[Lon7]

Yes. The same applies to when you trade bitcoin for other cryptocurrencies. Although it is technically one transaction, if you want to be safe you should treat it as two separate transactions:

1. Selling the bitcoin for USD (this is taxable)

2. Using the USD to buy whatever it is you want.

[supercanuck]

That is going to be really challenging for users to use this as a currency in the USA.