Colorado will let citizens pay their tax in bitcoin

The Colorado governor Jared Polis was also the first US politician to accept campaign donations in bitcoin

Colorado is to become the first US state to accept cryptocurrency from private citizens as payment for taxes.

Jared Polis, the governor, who has long been a supporter of alternatives to cash, said that the state would take digital payments and deposit the equivalent value in dollars into its Treasury. “In Colorado we’ve been laying the groundwork to be a centre of crypto and blockchain innovation for a number of years,” he said. “We see it as a critical part of Colorado’s overall innovation ecosystem.”

Polis, a Democrat who has been linked to a potential tilt at the White House, accepted campaign donations in bitcoin while running for Congress in 2014.

Other states are debating using cryptocurrencies. Arizona could soon accept bitcoin, the most popular form of cryptocurrency, as legal tender and California proposes a bill to allow all state agencies to take digital currency.

Ohio announced a similar project to Colorado’s in 2018 for businesses, but abandoned the initiative a year later.

In South America, President Bukele of El Salvador made bitcoin legal tender in September.

Critics of cryptocurrencies point to their volatility and say that if they displaced national currencies, governments and central banks would struggle to regulate economies effectively. Bitcoin has been through wild swings in value throughout the pandemic, but gained more than 300 per cent from March to December 2020.

However, it has suffered a drop in recent months and is now valued at about $35,800, down from $67,500 in early November.

Polis, 46, said that he would like Colorado to be able to accept cryptocurrency by the summer, but no specific timeline has been announced.

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