According to Colorado’s governor, residents will be allowed to pay their state taxes in cryptocurrencies by the middle of this year.
The governor also stated that the goal is to accept cryptocurrency for all payments made in the state in the future.
Colorado Is Taking Steps To Adopt Crypto
Gov. Jared Polis laid out the schedule for the shift in an interview on Tuesday, which has been a long-term objective for the state. On “Crypto World,” he said:
“By this summer, we expect to take cryptocurrency for all of our state tax-related functions.”
“And then we plan to extend that out across the entire state government for things like driver’s licenses and hunting licenses,” he continued.
As the popularity of cryptocurrency grows in the United States, Colorado is one of around 20 states pursuing crypto legislation. Pew Research estimates that roughly 16% of Americans have invested in digital assets.
Polis has long been a proponent of cryptocurrencies, taking bitcoin donations for his political campaign and spearheading efforts to make Colorado the US’s blockchain innovation hub. He first unveiled the state’s plan to accept cryptocurrency as payment for taxes at Consensus 2021 in May of last year.
Polis was quick to stress out that Colorado’s asset holdings are restricted, though he didn’t rule out the possibility of that changing in the future. He stated, ”
“It’s critical that people understand that, as a state, we are not in the business of having exposure to a market where securities, including cryptocurrencies, fluctuate.” We wouldn’t retain it as bitcoin or ethereum in our instance.”
Polis’ approach is diametrically opposed to the Fed’s.
The governor of the Western United States has also stated that accepting cryptocurrencies will not subject the state to the cryptocurrency market. Because the government will convert all crypto payments to dollars rather than keeping them for long periods of time, this is the case.
“There will be an intermediary who will change them back to dollars for our needs,” Polis said. Polis made a similar remark at a National Governors Association conference last month.
When Polis was elected to Congress in Colorado in 2014, he was one of the first lawmakers in the United States to accept bitcoin campaign donations.
Colorado would not be the first state to accept digital assets as payment for taxes; however, pilot programs in Ohio and Seminole County, Florida were both unsuccessful and subsequently abandoned.
Colorado’s approach goes against the US federal government’s current interpretation of bitcoin as property, which states that anyone who wishes to pay taxes using cryptocurrencies must first pay taxes on their holdings.
Meanwhile, the United States’ federal government remains skeptical of cryptocurrencies. Federal banking authorities have continued to warn about the dangers of digital assets to the economy under the Biden administration. One such authority is the Securities and Exchange Commission, whose chairman Gary Gensler has continued to refer to the crypto business as the “Wild West.”