The newly-formed policy group of the United States proposed creating a digital economic zone tax free for Bitcoin (DEZ).
USABTC, the policy group that is driving this proposal, aims to establish a free-trade zone for Bitcoin trading and accumulation without any taxation on capital gains. This initiative is intended to help boost the economy of the country.
The group website claims that the US is in need of “new solutions” for the national debt crisis, and Bitcoin has been hailed by the group as an “opportunity,” which could “securize the financial future” of America and her citizens.
The proposal does not intend to weaken the US Dollar, but instead strengthen it.
The phased approach
This proposal proposes a DEZ as an alternative to buying Bitcoin outright. This economic zone would permit tax-free Bitcoin transaction, in an effort to attract investors.
In the proposal, it is proposed to create a USBTC token that would function as a Bitcoin pegged system.
The group highlighted Stacks as a layer two blockchain that could be used for the Bitcoin Network.
Installing an exit tax when converting Bitcoins into fiat currencies would create a tax redemption policy, and thereby a revenue stream for the government.
The redemption process will be completely direct, and there won’t be any third party exchanges.
Smart contracts would allow tax payments to be transferred directly into a wallet controlled by the taxpayer.
USABTC intends to deploy DEA in phases. The first phase is expected to be launched in 2025.
The President will issue a directive to allow the Exchange Stabilisation Fund to be used to purchase and trade Bitcoin.
ESF (Emergency Reserve Fund) is a reserve fund created by Congress under the Gold Reserve Act in 1934. It is used to stabilize the U.S. Dollar during times of economic distress.
The next step would be to draft legal opinions for Bitcoin to fall under the Gold Reserve Act of 1935, initiate legislative efforts to create the DEZ and collaborate with the IRS on the framework of special tax treatment, tax-free gains and the DEZ.
In the next phase, there will be plans for public education campaigns, as well as “the necessary technology infrastructure” such a blockchain integration, secure wallets, smart contracts and other technologies.
If all approvals from regulatory bodies are received, the group anticipates that DEZ will be operating by 2026.
This proposal is amidst recent activity in the United States surrounding Bitcoin and cryptocurrency.
The Bitcoin boom in the US
The Boosting Innovative Technology, Competitiveness and Innovation through Optimised Investment Nationwide Act (BITCOIN), introduced by Senator Cynthia Lummis last week, aims to create a Bitcoin-based reserve fund.
The bill, however, differs from the USABTC proposal in that it calls for the establishment of a decentralized network of Bitcoin storage facilities, which would hold up to 1,000,000 Bitcoins, acquired by government agencies over a period of at least twenty years.
Donald Trump, a presidential candidate who attended the Bitcoin Nashville Conference, also suggested using Bitcoins to reduce the US Debt. Trump Jr. has teased a forthcoming announcement about cryptocurrencies that he says will “shake” the market.
The post US Policy Group Proposes Tax-Free Bitcoin Economic Zone: Is It Possible? This post may change as new information unfolds
