Over the past few years, state legislatures have explored ways to regulate and capitalize on the growing interest in cryptocurrencies. This year, two Western states drew national attention to proposals that would allow taxes to be paid in digital currencies.
A bill before the Arizona Legislature would change state law to include Bitcoin as legal tender to pay “debts, public charges, taxes, and dues.” And a proposal in Wyoming is not limited to a specific currency, but would only apply to paying local sales and use taxes.
“Both proposals face potential legal and policy hurdles. But Wyoming has gone further than any other state in passing laws to enable cryptocurrency adoption, and proponents of the proposal there believe it will be the first state to take a significant step forward. tax payments,” Politico reported.
A summary from the National Conference of State Legislatures shows that 33 states considered proposals last year regarding digital currency. And Wyoming has been at the forefront in laying the groundwork to capitalize on the growing popularity and potential of digital currency.
“Over the past four years, Wyoming has crafted profound legislation that has captured global attention with its groundbreaking concepts,” said Sen. Tara Nethercott, R-Cheyenne, who serves on the state’s select committee. on blockchain, financial technology and digital innovation technology, told the Wyoming Business Report.
Republican U.S. State Senator Cynthia Lummis, one of the most vocal champions of crypto in Congress, plans to introduce a comprehensive bill this year that would cover everything from how digital assets are taxed and filed with consumer protections, Bloomberg recently reported.
Colorado is also trying to claim its position in the cryptocurrency industry. Nasdaq.com reported last year that Governor Jared Polis, a Democrat, told a gathering of digital currency supporters that his state “would be thrilled to be the first state to allow you to pay your taxes in a variety of cryptos”.
“Colorado is and will be the center of blockchain innovation in the United States, attracting investment and good jobs and innovators in infrastructure, digital identity, (and) individual data security in the private and public,” he said, without giving details on how this ambitious plan would unfold.
According to the New York Times, local leaders across the country are also looking for money-making opportunities to create jobs and fund public projects.
Cryptocurrencies are decentralized digital currencies that can be used to buy and sell products. Owners often have a digital wallet that allows them to buy or sell coins through digital exchanges. Wallets are often online or stored offline on a hard drive.
While some retailers accept virtual currencies and support state efforts to help innovation grow, no state currently allows taxes to be paid in crypto. Ohio was the first to announce that businesses could use Bitcoin to pay their tax bills in 2018. But the service lasted less than a year before it was declared illegal and shut down.
And some observers see Wyoming and Arizona’s efforts as little more than token stunts to push volatile digital currencies into mainstream acceptance.
Arizona’s bill declaring Bitcoin legal tender has a particularly high hurdle to clear, as the Constitution limits the power of states to issue their own currency.
“Arizona could certainly pass a law like this and the state government could choose to accept bitcoin as payment for Arizona taxes, but that wouldn’t change the legal treatment of bitcoin as property. from a federal tax perspective,” Preston Byrne, a Washington, DC-lawyer specializing in blockchain technology used by digital currencies, told gobankingrates.com.
Wyoming’s more targeted proposal would face a battle more political than legal, said Rohan Gray, research director of the Digital Fiat Currency Institute, a San Francisco-based trade group that represents government agencies and financial institutions.
He told Politico that as the federal government prepares to regulate cryptocurrencies more broadly, Congress could simply pass legislation banning the practice.
Global financial regulators also fear replacing a national currency, which could undermine the ability of national governments and central banks to regulate the economy.
As support and skepticism for digital currency cut across the political spectrum, partisan lines are emerging in Congress, Slate.com reported. He detailed examples of Republicans in the House and Senate having a more supportive approach to innovative digital technology than Democrats and encouraging the Federal Reserve and Treasury Department to “take a friendlier stance toward Bitcoin so that China doesn’t progress in the sector”. ”
“Among the wider population, however, partisan divisions are not so clear-cut on the issue of cryptocurrency,” the article notes. “A recent Morning Consult poll found that 9% of Democrats and 9% of Republicans think there are too many cryptocurrency regulations. Conversely, 26% of Democrats and 19% of Republicans believe there are not enough cryptocurrency regulations, a 7-point gap that Morning Consult calls fairly narrow when it comes to cryptocurrencies. opinions on financial laws.
And some observers say it’s the support of this broader demographic that proponents of the Wyoming and Arizona proposals want to capture, as the media continues to cast a wary eye on the cryptocurrency craze.
Broad appeal might be hard to come by in Arizona, where cryptocurrency legislation is sponsored by Republican Senator Wendy Rogers, who was recently singled out by the Anti-Defamation League for her extremist views and racist rhetoric. But Wyoming’s proposal is backed by the Merchant Advisory Group, a trade group for retailers that includes giants such as Amazon, Walmart and Home Depot. For retailers, part of the appeal would be convenience, said Wyoming Representative Ocean Andrew, the bill’s sponsor.
It was quoted on the Moneyandmarkets.com website, where columnist Shawn Ambrosino hopefully writes that debates over bills like those in Wyoming and Arizona are what the cryptocurrency movement is all about. needs to generalize.
“Just like we’ve seen with the cannabis market, as soon as states start accepting these digital currencies as legal tenders,” he predicted, “it starts to spread like wildfire.”
contributor: Herb engraving