In a highly anticipated move, the Arizona senate has just passed a bill that makes it possible for state residents to pay their taxes through Bitcoin and other similar cryptocurrencies.
The Arizona crypto tax bill could be the most visionary U.S. governmental intervention in blockchain to date. With the crypto revolution now in full swing it was only a matter of time before governments got behind big players such as Bitcoin and Ethereum to push their use for legal purposes.
In the past month, the Swedish government has released a statement announcing the introduction of a state cryptocurrency called the ‘E-Krona’ in order to to ward off blockchain competition and cash in on the crypto boom. Sweden already has some of the lowest cash usage rates in the world, making it an ideal environment for rapid cryptocurrency adoption.
Jeff Weninger—a house representative from Arizona— has co-sponsored a bill that proposes the use of Bitcoin for the purpose of tax payments within the state. (The bill was led by Senator Warren Petersen, and also cosponsored by Senator David Farnsworth and Representative Travis Grantham.)The bill has been met with a positive response by the Arizona State Government and has already been cleared by the State Senate Finance Committee.
The Future of Arizona Crypto Taxation Law
With the passing of this law, it will become easier for crypto holders to leverage the power of their digital assets for paying their taxes in a streamlined, hassle free manner. Some Arizonans have lauded this move, stating that cryptocurrencies such as Bitcoin are the future of finance and the faster people get on board the better it is for everyone.
It is important to recognize that the current infrastructure that exists within the world of finance today is not geared for the mainstream adoption of digital payment solutions. As a result, many governments all across the globe are now forced to ask themselves the question: “Are digital currencies like Bitcoin and Ethereum our best bet moving forward?”.
Arizona State minority leader Steve Farley a fierce opponent of governmental cryptocurrency adoption, has vehemently expressed his criticism of the bill, stating that their use within government transaction domains will “only lead to financial instability”. According to Farley, crypto assets are not time tested and thus are liable to fail at any point. As attempts to exert regulatory pressure on distributed ledger technology have failed to conclusively halt their impact on society at large, however, it appears that the blockchain revolution is here to stay.
The task at hand is determining how to facilitate the seamless adoption of alt-assets into the various spheres of our daily lives.
Whether it’s facilitating the creation of a blockchain based ID management platform, or developing channels that can facilitate transparent government dealings, it is now imperative that government officials around the world make blockchain integration a priority.
The results of the Arizona crypto tax bill will only become clear in 2020. However, it’s highly likely that we’ll see similar announcements being made by other state governments in the interim as the blockchain revolution continues.