a documented push on Capitol Hill to limit de minimis relief to stablecoins. Conner Brown, head of strategy at the Bitcoin Policy Institute, confirmed: “Over the past three months, there’s been a strong shift on the Hill to limiting the de minimis exemption to stablecoins only.”

The Bitcoin Policy Institute sent a formal letter to Senate Finance Committee Chairman Michael Crapo and House Ways and Means Chairman Jason Smith on January 12. Co-signed by Block, Crypto Council for Innovation, MoonPay, and River, it urged Congress to extend de minimis relief to network tokens with a $25 billion market cap threshold.

The BPI proposal calls for a $600 per-transaction limit with a $20,000 annual aggregate cap per taxpayer. It argues that limiting relief to stablecoins alone “would undercut the central reason for enacting such a rule: making digital asset payment activity on open networks administratively feasible.”

Senator Cynthia Lummis has separately introduced legislation proposing a $300 per-transaction threshold with a $5,000 annual cap. The Congressional Joint Committee on Taxation estimates the bill would generate approximately $600 million in net revenue over the 2025-2034 budget window.

Bitcoin’s Fee Market Contradicts “No One Uses BTC as Money”

The alleged claim that “no one is using BTC as money” clashes with current network conditions. Bitcoin transaction fees currently sit at 0.1 to 1 sat/vB across all priority tiers, translating to $0.01 to $0.10 per transaction.

These are among the lowest fee levels since the 2024 halving. A Bitcoin payment for a cup of coffee would cost roughly a penny in network fees, well below the 1.5-3% credit card processing fees merchants typically pay.

Outlook: De Minimis Relief Hinges on CLARITY Act Vote

The fate of Bitcoin’s de minimis exemption rests with the CLARITY Act negotiations in Congress. The current draft does not include a Bitcoin de minimis provision, reserving tax relief exclusively for stablecoins meeting GENIUS Act compliance requirements.

Bitcoin traded at $71,631 at press time. Spot Bitcoin ETFs absorbed $115 million in the most recent session, while the network’s hashrate holds above 923 EH/s with mining difficulty at 145 trillion. The next difficulty adjustment is projected at block 941,471.

Whether or not Coinbase actively worked against Bitcoin’s inclusion, the legislative outcome may arrive at the same destination: a stablecoin-only exemption that leaves Bitcoin transactions taxable. The BPI letter and Lummis bill represent the strongest active pushes to prevent that outcome.

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making any investment decisions.