Beginning on the 26th of November, Ohio will become the first US State to accept BTC payments for taxes, using the Bitpay payment processor. BTC payments will be acceptable for more than 25 kinds of business taxes. It will also mean that the US will become one of the first governments in the world to accept BTC payments, despite the nation being behind in many other aspects of DLT development. The option is currently only available for businesses but is to be extended for all residents.
BTC payments in Ohio
While BTC is presently the only available cryptocurrency, the office is looking to add more in the future. A dedicated website has been established so that businesses in Ohio can pay taxes in BTC. Other states (such as Arizona, Georgia, and Illinois) have considered BTC payments, but these have never gotten past state legislature.
The move is part of a wider effort to turn Ohio into a technological hub. Colombus is already technologically advanced, and attempts are underway to rebrand Cleveland into ‘Blockland,’ like many other regions aiming to turn themselves into modernized mini-economies built on DLT. The initiative is being pushed forward by the Ohio treasurer, Josh Mandel. According to the Ohio website, cryptocurrencies are being adopted for security, transparency, and cost advantages –
“Cryptocurrencies cannot be transferred to third parties without user initiation, thereby practically eliminating fraud; Anyone can view all transactions on the blockchain network; Payments on the blockchain can be tracked on a second-by-second basis; a minimal fee is charged to confirm transactions on the blockchain network.”
Taxes in crypto?
Paying taxes in cryptocurrency is not exactly the kind of groundbreaking activity that the technology was designed for. The whole purpose is to establish new paradigms where society runs entirely on the blockchain, largely negating the necessity of centralized bureaucratic organizations (the US federal government being the largest on the planet). While this may sound far-fetched right now, there are a number of initiatives underway, such as the crypto-based floating island project. Additionally, there are already blockchain regions such as Tallinn in Estonia where crypto is widely accepted and used as a means of exchange. These regions are growing in number and stature.
The use of cryptocurrency to pay taxes, and stemming from this a reinforcement of inequality as these mandatory payments stimulate boom-bust cycles and never get properly distributed, is not what Satoshi Nakamoto had in mind. However, the transition from a centralized fiat system to a decentralized and open economy will take time and many small steps. Every form of adoption is one step closer to a decentralized society, and these announcements are to be looked at positively with a long-term view.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.