Bitcoin
Congressman presents bill to allow federal tax payments in Bitcoin
Congressman Matt Gaetz (R-Florida) introduced legislation on June 25 that would require the IRS to begin accepting federal tax payments in Bitcoin.
Gaetz emphasized the potential benefits of this “bold step” and said the bill will ensure the U.S. remains at the forefront of technological advancement.
The congressman said:
“My groundbreaking legislation will modernize our tax system by allowing federal income taxes to be paid with Bitcoin. This is a bold step towards a future where digital currencies play a vital role in our financial system.”
Taxes with Bitcoin
The bill proposes that taxpayers could use Bitcoin for federal tax payments, which Gaetz believes would “promote innovation, increase efficiency, and provide more flexibility for American citizens.”
If enacted, the legislation would direct the Treasury Secretary Janet Yellen to develop a plan to accept Bitcoin as a legitimate form of currency for federal tax payments. Yellen has historically been a critic of Bitcoin and has expressed opposition to encryption.
The Deputy highlighted his recent visit to El Salvador, the first country to adopt Bitcoin as legal tender in 2021, as a key influence on his decision to introduce the bill. He said Bitcoin helped improve economic stability and job creation in Central America.
The congressman’s proposal signifies a significant shift in the approach to integrating digital currencies into the mainstream financial system, reflecting a growing recognition of their potential to reshape economic practices.
Gaetz’s proposal follows similar actions by several US states. Colorado became the first to approve crypto payments for taxes in 2022, while Louisiana recently passed legislation protecting the right to self-custody and crypto mining.
Meanwhile, Texas, Utah, New Jersey and Kentucky are making progress toward similar policies.
Broader regulatory efforts
The bill’s introduction comes amid ongoing debates in Congress over how to regulate the growing crypto industry.
The house recently passed FIT21a regulatory framework bill that will grant the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) full oversight of crypto trading.
The bill also aims to establish a clear method for classifying whether a digital asset should be considered a commodity or a security, which is one of the main obstacles to the growth of the industry in the US.
The bill passed the House floor with strong bipartisan support and is expected to receive similar support in the Senate, which has yet to give the legislation the green light.