Rep. Matt Gaetz has proposed a bill to enable federal income tax payments using Bitcoin (CRYPTO:BTC), inspired by El Salvador's embrace of the cryptocurrency.
The bill mandates the U.S. Secretary of the Treasury to develop a method for accepting Bitcoin payments, aiming to modernize the tax system, promote innovation, and increase efficiency.
Bitcoin received for tax payments would be converted to U.S. dollars immediately to mitigate volatility risks.
Despite similar state-level experiments, integrating Bitcoin into the federal tax system presents challenges, such as instant conversion to fiat and securing taxpayer privacy.
El Salvador's mixed results with Bitcoin adoption highlight potential difficulties, but the U.S. might see different outcomes due to its larger economy and greater access to crypto.
If successful, this bill could significantly boost the legitimacy of cryptocurrencies.