Colorado May Allow Tax Payments in Cryptocurrency Starting This Summer, Says Governor

The state will not hold any crypto assets, but will convert them into fiat at their end.

By Radhika Parashar | Updated: 17 February 2022 11:46 IST

Colorado May Allow Tax Payments in Cryptocurrency Starting This Summer, Says Governor

Photo Credit: Unsplash/ Ewan Kennedy

Colorado governor Jared Polis aims to promote cryptocurrency as a new asset class

Highlights

Colorado’s new pro-crypto move expected in summer this year
Mayor Jared Polis not concerned with crypto volatility
Biden administration expected to pass crypto-related orders

Colorado in the US is taking progressive steps in terms of introducing crypto use cases for common people. Jared Polis, the governor of Colorado has revealed plans that, by this summer, he expects to facilitate tax-related transactions in digital currency. The state administration will then convert the collected cryptocurrency into fiat currency — US Dollars — on their end via an intermediary. As of now, the identity of this intermediary has not been disclosed by Colorado authorities.

Polis, 46, said during a recent interview, that the volatility related to crypto assets such as Bitcoin did not trouble him because his state was not planning on holding any cryptocurrency but converting them to fiat immediately.

“We expect by this summer — pretty soon — to accept crypto for all of our state tax-related purposes. Then we plan to roll that out across all of state government for things like, could be as simple as driver's license or hunting license within a few months after that,” the Colorado governor said during the interview.

Crypto Risks Require Preparation of a Global Response, Say Regulators

Along with benefitting from the decreased transaction costs, Polis has cited new asset class promotion as another reason for planning to enable tax payments in cryptocurrencies.

After taking office in 2019, Polis signed the Colorado Digital Token Act that aimed to spare crypto tokens with a “primarily consumptive purpose” from some securities regulations.

Chris Hansen, the state senator of Colorado is also reportedly working on a bill that would allow state-developed digital tokens to be used for reserve purposes.

Crypto Under Scanner as Canada Invokes Special Powers to Counter Blockade

Several parts of the US are taking an experimental and positive approach towards the crypto sector despite uncertainty in regulatory laws.

The US state of Wyoming has introduced legislations to attract crypto miners.

US' Texas state offers a 10-year tax abatement, sales tax credits, and state-sponsored workforce training to crypto miners, attracting more of them, a report by Data Center Dynamics recently said.

Miami, the beach-town in US' Florida state rolled out a city-coin called the “MiamiCoin” last year.

In addition, Eric Adams, the mayor of New York City aims to make the metro the “centre of the cryptocurrency industry”.

Meanwhile, the White House may soon pass executive orders around the crypto sector as part of President Joe Biden's national security memorandum in the coming weeks, the exact timeline of which remains undisclosed as of now.

Government entities will be assigned the role of studying the crypto space and its elements like stablecoins and non-fungible tokens (NFTs) among others, news publication Barron's reported, citing an anonymous White House source as saying.

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Further reading: Cryptocurrency, Crypto Tax

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More