Governor Jared Polis of Colorado said that tax transactions with the state can be made with Bitcoin from this year.
The state of Colorado is putting modalities in place to enable tax authorities and other government agencies to accept bitcoin payments. Governor Jared Polis revealed this today during an interview on CoinDesk TV.
The governor said that the state government is working to make it convenient for users to make payments through the support of a wide range of digital currencies just the way that traditional payment processors are supported.
He added that even though the state government is not involved in speculative risks with cryptocurrencies, that it is supporting crypto-based businesses by creating a conducive environment for such businesses.
According to him, the government of Colorado would maintain a transactional layer to avoid speculative risks with cryptocurrencies. This will be facilitated by crypto companies that would act as third-parties between the government and the crypto asset since the state budgets and funding are still in USD.
The state, which is currently hosting and is a sponsor of the 2022 ETHDenver conference, boasts of laws that are favorable to the cryptocurrency and blockchain space.
Polis said that the state is excited about the prospects of blockchain because it is a cheaper way of making transactions. He said that the state is focused on privacy and security. This is why it is increasing its exposure through blockchain for the government, with emphasis on agriculture and energy.
Will This Make BTC A Legal Tender?
While reacting to the interview, J Wilson, a Oklahoma City-based lawyer said,
“If you can pay your taxes with it, it is legal tender ”
Other responders in the crypto community said that they wouldn’t want to pay taxes in BTC, since this would add pressure to the demand on the digital currency since the tax agency would still sell the bitcoins to purchase USD.
Another concern from the community is that addresses used in paying taxes in bitcoin would be tied to the owner’s SSN with the possibility of auditors showing up. One tweet said that it is a guise to take BTC from citizens.
The gov taking btc from its citizens in the guise of cheaper taxes
— Agent007 (@caseypaul_8) February 16, 2022
Irrespective of the views of the community, what is obvious is that policies of a blockchain-friendly state such as Colorado would increase use cases and adoption of digital currencies.