Core Insights - The current U.S. tax regulations create barriers for everyday cryptocurrency use, as transactions trigger capital-gains paperwork, leading consumers to prefer stablecoins for practical spending [1][13][14] - Despite a downturn in crypto markets, major players are focusing on developing infrastructure for real-world crypto payments, indicating a shift towards practical applications rather than speculative trading [5][6][8] Market Sentiment - A year ago, Bitcoin was valued over $90,000, creating a sense of optimism among traders and blockchain enthusiasts [2] - This year, the mood is more subdued due to market volatility erasing nearly all gains, affecting those who invested at peak prices [4] Infrastructure Development - Companies like Kraken, Block, and Klarna are launching new payment tools, such as a Mastercard debit app and Bitcoin payment capabilities for millions of merchants, to enhance crypto payment infrastructure [6][7] - The integration of crypto payments into e-commerce platforms has significantly improved, making it easier for retailers to accept cryptocurrencies [9][12] Retailer Perspective - Most retailers view crypto as a long-tail enhancement rather than a primary revenue driver, treating it similarly to early PayPal or Klarna offerings [11] - Retailers do not expect crypto spending to dominate their sales but see it as an incremental option for specific customer segments [11] Regulatory Challenges - The primary challenge for crypto payments lies in regulatory issues, as spending cryptocurrencies is treated as a taxable event under current IRS rules, complicating low-value transactions [13][14] - The friction in crypto payments is not in the checkout process but in the post-purchase tax documentation, which hinders everyday use [15] Stablecoin Adoption - Stablecoins are gaining traction as they function more like digital cash, avoiding capital gains complexities and making them more intuitive for merchants [16] - This Black Friday, stablecoins are expected to dominate crypto transactions across various sectors, including electronics and fashion, rather than Bitcoin [16]

The wealthy often avoid earned income, which means they escape payroll taxes entirely and ordinary income rates under the income tax. - Getty Images In a recent column, I discussed how the federal tax code has created two separate societies: working Americans who earn wages and pay taxes to support government programs and the ultrawealthy who have removed themselves from the tax system almost entirely. The wealthy often avoid earned income, which means they escape payroll taxes entirely and ordinary inco ...