Arizona lawmakers passed a bill earlier this week that will allow the state citizens to pay taxes using Bitcoin and other cryptocurrencies.
The bill was passed by the Arizona Senate that will allow taxpayers to not only pay their taxes using cryptocurrencies but any interest and penalties to Arizona’s Department of Revenue.
Jeff Weninger, an Arizona state Republican introduced the bill and said that this tax measure is a signal for everyone that the state is going to be the accommodating place for blockchain and cryptocurrency users in the future.
One state could allow you to pay your taxes in bitcoin?
Arizona bill among others that could lead the way in how
governments view digital ‘currency’
— Charlie Lapastora (@charlielap) 7 February 2018
“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,” he told Fox News
After Senate’s approval, the bill is sent to Arizona’s House of Representatives for further consideration. The success of the measure depends upon the approval from the House of Representatives and the required settlement if the House’s passed version differs from that of the Senate.
Due to the high volatility of the cryptocurrency market, Weninger is facing a tough time to get the bill approved from the state legislature.
Steve Farley, Arizona state Senator who is running for Governor, said that the bill puts a “volatility burden” of Bitcoin’s prices on citizens who pay their taxes in U.S. dollars.
“It would mean that the money goes to the state and then the state has to take responsibility of how to exchange it,” said Farley.
This just came after Bitcoin underwent a major crash and traded at $5,947 on February 5.
Joon Lan Woong, a cryptocurrency expert says that there are still chances that Bitcoin might experience further falls.
“Even the most ardent bitcoin supporter wouldn’t deny that it’s greatly inflated at the moment in terms of valuation,” he said. “It’s come down a lot from the December highs but it’s still eight times higher than it was around 12 months ago.”
“There’s an argument to be made that there is further to fall.”
Although Bitcoin has managed to gain a 41 percent increase since it slumped earlier, nevertheless, cryptoanalysts believe that it might just be a temporary rebound from an extended downfall.
Woong further said that although Bitcoin is very popular and getting great reviews from supports it still can’t compete for the fiat currencies like dollar and pond in terms of common use.
“On the one hand bitcoin is kind of a digital gold, a store value. On the other hand, it’s a decent medium of exchange but not as good as the US dollar or the sterling,” Woong told BBC Radio 4.
A similar bill was defeated in 2016 by the New Hampshire House of Representatives. If this one gets approved, Arizona will become the first ever U.S state to accept cryptocurrencies for taxes.
Also Read: U.S. Federal Reserve might accept Ripple