The state of Arizona appears set to become the next crypto hub in the United States. The state’s Senate has passed a bill that would allow taxpayers to pay their obligations with Bitcoin and potentially some other accepted digital coins in the near future.
Timeline of the Bill
The process has yet to be complete, but is stepping up into the final phase of approval. Classified under Senate Bill 1091, the bill was initially introduced on January 10, 2018. It was approved shortly thereafter on January 24, in a 4-3 vote by the Senate Finance Committee.
Following an analysis of the bill and its corresponding terms and ramifications, the Senate officially approved the bill on February 8, by a 16-13 vote. One member omitted a vote, which would not have had an impact on the results regardless.
Potential Effects of the Bill
In the event that the bill is passed, it would mean that the incorporation of various cryptocurrencies for the purpose of tax payments, would be widely adopted by 2020.
One of the underlying responsibilities of the Arizona Department of Revenue, would be to assure the conversion of any tax payments made in crypto into US dollars, within 24 hours of receiving the payment.
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The requirement likely is due to the high volatility that is typically associated with the value of cryptocurrencies, which could lead to risk taken upon the state government, in the event of a strong depreciation in the value of a crypto-tax payment.
Jeff Weninger, Arizona State Republican Representative, co-sponsored the bill, as an advocate of cryptocurrencies. He appears to be spearheading the state’s efforts to become a domestic leader for the U.S. blockchain industry.
Mr. Weninger commented on the development of the Bill through the Senate: “It’s one of a litany of bills that we’re running that is sending a signal to everyone in the United States, and possibly throughout the world, that Arizona is going to be the place to be for blockchain and digital currency technology in the future.”
Bitcoin’s Global Progression
While Arizona is taking charge for advancing Bitcoin through traditional government operations and financial practices, other countries have already preceded to take such steps in the past. Back in 2015, Isle of Man had similarly advanced the potential for meeting tax obligations through Bitcoin as a means of payment.
As governments continue their respective assessments of the crypto industry, various authorities have conflicting viewpoints. Last week, Christopher Giancarlo, Chairman of the Commodity Futures Trading Commission (CFTC), supported the growing crypto market, further suggesting that his children were among a relatively young generation of investors.
While U.S. regulators appear more apt to accept Bitcoin and other virtual coins as financial instruments, the recent Chinese crackdown, which prohibits access to crypto exchanges and websites, indicates a converse point of view by Chinese counterparts.
The government of India was also bearish on crypto last week, committing to push forward its regulatory agendas for the industry by March 31.