Bitcoin Updates: U.S. Bitcoin Reserve Seeks to Offset $38 Trillion Debt and Rising Inflation

The U.S. House of Representatives has made a landmark move to incorporate cryptocurrency into the federal financial framework, as Rep. Warren Davidson (R-Ohio) has put forward the

for America Act of 2025. Supported by the Bitcoin Policy Institute (BPI), this bill would permit Americans to use Bitcoin for federal tax payments without incurring capital gains tax—a first for the nation—and . The proposal seeks to update the country’s financial systems and in digital asset advancement.

If enacted, the law would let taxpayers send Bitcoin straight to the Treasury or designated financial agents to fulfill tax obligations. The Bitcoin’s value would be set at the moment of transfer, with no capital gains applied, mirroring how foreign currency payments are handled

. The Strategic Bitcoin Reserve, which was created by executive order earlier this year, would retain the received Bitcoin for a minimum of 20 years, with only limited withdrawals allowed after that period . Advocates believe this would provide a long-term appreciating asset to help offset inflation’s impact on the U.S. dollar.

Davidson, a prominent supporter of Bitcoin, highlighted the act’s potential to reinforce the country’s financial base. " , the nation gains a tangible asset that could appreciate over time," he said. The bill also proposes strong security protocols for the reserve, including cold storage and multi-signature wallets .

The Bitcoin Policy Institute, a nonpartisan research group, has created a proprietary model forecasting the act’s economic impact. Should 1% of federal tax payments be made in Bitcoin over the next 20 years, the reserve could amass as many as 4.3 million coins, with a projected end value of $13.8 trillion if each Bitcoin reaches $3.25 million

. BPI claims this would serve as a safeguard against the U.S.’s $38 trillion debt and .

Opponents, however, point to the risks associated with Bitcoin’s price swings. While the bill assumes steady adoption and price growth, market volatility could make revenue projections challenging and add unpredictability to federal finances

. Furthermore, the Treasury would need to revamp its infrastructure to process time-stamped price settlements, manage refunds, and screen transactions for sanctions compliance .

This legislation reflects a wider international movement, as countries like China and Russia are reportedly acquiring Bitcoin to diversify their reserves

. By making participation optional, the U.S. seeks to create a more inclusive approach to Bitcoin accumulation, with BPI’s Conner Brown describing it as " ."

As of November 20, 2025,

, a rise from a recent six-month low of $82,000 earlier that week. The Strategic Bitcoin Reserve, which currently holds 326,000 BTC from confiscated assets, is .