Bitcoin Will Be Accepted for State Tax Payments in June Says Colorado Gov. Polis
Gov. Jared Polis is all in on crypto as the state of Colorado explores new use cases.
- Colorado Governor Jared Polis says his state will soon allow its residents to pay state taxes using Bitcoin and Ethereum.
- In a CNBC interview on Tuesday, he also said that state lawmakers are working on legislation to allow Colorado to issue its own digital tokens to raise funds for special projects and building initiatives rather than issuing bonds or raising taxes.
- He also said Denver has already successfully used blockchain-based voting to validate ballots from city residents who were in the military or overseas during a city election cycle two years ago.
During a Tuesday interview on CNBC Crypto World, Colorado Gov. Jared Polis said he wants his state to become "the first digital state in the U.S." To bring that vision to fruition he announced that the Centennial State plans to allow its residents to pay their state income taxes using Bitcoin and Ethereum as soon as this June.
"Using an external-facing portal, we expect by this summer to accept crypto for all of our state-related tax purposes, and then we plan to roll that out for all of the state government, for things like -- could be as simple as -- driver's license or hunting license within a few months after that. The biggest set of transactions will be the taxes that people pay, but we expect to accept crypto by this summer."
Gov. Polis says he's not worried about crypto volatility
You may be wondering how crypto as a form of payment is possible given the wide and wild price swings that can occur across the cryptocurrency space. In the past, we've seen whipsaw price action across both Bitcoin and Ethereum assets of more than 20% within a 24-hour window on multiple occasions, but the governor says their system accounts for that.
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"In our case, we would not hold Bitcoin or Ethereum as an asset class. It would be paid and then converted to dollars in real time into our way of accounting -- our budget is approved and our expenses are incurred in dollars. It would really be converted in the moment it was paid, just like how we accept payments using a credit card but with a much lower transaction cost than with a credit card."
Colorado wants to issue its own digital tokens for bonding and project funding
Polis also noted that state lawmakers are considering a digital-token bill that would allow Colorado to create its own blockchain-based digital tokens for special projects and various public works as an alternative to raising taxes or issuing bonds, which could hurt the state's credit rating.
"There's a bright future regarding how the public sector can benefit from distributed ledger and crypto-economy -- not co-opted. It defies the very concept of cryptocurrency to have any kind of government-backed security. But I think we can benefit from it both in terms of payments, reducing transaction costs and friction, but also creating new asset classes to satisfy reserve requirements, while protecting people's privacy as well."
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Denver has already used blockchain technology in a city election
Polis further stated they're already going above and beyond merely accepting crypto. His administration is exploring a wide variety of crypto use cases including agriculture shipments, livestock provenance, employee-based business ownership, as well as voting for elected officials.
"For instance, the city of Denver held -- I think -- the first in America blockchain-confirmed election for their overseas and military ballots two years ago in their municipal elections, comprising about 8,000 ballots…it's an exciting time and Colorado wants to be as hospitable as it can to the distributed ledger, ownership models."
While cities such as Miami and New York are embracing CityCoins for bonding projects, and their mayors are accepting salaries in Bitcoin, the scope and breadth of what's happening across the entire state of Colorado is inspiring. As that state pursues its goal of becoming "the first digital state," it will no doubt also become a role model for other state-level municipalities.
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Tor Constantino owns Bitcoin and Ethereum.