On Thursday, a US congressman introduced a bill in the House of Representatives that would allow Americans to pay federal taxes in bitcoin, which would then be transferred to the US BTC reserve. However, for now it is just an idea that must be voted on in Congress and then signed by Donald Trump.
The bill that bitcoin fans have been waiting for
A bill has appeared in Congress Bitcoin for America Act, proposed by Congressman Warren Davidson, a Republican from Ohio. What provisions does it contain?
In a press release, Davidson said:
By allowing taxpayers to pay federal taxes in bitcoin while placing those proceeds in the Strategic Bitcoin Reserve, the country will benefit from having a tangible asset that appreciates in value over time, unlike the U.S. dollar, which constantly depreciates under inflationary pressures.
The congressman’s proposal will therefore enable the US government to increase the strategic BTC reserve without the need to actively buy bitcoins on the open market. On the one hand, this is bad news for investors, because it means that the country’s authorities will not directly invest in cryptocurrency. On the other hand, the US government is supposed to hodl coins, so the active supply of bitcoin will constantly decrease.
This is not how it was supposed to be!
Recall that US President Donald Trump signed an executive order establishing strategic BTC reserves in March. However, this regulation did not provide for cyclical purchases of BTC. Reserves can be increased, but only through budget-neutral strategies. Additionally, the US government will not sell any BTC obtained through seizure and confiscation of assets.
Of course, investors were disappointed because during the election campaign, Trump seemed to promise something else: cyclical purchases of cryptocurrencies.
The congressman’s new idea is an extension of the idea of a BTC reserve, but it is still not what El Salvador, which buys bitcoins, is doing.
However, Matt Hougan, chief investment officer at the Bitwise investment company, claims that passing the project will be beneficial for BTC:
The strategic reserve “drastically” reduces the likelihood of a government ban on BTC and encourages countries to adopt as other countries follow suit to remain internationally competitive.
