Although President Biden just announced an executive order on cryptocurrencies, states still have little guidance about how to respond to the growing popularity of the digital currencies.
One major criticism of crypto is its volatility; prices can swing widely in a single day. Colorado plans to use"a third-party exchange that accepts virtual currency, converts it to U.S. dollars, and transmits the U.S. dollars to the state" through an an electronic funds transfer, says Kate Powell, a spokesperson for Gov. Polis.Ohio
In 2018, Ohio became the first state that began accepting Bitcoin as tax payments. But that effort was short lived. The online portal that allowed businesses to pay their taxes in Bitcoin shut down less than a year after it was introduced.Office sought to make it clear that"no form of cryptocurrency was accepted by or held in the Ohio Treasury." It also noted that in the months that the online portal was active, only 10 businesses chose to pay their taxes through this method.
Popular cryptos, such as Bitcoin, have been legal in the U.S., though the IRS currently labels any form of virtual currency as property, not legal tender. So far the the federal government has not directly responded as states decide on their own whether to declare cryptocurrencies legal tender. Though most of these bills are in early stages, advocates like Calderon believe they can clear up confusion about what can and can't be done with crypto."So if there's a little bit more clarity, just from a local government perspective, that's going to significantly help. This is something that the government needs to jump in and start to acknowledge, it's not going away.
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