Proceeds from Bitcoin tax payments would be deposited into a proposed Strategic Bitcoin Reserve to diversify national wealth and hedge against inflation and fiat devaluation.

The proposal sits within the jurisdiction of the House Financial Services Committee and its Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence.

A new bill, the Bitcoin for America Act, introduced in the U.S. House by Rep. Warren Davidson, would allow taxpayers to pay federal taxes with Bitcoin.

Bitcoin’s proponents argue its decentralized nature helps shield against inflation and external monetary policy influences, a point echoed by the bill’s supporters.

The bill envisions the Strategic Bitcoin Reserve as part of the presidential establishment and frames it as a countermeasure to fiat currency volatility in a digital economy.

Davidson contends Bitcoin can serve as a tangible asset with potential to appreciate over time, in contrast to the dollar’s inflationary pressures.

Context shows El Salvador previously allowed Bitcoin tax payments but later reversed the rule; in the U.S., some states and cities accept crypto for taxes, but federal taxes are still payable in dollars.