A bill introduced in November 2025 would allow taxpayers to pay federal taxes in Bitcoin — and every sat received would go directly into a new Strategic Bitcoin Reserve (SBR). The proposal removes capital gains taxes when using BTC for federal payments, and requires the Treasury to store the coins with strong, long-term security measures. The effort follows an executive order issued earlier in March 2025 that first opened the door to federal Bitcoin reserves.
A shift toward long-term federal Bitcoin accumulation
The “Bitcoin for America Act,” introduced by Representative Warren Davidson, sets a clear rule: the market value of Bitcoin at the moment of payment would count toward a taxpayer’s federal obligations, and no capital gains tax would be applied. In simple terms, people could pay their taxes with BTC without triggering extra tax liabilities — something long considered a barrier to using crypto in everyday transactions.
To protect the funds, the bill requires the Treasury to implement strict custody standards such as cold storage, multisignature setups and geographically distributed keys. Any Bitcoin deposited into the SBR would have to remain untouched for at least 20 years, aside from a few narrow exceptions.
The proposal also aims to put into law practices that began with the March executive order, which created a federal Bitcoin reserve fueled by seized assets and prohibited any sales. The market’s reaction to that order was cautious but generally stable.
Momentum is also building in the Senate. Cynthia Lummis has introduced related bills — S.4912 and S.954 — that even contemplate direct BTC purchases by the Treasury and potential Federal Reserve involvement to neutralize costs. States like Texas are exploring their own approaches, adding a patchwork of local initiatives to the national debate.
According to a model published by organizations supporting the bill, if just 1% of federal taxes were paid in Bitcoin from 2025 to 2030, the reserve could grow to more than 2.6 million BTC — valued around $230 billion at the model’s assumed prices. Over a 20-year horizon, the projection climbs to 4.3 million BTC, though the final dollar value depends heavily on future price scenarios.
Supporters see this as a market-driven, voluntary and democratic model for national BTC accumulation. Conner Brown of the Bitcoin Policy Institute described it as exactly that. But critics raise red flags: journalist Lola Leetz warned the plan could encourage more asset forfeitures to feed the reserve. Others, like Matt Hougan, argue that a federal Bitcoin reserve would actually lower the risk of bans and might encourage adoption by other governments.
In the end, the proposal reshapes how taxes, public finance and digital assets might interact in the U.S. Its success will hinge on custody execution, tax clarity and whether Congress ultimately embraces Bitcoin as part of long-term national strategy.
