U.S. Lawmaker Pushes Bill to Let Americans Pay Taxes in Bitcoin

The structure of the bill contemplates a taxing regime under which, if enacted, a taxpayer would be allowed to pay tax in Bitcoin to the Treasury or its agent instead of making a cash tax payment. Receipt of the BTC would satisfy the taxpayer's obligation, and the federal government would accumulate the transferred Bitcoin in the Strategic Bitcoin Reserve rather than liquidating it.

Proponents point to several key rationales. First, the fact that there is a fixed supply of Bitcoin, capped at 21 million coins, provides a hedge against inflation and currency debasement. Such scarcity is invoked in the legislation as one that ought to benefit long-term appreciation of the asset. Second, the reserve aims to diversify sovereign holdings away from fiat liabilities and traditional debt issuance. The bill claims this diversification could strengthen national resilience. Third, integrating Bitcoin into federal payments places the U.S. in a position of leadership in digital-asset innovation similar to other countries that reportedly study government-scale Bitcoin accumulation.

Nevertheless, the proposal enters uncertain regulatory and practical terrain. Questions linger around custodial safeguards, volatility risk, accounting treatment, and how Bitcoin holdings would interact with broader monetary and fiscal policy. Critics say that Bitcoin, though it's positioned as a narrative of "digital gold," may not play the role of a conventional strategic reserve asset given its extreme price swings and still‐limited utility as a reliable settlement medium in times of crisis.

The geopolitical aspect of the bill is also worthy of note. The measure explicitly mentions other major economies, including China and Russia, as having already embarked on accumulating Bitcoin into sovereign portfolios. By positioning the U.S. to capture a share of this digital-asset game, Davidson argues, the country avoids falling behind in global financial competition.

From an implementation perspective, the bill would charge the Treasury Secretary with designing custody standards, likely to include things like cold-storage multi-signature wallets and geographically redundant holdings in order to manage both cyber and counter-party risk. It also specifies that the deposited Bitcoin needs to be held for the long term, rather than as a budget tool for near-term expenditure.

The industry's reaction has been cautiously optimistic. Digital-asset advocates see this as a watershed moment for the mainstreaming of cryptocurrency into public finance.

At the same time, significant hurdles remain. Congressional opponents are likely to spotlight Bitcoin's volatility, regulatory gaps, potential accounting complications under federal budget law and how this interacts with the Internal Revenue Service treatment of crypto payments and capital‐gains tax. The bill addresses one of these, stipulating that no capital gains would be recognized when perpetrators transfer Bitcoin to satisfy tax, but second-order issues around valuation, refundability and crypto-market transparency persist.

A sovereign Bitcoin reserve might not play quite the same crisis-buffering role as more traditional reserves such as gold, foreign-exchange holdings or strategic petroleum stocks. These are assets that can be mobilized particularly quickly in an emergency and are widely accepted; Bitcoin's settlement network and regulatory framework are still evolving and may not yet meet those national-security standards.

If passed, the bill could remake how the U.S. government thinks about tax collection, reserve management and digital-asset policy. Government acceptance of Bitcoin directly as tax payment would validate the asset class and tight loop it into sovereign fiscal flows.