According to PANews, the United States is considering a new proposal to establish a tax-free Digital Economy Zone (DEZ) for Bitcoin, positioning the country as a global leader in the digital economy. The proposal, led by the newly formed USABTC policy group, advocates for a DEZ where Bitcoin can be traded and accumulated without capital gains tax, though taxes would apply upon redemption. USABTC believes this initiative could secure America's financial future by fostering a resilient and innovative economic environment, leveraging Bitcoin's potential while maintaining the dollar's central role.
USABTC argues that direct government purchase of Bitcoin is neither feasible nor politically viable. Instead, it proposes creating a tax-free DEZ where Bitcoin transactions are tax-exempt, with a taxation process upon redemption to ensure revenue generation. Offering tax-free capital gains within this zone could attract investors and promote wealth growth in a regulated environment. The exit tax on converting Bitcoin back to traditional currency could provide a new revenue stream beneficial to both federal and state finances. As part of the plan, USABTC envisions creating a pegged Bitcoin system on Layer2 solutions to ensure efficient and secure transactions.
The proposal outlines a phased approach to implementing the tax-free DEZ in the United States, beginning with a presidential executive order authorizing the use of the Exchange Stabilization Fund (ESF), a tool of the U.S. Treasury established by the Gold Reserve Act of 1934. Subsequent phases would involve drafting legal opinions, legislative work, and extensive public outreach to ensure broad understanding and support. The Internal Revenue Service (IRS) would also play a collaborative role in establishing a robust legal framework and approving the proposed tax structure. The plan also aims to prevent excessive government intervention by incorporating self-custody rights into the law, addressing a significant concern within the cryptocurrency community. According to the current timeline, USABTC plans to begin the implementation phase in 2025, with the DEZ expected to be fully operational by 2026, pending all necessary legislative and regulatory approvals.
