America has launched a new big move! On May 16, a new bill proposed by Republican members of Congress plans to impose a 5% tax on all remittances sent overseas by non-citizens, affecting H-1B, F-1 visa holders, and green card holders. Additionally, the bill requires that any after-tax income from stock options obtained in the U.S. and transferred overseas will also be subject to a 5% tax.
1. Tax policy analysis: Who will be 'precisely targeted'?
According to the information, starting from 2025, non-U.S. citizens (including H-1B, F-1 visa holders, green card holders, and non-resident foreigners) will be required to pay a 5% consumption tax on remittances sent overseas, with exemptions limited to U.S. citizens and nationals who verify their identity through 'qualified remittance service providers.'
Wide coverage: Involves after-tax income from stock option income (such as RSU restricted stock), wage remittances, investment fund transfers, etc.;
Strict execution mechanism: Remittance service providers must withhold taxes and remit them to the Treasury. If they evade taxes, they will bear 'secondary liability,' and there are 'anti-circumvention rules' to prevent the use of U.S. citizenship to avoid taxes;
Economic chain reaction: Taking India as an example, U.S. immigrants remitted over $23 billion to their home country in 2023. After taxation, a single remittance of $1,000 will incur a loss of $50, or force the remitter to bear additional costs.
Critics argue that the policy discriminates against legal immigrants, potentially increasing the use of informal remittance channels and weakening the U.S.'s attractiveness to international technical talent.
2. Impact on U.S. stocks: Tech stocks may be the first to be hit
Rising labor costs: Tech companies in Silicon Valley and elsewhere rely on H-1B visa employees, and if companies need to raise salaries to offset the remittance tax burden, it will directly squeeze profit margins. Tax experts estimate that employer salary costs could increase by 3%-5%;
Multinational corporate profits are affected: Indian executives generally hold RSU stock options, and after taxation, the willingness to allocate overseas assets decreases, which may impact the effectiveness of corporate equity incentives;
Market sentiment volatility: Policy uncertainty may lead to short-term fluctuations in the tech sector, especially in the semiconductor and artificial intelligence fields that rely on foreign employees.
U.S. stock investors should pay attention to companies with a high proportion of domestic labor, or preemptively lay out tracks for automation technology to replace manual labor.
3. Bitcoin's 'unexpected dividend': Outflow of remittance demand
The bill does not cover peer-to-peer cryptocurrency transfers, creating structural opportunities for Bitcoin and Ethereum:
Surge in alternative remittance demand: A 5% tax rate on traditional channels may drive immigrant groups to turn to Bitcoin for cross-border payments. According to World Bank data, the global remittance volume reached $818 billion in 2023. If 10% of the demand shifts to cryptocurrency, it could bring in over $40 billion in incremental funds;
Regulatory arbitrage space: The bill specifies that 'qualified remittance service providers' must cooperate with the Treasury to verify identity, but decentralized wallets (like MetaMask) do not need to report transactions, allowing users to evade tax tracking.
Risk warning: If the U.S. government subsequently includes cryptocurrency in the tax scope, it may trigger short-term selling pressure, but the current bill has established a tone of 'cryptocurrency exemption.'
4. Strategies for cryptocurrency traders: Use options to hedge against volatility
1. Protective put options (hedge against downside risk)
Hold Bitcoin spot while simultaneously buying put options. For example, if the current BTC price is $100,000, buy a put option with a strike price of $98,000 one month from now (premium approximately 5%).
If the policy tightening causes the coin price to drop to $95,000, the options profit can offset some losses; if it rises, only the premium is lost.
2. Straddle arbitrage (bet on rising volatility)
Simultaneously buy call and put options with the same expiration date (same strike price). For example, if the current price of BTC is $100,000, buy a call option with a strike price of $102,000 and a put option with a strike price of $98,000.
If the policy triggers significant price volatility (breaking above $102,000 or below $98,000), unilateral profits can cover bilateral costs.
3. Calendar spreads (capture time value decay)
Sell near-month at-the-money call options and buy far-month out-of-the-money call options. This is suitable for scenarios where a short-term policy downside is expected to release upward momentum in the medium to long term.
In summary, America's new move is a significant event that is bearish for U.S. stocks and bullish for the cryptocurrency sector. The U.S. remittance tax policy will have a short-term impact on the immigrant economy and the tech sector of U.S. stocks, but it creates a 'regulatory arbitrage window' for Bitcoin. Ordinary investors need to be alert to the subsequent evolution of policies and use options tools to balance risks. The high volatility of the cryptocurrency market is both a challenge and provides excess return space for flexible strategies.
