• Mendoza, Argentina, has begun accepting cryptocurrency tax payments

  • Mendoza, an Argentine province, has put in place a mechanism that allows taxpayers to pay their taxes entirely in cryptocurrency. The technology, which was inaugurated this week, is part of a deliberate push by the Mendoza tax authority to modernize and digitize payments, and it leverages the services of a third party to execute the transactions.

    Mendoza Switches to Crypto for Tax Payments

    Because of their recent popularity, governments are increasingly incorporating cryptocurrencies as a means of paying state-related duties. Mendoza, an Argentine province, is one of the first in the country to establish a digital system that allows taxpayers to make payments and perform other transactions using digital currency.

    The system, which went live on August 24, is part of a planned initiative by the province’s authorities to modernize the payment of taxes and state tributes, providing individuals with multiple options for meeting their duties. According to Nicolas Chávez, general director of the Mendoza tax administration authority:

    “It is one more door to facilitate the payment of taxes to taxpayers. This is a service offered by the payment processor with which we have incorporated new technology, such as virtual wallets and cryptocurrencies.”

    While the payment facility is immediately included in the province’s page, payments are processed by a third-party entity that accepts crypto and liquidates payments made to the province in Argentine pesos. The system only accepts payments in stablecoins such as USDT, USDC, and DAI. As a result, the system keeps volatility out of its processes.

    Initiatives Like This

    Other local administrations in Argentina and Latin America have also announced the acceptance of cryptocurrency as a form of tax payment. Horacio Larreta, the mayor of Buenos Aires, revealed in April that the city planned to implement cryptocurrency payments for taxes. This use case, according to Larreta, might be deployed in 2023 alongside a blockchain-based identity system.

    Due to its popularity, Rio de Janeiro, one of Brazil’s largest cities, has also announced that these assets will be included as tax payments in 2023. However, Rio’s plans go much farther, picturing crypto payments for other services such as taxi rides and NFTs to promote arts, culture, and tourism, as well as investing a portion of public revenues in crypto through a new entity called the Municipal Committee for Crypto Investments.

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