Rep. Warren Davidson today introduced legislation that would allow Americans to pay federal taxes in Bitcoin without incurring capital gains liability on the digital asset.

The proposed bill, the Bitcoin For America Act, also supports Congressional work on the Strategic Bitcoin Reserve. It seeks to place all Bitcoin received from federal tax payments into the Strategic Bitcoin Reserve.

The measure addresses a key barrier that has prevented widespread use of Bitcoin for government payments. Under current tax law, using Bitcoin to pay taxes would typically trigger capital gains taxes on any appreciation in the asset’s value.

Davidson emphasized that Bitcoin’s scarcity and long-term value appreciation could enhance US financial security while expanding payment options for Americans. The bill positions Bitcoin as a tool to counter inflation, diversify national assets, and maintain the nation’s leadership as global powers increase their own Bitcoin holdings.