The United States is weighing a major shift in how it approaches the intersection of crypto and taxation. Republican congressman Warren Davidson has introduced the Bitcoin for America Act in the House of Representatives. The proposal would allow Americans to pay federal taxes in bitcoin, which would then be routed to a new strategic U.S. bitcoin reserve.

No capital gains taxes

Under the bill, transferring BTC to a government address would not be considered a taxable event. Taxpayers would therefore avoid calculating capital gains or losses — one of the biggest administrative hurdles in using cryptocurrencies.

Davidson argues that the move would allow the government to build its bitcoin reserve without purchasing coins on the open market. That detail matters: active buying could push bitcoin prices higher, while the proposed system would remain “market neutral.”

Tied to Donald Trump’s executive order

In March, President Donald Trump created a strategic bitcoin reserve through an executive order. Crucially, the order did not envision regular BTC purchases. Any future expansion of the reserve was meant to be financed through “budget-neutral” mechanisms.

It also stipulated that the government would not sell bitcoin seized through criminal or civil proceedings. That provision triggered criticism — and the market reacted quickly. BTC fell roughly six percent after the order was signed, as investors had expected the opposite scenario: steady purchases signaling long-term confidence.

Critics warn of “perverse incentives”

Journalist and bitcoin advocate Lola Leetz argues that funding the reserve primarily through asset forfeiture creates problematic motivations. She says it encourages authorities to seize cryptocurrencies more aggressively.

“Civil asset forfeiture needs reform, not celebration. Anyone who supports this should be ashamed,” Leetz said. She sees Davidson’s proposal as a step in the right direction, removing part of these incentives.

Supporters cite market stability and geopolitics

Matt Hougan, CIO of Bitwise, takes the opposite view, saying the reserve is positive for bitcoin because it drastically lowers the likelihood that the U.S. government would ever ban the digital asset.

He also notes the geopolitical angle: if the U.S. holds a strategic bitcoin reserve, other countries may feel pressure to follow suit to remain competitive globally.

Sources:

https://drive.google.com/file/d/1uQCCCI77jTgLHf-wI0c-iPHjkbz0ZCZi/view?pli=1

https://x.com/davidsacks47/status/1897802280738734236

https://x.com/L0laL33tz/status/1978198719184187466

https://x.com/Matt_Hougan/status/1897807605764141088