Colorado governor Jared Polis brought some intriguing attention to the cryptocurrency market when he expressed his support for cryptocurrency at the recent National Governors Association meeting. Polis did not endorse cryptocurrency investing, but he did point out that Colorado would continue to collect “institution” payments via crypto even though Bitcoin suffered tremendous losses.
Specifically, Colorado will become the first state to accept tax payments via Bitcoin. Doing so could make collecting tax obligations easier.
Government Payments Via Bitcoin
Residents and nonresidents alike may find themselves paying the Colorado government for something. Driver’s licenses, parking tickets, tax debts, and more require payment. Colorado intends to accept tax payments via Bitcoin, a decision that raises some eyebrows. Concerns over lost value likely weigh on state officials’ minds.
Polis noted that he had no intention of the state holding onto Bitcoin. The state receives payment, and the Bitcoin assets would be immediately cashed out. The state won’t risk holding onto Bitcoin because the value may drop.
Polis likely believes that it is in a government’s best interests to accept as many flexible payment arrangements as possible. Putting barriers that make receiving funds difficult doesn’t always work in a government’s favor.
Bitcoin Takes a Tumble
Polis’ decision to speak approvingly about Bitcoin is somewhat surprising considering the recent decline in Bitcoin prices. Bitcoin saw its price rise to stratospheric highs, only to experience a dramatic price drop, wiping out a tremendous amount of wealth. No one knows what Bitcoin or other currencies future may turn into, and now could be a time to buy low. Or the price could continue to crash. Crypto is volatile, which likely governs Polis’ belief in cashing crypto payments without delay.
Crypto Gains Political Publicity
One interesting element to a sitting governor’s decision to speak highly of cryptocurrency is the commentary goes against the conventional grain. Many politicians and lawmakers find cryptocurrency somewhat threatening since it operates outside of standard banking regulations. People could move money anonymously through crypto exchanges, and tracking taxes owed by crypto traders isn’t always easy. Perhaps Polis may realize that young persons tend to put a lot of money into crypto. If that is where their assets are, accepting Bitcoin becomes the logical way to facilitate payments from people whose money sits in crypto wallets and not money market accounts.
Other governors and state legislators may watch whether Colorado’s decision works out. If so, other state governments may become willing to accept payments via digital currency. If not, Colorado might be the only state to start and stop using Bitcoin. Time will reveal whether the decision was appropriate.
The Colorado experiment could sway opinions about personal Bitcoin and cryptocurrency investing. Someone wondering whether crypto is “legitimate” may find Polis’ endorsement moves them to think positively about exploring crypto endeavors. At the very least, they may start using crypto to pay bills.
Colorado is taking somewhat of a risk, but the risk could pay off. Maybe one day, the state won’t cash out crypto payments right away. The state could speculate the digital currency will rise in value and hold onto them.