US policy group proposes a Bitcoin tax-free zone that it says would put the US administration in the lead as a world digital economy leader. A plan is underway to create a Bitcoin tax-free Digital Economic Zone, DEZ, in which the cryptocurrency would be traded and held tax-free with capital gains, but there would be a tax when it is converted back to traditional currency.
This perspective is taken by the USABTC policy group, a new-fangled organisation that sees this tax-free region as one to cushion the future financial security of Americans. On the same note, the argument is the adoption of tax-free Bitcoin transactions would allow it to lead to a powerful, innovative economy for the USD and its use as the base currency.
Bitcoin has already unsettled governments worldwide to reconsider their approach to money and financial policies. When citing this, USABTC has defined that it is not feasible and politically impossible for the government itself to buy directly from its proposal.
In its place, they want to set up a DEZ in which transactions involving Bitcoin are not taxed, but every conversion of this Bitcoin back into dollars is. He hopes this tack could attract investors, help "people on the ground grow their wealth," and remain safely within the confines of regulation. The tax on converting Bitcoin to dollars could also provide a new source of income for the government.
In the following regard, USABTC will offer a system through which Bitcoin transactions can be secure and efficient by using a layer-2 solution: a further framework on top of the existing Bitcoin network.
It is proposed that DEZ be implemented in the US step-by-step. This should start with an executive order by the President to make ESF, a facility of the US Treasury initially enabled through the Gold Reserve Act of 1934, available.
This would be followed by the preparation of legal opinions, the drafting of laws, and public campaigns to make people understand the idea and be willing to adopt it.
Internal Revenue Service would also be consulted in the formation of a formidable legal framework while approving the proposed tax structure.
USABTC is confident that, if this plan comes to life, the US will take its lead in the digital economy area because such legislation would mitigate the fear of government intervention—as perceived by the crypto-community—by making self-custody, holding their own Bitcoin, a legal right.
If all goes to plan with the USABTC initiative, then the first steps may start in 2025; whereupon, assuming all goes well with the necessary legal and regulatory approvals, this DEZ could be in full swing by 2026.
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