The United States is setting its sights on becoming a global leader in the digital economy, with the newly formed USABTC policy group proposing the creation of a Bitcoin tax-free Digital Economic Zone (DEZ), a haven where Bitcoin can be traded and accumulated without capital gains taxes.
HUGE: Efforts underway to create a Bitcoin Tax Free Zone in the USA. pic.twitter.com/BxbGHrBaxj
— Dennis Porter (@Dennis_Porter_) August 7, 2024
In favor of this view, the USABTC proposal argues that an outright government purchase of Bitcoin would be unfeasible and politically unachievable. Instead, it advocates for creating a DEZ, where Bitcoin transactions can be tax-free. The world of finance has been shaken up by the advent of Bitcoin, challenging policymakers around the globe to rethink traditional financial strategies.
The initiative should bear fruits with the support of regulators
The initiative suggests that offering tax-free capital gains within this zone could attract investors and foster wealth growth within a regulated environment. The exit tax on Bitcoin conversions back to traditional currency could provide a new revenue stream for the government, benefiting both federal and state treasuries, the initiative stated.
Proposal in the US Congress could see #bitcoin #crypto transactions under $200 be EXEMPT from capital gains tax! If passed it will solve one of the biggest pain points hindering retail adoption in the USA. https://t.co/jC43zsl4tK
— Lark Davis (@TheCryptoLark) January 20, 2020
The proposal outlines a phased approach to implementing such a DEZ in the US. The first step would involve the President issuing an executive directive to authorize the use of the Exchange Stabilization Fund (ESF), a tool within the US Treasury originally established by the Gold Reserve Act of 1934. The next steps would include drafting legal opinions, working on new laws, and talking to the public to ensure everyone understands and supports the changes. The IRS would also be a key partner in creating a strong legal foundation and approving the new tax plan.
The timeline is close
A future where the US is at the forefront of the digital economy could be made a reality with this initiative. Not only would it boost America’s digital credentials, but it would also provide a vital safeguard against government overreach — a major worry for many in crypto. By making self-custody a legal right, individuals would have the power to control their digital assets, free from unnecessary government prying.
The flag-off of this plan is set to begin in 2025, with a target completion date of 2026, assuming all necessary boxes from lawmakers and regulators are checked. This would mark a celebrated breakthrough, paving the way for a more full-fleshed and inclusive digital economy in the US.
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