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Since Bitcoin’s launch in 2009, people have been asking if it will ever be possible to pay your taxes using crypto. Today, cryptocurrency adoption is rising on a global scale, and not just among the money-savvy world of traders and investors. Crypto is being accepted and incorporated into mainstream channels managed by some of the world’s most influential institutions, such as the US government. The digital assets’ real-world utility and increasing popularity are being recognized fast and by the right people. In a groundbreaking move, on Tuesday, 25th of June, Representative Matt Gaetz II introduced legislation enabling Americans to pay their federal income taxes using Bitcoin. If this Bill passes, could it be the decisive decision we’ve been waiting for to see Bitcoin embraced by society at large? Is it the ultimate demonstration of Bitcoin’s value as a fungible currency?
In this article, we explore Matt Gaetz’s proposal, according to which it will soon be possible to pay your taxes using crypto, and what the ripple effects of this move could be.
Bitcoin payments for federal income tax
On Tuesday, 25th of June, Representative Matt Gaetz introduced a bill to amend the Internal Revenue Code of 1986, which would enable Americans to pay their federal income taxes with cryptocurrency. The proposed legislation focuses specifically on Bitcoin and does not yet contemplate the use of other cryptocurrencies for payment, such as stablecoins. The bill also sets out a framework for the United States Treasury to create a system for accepting Bitcoin tax payments, specifying the timing of the payments and ensuring that they are immediately converted to their US dollar equivalent at the time of transaction.
Gaetz said in a statement concerning the bill, “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.” If accepted, it will take a year for the law to become effective, so no immediate changes will be made. But as government officials make their favorable stance on crypto known, especially amid the current election campaign, it is looking likely that crypto payments will become an expected feature of the financial system from 2025.
The benefits of crypto payments
The benefits of crypto payments extend beyond the mere convenience of choosing an alternative payment option at the checkout. Their incorporation into the realm of personal financial management represents a shift towards embracing technological innovation on a global scale. By allowing Americans to pay their federal income taxes with Bitcoin, Rep. Gaetz’s legislation not only acknowledges the growing utility and legitimacy of cryptocurrencies but also helps encourage broader acceptance and integration of digital assets into mainstream financial practices.
By specifying the immediate conversion of Bitcoin payments into dollars, the bill also recognizes and aims to mitigate the volatility currently associated with cryptocurrencies. The additional advantages provided by crypto payments also make them a compelling option for both taxpayers and the US government. Crypto payments offer higher levels of security, transparency, and privacy than FIAT transactions, as they are executed over the blockchain. They could also reduce the costs associated with money transfers for both taxpayers and the government and provide greater financial inclusivity to those who prefer or rely on digital currencies.
Crypto payments with ForumPay
Much like Rep. Gaetz’s proposal, ForumPay’s crypto payment solution converts crypto payments into FIAT currency —such as dollars— at the moment the transaction takes place. This means that the merchants and businesses accepting crypto payments are never affected by the price movements of the crypto market; it is up to the buyer to decide whether or not to make the payment depending on their available funds. Offering the option to pay for goods and services with crypto also sends an attractive message to customers and opens businesses up to new streams of revenue from a forward-thinking customer segment.
Along with the above-mentioned advantages, merchants also benefit from transaction speeds that are as fast as, if not faster than, cards, with incoming funds settled in the currency of their choosing on the next business day. ForumPay’s crypto-to-FIAT payment solution has been designed to integrate seamlessly into any existing online workflow or PoS system, making onboarding fast and straightforward. In fact, merchants working with a mobile-connected device will not need to integrate any new software to start accepting payments, and many popular e-commerce shopping carts already come with our payment gateway pre-installed, such as WooCommerce, Drupal, or Magento.
If you are a business and have yet to start accepting payments in cryptocurrency, book a meeting with one of our crypto payment experts. They’re available to answer all your questions. Alternatively, visit forumpay.com for more information.
