Bitcoin News Today: U.S. Builds Digital Gold Reserve with Bitcoin Tax Plan

The U.S. House of Representatives has taken a bold step into the digital asset era with the introduction of the Bitcoin for America Act by Rep. Warren Davidson (R-OH), a proposal that would allow Americans to pay federal taxes in Bitcoin and channel those funds into a Strategic Bitcoin Reserve (SBR). The bill, unveiled on Nov. 20, aims to modernize the nation's financial infrastructure while positioning the U.S. as a leader in the global digital asset race.

Under the proposed legislation, taxpayers would be able to settle federal liabilities using Bitcoin without triggering capital gains taxes, with the coins deposited directly into the SBR. The SBR, established via an executive order in March, is designed to hold government-acquired Bitcoin-primarily from seized assets-and diversify the U.S. financial portfolio into a non-inflationary asset. "By allowing taxpayers to pay federal taxes in Bitcoin and having the proceeds placed into the Strategic Bitcoin Reserve, the nation will benefit by having a tangible asset that appreciates in value over time-unlike the U.S. dollar, which has steadily lost value under inflationary pressures," Davidson stated in a press release.

The bill's economic rationale hinges on Bitcoin's fixed supply of 21 million coins, which creates scarcity and a hedge against long-term inflation. Modeling by the Bitcoin Policy Institute suggests that if 1% of federal taxes were paid in Bitcoin annually from 2025 to 2045, the SBR could accumulate over 4.3 million BTC, potentially worth $13 trillion at a terminal price of $3.25 million per coin. This approach would avoid direct Treasury purchases of Bitcoin, instead relying on voluntary contributions from taxpayers. The BPI's analysis also highlights a $14 trillion cumulative economic benefit over two decades under similar adoption rates.

Critics, however, have raised concerns about volatility and operational complexity. Bitcoin's recent price decline of nearly 30% from its August peak to $88,769 has underscored the risks of holding a highly volatile asset as part of the national balance sheet. The bill's proponents counter that the SBR mirrors sovereign gold reserves, emphasizing long-term strategic value over short-term market fluctuations.

The proposal builds on earlier attempts to expand the SBR. A bill introduced by Sen. Cynthia Lummis (R-WY) in 2024 aimed to allocate $80 billion in Bitcoin purchases via re-rated Federal Reserve gold certificates, while Rep. Byron Donalds (R-FL) proposed budget-neutral acquisitions. Davidson's measure, however, introduces a market-driven model by incentivizing individual participation.

The SBR's current holdings-estimated at 200,000 BTC from seized assets-could grow significantly if the bill passes. The Treasury would oversee custody operations, including cold storage and multi-signature wallets, ensuring the reserve is preserved for at least 20 years.

Global competition in digital assets is a key motivator. China, Russia, and emerging economies are actively acquiring Bitcoin, prompting Davidson to argue that the U.S. risks falling behind unless it adopts a similar strategy according to recent analysis. The bill's proponents also highlight Bitcoin's potential to expand financial access, particularly for unbanked Americans, by enabling tax payments through a decentralized system.

The proposal arrives amid heightened scrutiny of digital asset treasuries, exemplified by the struggles of companies like MicroStrategy (MSTR), which has seen its stock plummet nearly 60% amid crypto market volatility. While the U.S. government's SBR is funded through seized assets, the bill's market-driven approach could mitigate concerns about taxpayer-funded Bitcoin purchases.

As the debate unfolds, the Bitcoin for America Act represents a pivotal moment in the U.S. approach to digital assets, blending economic innovation with strategic competition in a rapidly evolving global landscape.