A new bill has been introduced in the U.S. House of Representatives that could allow Americans to pay their federal taxes with Bitcoin. The "Bitcoin For America Act," introduced by Rep. Warren Davidson (R-OH), aims to modernize the U.S. financial system and position the nation as a leader in the digital asset economy.
Under the proposed legislation, taxpayers would be able to transfer Bitcoin (BTC) to the Treasury or approved financial agents designated by the Secretary of the Treasury to satisfy their tax liabilities. The amount credited would be determined by the fair market value of Bitcoin at the time of transfer, similar to how foreign currency payments are currently handled. A key feature of the bill is that taxpayers would not recognize capital gains on the Bitcoin used for tax payments.
All Bitcoin received through tax payments would be deposited into a newly created Strategic Bitcoin Reserve (SBR). According to Davidson, this reserve would provide the nation with a tangible asset that appreciates over time, unlike the U.S. dollar, which is susceptible to inflation. The bill stipulates that Bitcoin deposited into the reserve be held for at least 20 years, with limited dispositions allowed only after that period. This measure is intended to ensure the assets are preserved for future generations. The bill would allow no more than 5% of the reserve to be sold in a year.
The "Bitcoin For America Act" also empowers the Treasury to establish robust custody measures for the Strategic Bitcoin Reserve. These measures include cold storage, multi-signature wallets, and geographically distributed storage facilities. The Treasury Secretary would also be authorized to work with regulated banks to receive, store, convert, and send Bitcoin as needed.
Davidson argues that Bitcoin's decentralized and permissionless system can expand financial access, giving more Americans, including unbanked and underserved populations, the opportunity to participate in the digital economy. He also contends that the measure will help ensure the U.S. remains competitive in the evolving landscape of digital assets. According to Davidson, the initiative is meant to modernize U.S. financial systems and embrace technology already used by millions of Americans.
The Bitcoin Policy Institute (BPI) has expressed support for the bill, releasing a model showing how tax payments in Bitcoin could help grow a national Bitcoin reserve. They called it a "market-driven, democratic approach" to building a government-backed Bitcoin reserve.
As of today, the U.S. holds 198,012 BTC, worth around $17 billion. Earlier this year, President Donald Trump established a separate U.S. Strategic Bitcoin Reserve by executive order to hold Bitcoin seized through criminal and civil forfeiture proceedings, rather than selling it at auction.
The "Bitcoin for America Act" represents a significant step toward integrating digital assets into the U.S. financial system. By allowing federal tax payments in Bitcoin and establishing a Strategic Bitcoin Reserve, the bill could have far-reaching implications for the U.S. economy and its position in the global digital asset landscape.
