Rep. Matt Gaetz (R-Fla.) introduced a bill Tuesday that would allow Americans to pay their federal income tax in bitcoin.
Gaetz said the radical move would “promote innovation, increase efficiency, and offer more flexibility to American citizens.”
“This is a bold step toward a future where digital currencies play a vital role in our financial system, ensuring that the U.S. remains at the forefront of technological advancement,” he said in a statement.
The congressman cited his recent visit to El Salvador — which in 2021 became the first country to allow bitcoin as a legal currency — as the inspiration for the bill.
Colorado was the first government to approve cryptocurrency payments for taxes in 2022. Utah, New Jersey and Kentucky have also made moves toward approving the payment.
The bill comes as Congress grapples with how to regulate cryptocurrency, a rapidly growing industry that has been marred by fraud and instability.
The House passed a regulation framework bill last month which would allow the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission to fully oversee cryptocurrency trading.
SEC Chair Gary Gensler opposed the House bill, claiming it would undermine his agency’s regulatory power.
“The crypto industry’s record of failures, frauds, and bankruptcies is not because we don’t have rules or because the rules are unclear,” he said last month. “It’s because many players in the crypto industry don’t play by the rules.”
“We should make the policy choice to protect the investing public over facilitating business models of noncompliant firms,” he added.
Though bitcoin was initially founded to be used as a currency, cryptocurrencies have generally been treated as speculative assets due to their extreme instability and limited use cases.
The price of bitcoin has fluctuated wildly this year, rising from about $40,000 in January to more than $70,000 in March. The price briefly fell below $60,000 on Monday.