Supporters say accepting BTC for taxes could help the US compete globally
A new proposal in Congress aims to make Bitcoin an option for paying federal taxes, adding fresh momentum to the debate over how cryptocurrency should fit into US financial policy. The bill, introduced by Representative Warren Davidson of Ohio, would let taxpayers submit BTC directly to the government. Those payments would then be placed into a strategic Bitcoin reserve created earlier this year.
Davidson’s plan would give taxpayers a major incentive by exempting these transactions from capital gains taxes. That means sending Bitcoin to the IRS would not count as a taxable gain or loss, a key concern for people who use crypto in everyday transactions. In a statement, Davidson said the move would help the US hold an asset that can potentially grow in value, rather than rely only on cash reserves that weaken under inflation.
The idea supports the strategic Bitcoin reserve established by an executive order from President Donald Trump in March. That order set the foundation for the government to build a BTC stockpile but required that future additions be budget-neutral. It also included a rule that Bitcoin obtained through seizures or forfeitures could not be sold, signaling a long-term commitment rather than short-term trading.
Some Bitcoin supporters were frustrated after the order was signed because it did not require regular purchases from the open market. The price of BTC dropped shortly afterward, reflecting concerns that the reserve would not expand in the way many had hoped. Critics also warned that relying on seized assets could create unhealthy incentives for law enforcement.
Journalist and Bitcoin advocate Lola Leetz argued that this approach highlights deeper problems with civil asset forfeiture. She said the policy should be reformed, not used as a tool to grow government crypto holdings. Others have taken a more optimistic view. Matt Hougan, chief investment officer at Bitwise, said the strategic reserve strengthens the long-term outlook for Bitcoin by reducing the risk of a federal crackdown.
The proposal has yet to advance, but it marks another step in the ongoing debate over how crypto should integrate with federal finance.
