- J Markezic and M Bacina
Show me the ̶m̶o̶n̶e̶y̶ crypto! Colorado announces it will accept Bitcoin for tax payments
In a recent interview with CNBC, Colorado Governor Jared Polis has signalled Colorado’s intention to accept crypto-assets for payment of state tax obligations. Polis also said that Colorado would be positioning themselves to accept crypto payments for other government fees.
Per Governor Polis:
We expect by this summer, pretty soon, to accept crypto for all of our state tax-related purposes, and then we plan to roll that out across all of state government for things [that] could be as simple as a driver’s license or hunting license.
The primary caveat to this announcement is that Colorado is seeking to only focus on those crypto-assets that are less volatile like Bitcoin. The key reason for this being that the state’s expenses still primarily take the form of U.S. Dollars – a centralised currency.
This is yet another move towards governments becoming increasingly confident in terms of their interaction with crypto-assets. This announcement follows from other U.S. jurisdictions who have developed their own cryptocurrency. In August 2021, the city of Miami in Florida launched MiamiCoin in partnership with crypto development firm CityCoins.
In terms of what benefits might accrue to the city that offer these CityCoins, Miami Mayor Francis Suarez has said:
What the city gets out of it is a percentage of the coins that are mined are actually donated to the city of Miami by the virtue of its protocol… We’re focusing on differentiating our economy by creating the new wave of technological products that will incentivize people to move to Miami and be a part of our tech ecosystem.
The profits the city makes from this donation could be redeployed to other public policy issues such as public safety and addressing homelessness. Perhaps in the future we may end up seeing SydCoin, but for now this serves as a timely reminder of the confidence regulators and governments are gaining in terms of their interaction with ever expanding crypto-asset markets.