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Thursday Nov 20 2025 19:50
2 min
In a bold move towards cryptocurrency adoption, a US lawmaker has introduced a bill in the House of Representatives that would allow Americans to pay their federal taxes using Bitcoin. Under the "Bitcoin for America Act" proposed by Representative Warren Davidson, a Republican from Ohio, Bitcoin (BTC) transferred to the US government for tax payments would not be subject to capital gains taxes and would not be recorded as a loss or gain for the taxpayer.
In a press release, Davidson stated, "By allowing taxpayers to pay federal taxes in Bitcoin and having the proceeds placed into the Strategic Bitcoin Reserve, the nation will benefit by having a tangible asset that appreciates over time, unlike the US dollar, which has steadily lost value under inflationary pressures."
The proposal aims to enable the US government to grow a strategic BTC reserve without having to purchase Bitcoin on the open market, minimizing the positive impact on BTC's price that active purchases would have.
While former US President Donald Trump signed an executive order establishing a strategic BTC reserve in March, the order did not stipulate recurring BTC buys and required that all future additions to the reserve would be financed through budget-neutral strategies.
The main provision in the executive order was that the US government would not sell any of the BTC it acquired through asset seizure and forfeiture. The price of BTC fell by 6% immediately after the order was signed, reflecting the disappointment among Bitcoiners, who expected the strategic reserve to grow through recurring market buys.
Journalist and Bitcoin advocate Lola Leetz argued that funding the BTC reserve through forfeited assets creates "perverse" incentives for the government to seize BTC to grow the reserve. "Civil asset forfeiture should be reformed, not celebrated. If you are cheering this on, you should be ashamed of yourself," Leetz said.
Matt Hougan, chief investment officer at investment company Bitwise, offered an opposing view, stating the order was a net positive for BTC. Hougan said the strategic reserve "dramatically" lowers the probability of a government BTC ban and encourages nation-state adoption, as other countries follow suit to remain competitive on the global stage.
Magazine: US risks being ‘front run’ on Bitcoin reserve by other nations: Samson Mow
Risk Warning: This article is provided for informational purposes only and does not constitute investment advice, investment research, or a recommendation to trade. The views expressed are those of the author and do not necessarily reflect the position of Markets.com. When considering shares, indices, forex (foreign exchange), and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and may not be suitable for all investors. Leveraged products can result in capital loss. Past performance is not indicative of future results. Before trading, ensure you fully understand the risks involved and consider your investment objectives and level of experience. Cryptocurrency CFD trading restrictions may apply depending on jurisdiction.
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