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According to reports, the state of Colorado will become the first state to accept cryptocurrency for tax payments after Governor Polis signed the Digital Token Act. There are plans to potentially expand the new payment method into other areas, including license fees. After the acceptance, the crypto would be converted into dollars before being deposited into state accounts.
On Twitter, the Governor noted that cryptocurrency payments would work much like credit card payments, from the state’s perspective though it would also convey bonuses that credit cards don’t offer. He’s saying something that isn’t so much profound as pragmatic. As a payment mechanism for taxes and other such items, cryptocurrency really is much better suited than a credit card. Polis is one of the first to recognize that and implement it into law.
[adinserter block="1"]In a tweet, Polis said,
“We are getting a payment provider to accept crypto equivalent and deposit the dollars into the state’s treasury for that amount. It is kind of like credit card payments, with the bonus that there are no returned payments.”
Polis has long been a supporter of the industry, and it is clear that he understands the branding element at play here. This doesn’t just allow residents to pay their bills in cryptocurrency. It shows residents, and the industry as a whole, that the state understands how blockchain technologies work, and that they want to be at the forefront. It tells crypto-preneurs, many of whom are still deciding where they want to put their physical footprint, that Colorado is open for business and that they are welcome.
At ETHDenver Wired, Polis said,
“Most people don’t trust either big corporations or big government, and that’s what blockchain allows us to solve for. We see it as a critical part of Colorado’s overall innovation ecosystem.”
This move is something to grab headlines. It is enough to pique one’s interest. But if you dig deeper, there’s more. Colorado has a chief blockchain architect who serves on the state’s blockchain council, whose mission is to expand blockchain technology in government agencies.
In a recent Wired article, the governor discussed how he’s working on a project that will move Colorado’s cattle-branding system onto the blockchain. In order to make the leap from beef to blockchain, you need to fundamentally understand how blockchain works. Clearly, Polis and Colorado do.
Blockchain has always been about more than just cryptocurrency. That’s why opponents couldn’t be more wrong when they say that the blockchain is a little different in strength of innovation versus CashApp and Venmo. In one such example of the blockchain’s strength, when combined with artificial intelligence, it can be used to store encrypted data, which could fundamentally change the lives of those suffering from the proliferation of counterfeit pharmaceuticals.
In 2017, the World Health Organization estimated that over 100,000 death-by-malaria cases in sub-Saharan Africa were caused by counterfeit pharmaceuticals. However, utilizing the blockchain, QR codes, holographic security tape and a smartphone for the receiving agent, we could dramatically reduce pharmaceutical counterfeiting, expanding the possibilities for supply chain verification and proof of origin beyond measures that currently exist. That’s something that Venmo can’t do. And the technology behind it all at is what cryptocurrency investors are buying into.
Colorado’s Jared Polis seems to understand how the pieces fit together. Yes, it is notable that he was the first to enact legislation to allow citizens to pay their taxes in crypto. But that’s just acting upon a situation with upside and little to no risk. The real headlines should be about the state’s vision to buy into more complex, technical aspects of the blockchain movement.
Richard Gardner is the CEO of Modulus. He has been a globally recognized subject matter expert for more than two decades, offering complex insight and analysis on cryptocurrency, cybersecurity, financial technology, surveillance technology, blockchain technologies and general management best practices.
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