Colorado On Track To Be The First US State To Accept Crypto For Paying State Taxes And Fees

Colorado Governor Jared Polis said on Wednesday that the state would be the first in the country to accept cryptocurrencies as payment for state taxes and fees.

Polis said that the state would accept digital coin payments and deposit the equal value in dollars into the state's treasury.

"In Colorado, we've been laying the groundwork to be a center of crypto and blockchain innovation for several years," Polis said in a statement. "We see it as a critical part of Colorado's overall innovation ecosystem."

Legislators in other states, including Arizona and California, are introducing bills that, if passed, would make cryptocurrencies an approved method of payment throughout the state, not just for tax purposes.

Though Ohio tried out a similar scheme in 2018, it was considered ineffective and abandoned in 2019.

Polis has been playing a role in combining cryptocurrencies and politics. Following a favorable judgment by the Federal Exchange Commission, he accepted Bitcoin for campaign donations during his 2014 race for Congress.

Outside of the United States, El Salvador has been on a similar course for the past nine months. The country's Legislative Assembly enacted a measure making Bitcoin legal money in June 2021, allowing it to be used for ordinary transactions.

Accepting bitcoin has critics who point to the volatility of digital currencies and inflation worries as reasons why the effort might devastate El Salvador's economy. The International Monetary Fund (IMF) urged the Central American country to reconsider its decision in January.

Cryptocurrency investment and interest have soared throughout the pandemic. Bitcoin—the original digital currency—gained more than 135 percent in 2021, before plummetting over 45 percent from an all-time high in November.

Polis said that he wants the state to process and accept bitcoin by the summer.