USABTC, a new policy group, has proposed a Bitcoin Digital Economic Zone (DEZ) that will allow U.S. citizens to trade and accumulate bitcoin free of capital gains taxes. According to the group, the DEZ would position the U.S. as a leader in the crypto industry and safeguard the economic interests of the country’s citizens.
The Bitcoin DEZ would be possible through the Gold Reserve Act of 1934, which transferred ownership of gold and the assets’ certificates to the United States Treasury. Through that Act, the federal government could add bitcoin to the Exchange Stabilization Fund, which currently has three other classes of assets: the U.S. dollar, foreign currencies, and Special Drawing Rights.
The DEZ would then ease the stress of the national debt and the economic struggles of everyday Americans while providing for a resilient and balanced financial ecosystem. There would be two phases — coinciding with the years 2025 and 2026 — where the President would issue an executive order and work with Congress and the IRS to create the Zone.
Although citizens trading bitcoin in the DEZ would not be subject to capital gains tax, there would be an exit tax when they convert their bitcoin into fiat currency. The revenue generated from this exit tax would go into state-controlled accounts using the Bitcoin network’s security, a transparent process made possible through blockchain technology.
This proposal from the new policy group underscores the changing tide in the United States. Attitudes are shifting towards crypto, with various politicians revealing that they hold digital assets and two candidates for presidency openly expressing optimism towards the nascent technology. Rarity Sniper has reached out to USABTC for comment on the proposal and will update this article if it responds.
Bitcoin Makes Waves in 2024
Bitcoin is the king of cryptocurrencies, dwarfing other coins in market capitalization and mainstream influence. Over the past week, it hit a 174-week high in market dominance, climbing to a market share of 57%, a percentage not seen since April 2021. And more and more, the culture seems to be accepting bitcoin as a player in traditional financial markets.
For instance, three months ago, filings to the U.S. Securities and Exchange Commission (SEC) revealed that 600 firms have exposure to Bitcoin Exchange Traded Funds (ETF). According to the report, investment advisory firms made up 60% of new Spot ETF buyers, while hedge funds made up another 25%. The news had Bitcoin Bulls buzzing.
Presidential candidate Donald Trump has taken notice of Bitcoin’s new stature as well. He recently spoke at a Bitcoin conference in Nashville, saying, if elected, he would fire SEC chair Gary Gensler on Day 1 and create a strategic bitcoin reserve. During the conference, BTC’s price reached $70,000 amidst all the positive news.
Trump has not been shy in trying to capitalize on the growing fame of Bitcoin either. Last week, one of his companies released a set of “Bitcoin Sneakers” with the words “Trump Crypto President” emblazoned on their sides along with a prominent Bitcoin logo. The orange high tops version sold out in minutes, with some enterprising individuals selling them on eBay for higher prices.
Now, with news of this proposal for a tax-free Bitcoin Digital Economic Zone, it appears momentum is securely behind the world’s No. 1 cryptocurrency. What more will we see in 2024? Time will tell, but surely it will be interesting.
To read more on Bitcoin, check out our article: El Salvador: What’s Happening in ‘Bitcoin Country?’