Colorado Governor Jared Polis announced earlier this year that his state will be accepting tax payments in the form of cryptocurrency. Governor Polis is a former big-tech entrepreneur that has been involved with the crypto community for a decent amount of time; speaking at crypto conferences and seminars around the country. Furthermore, the governor stated that he is proud to put Colorado at the forefront of digital innovation.
How Will This Work?
Colorado Is accepting crypto payments then converting them to a dollar value, which will then be deposited into the State’s Treasury. The state has also introduced a “Chief Blockchain Architect” that will assist in processing the newly accepted crypto payments, however even with this new appointment, concerns are continuing to grow. According to the Federal Government, Cryptocurrency is considered property, for cryptocurrency to be used as payment, it may need to be taxed as property first. This could ultimately deter people from using Cryptocurrency as a form of payment. For a better understanding of how payments will be taxed, see our article on tax implication breakdowns on cryptocurrency.
Crypto Bureaucracy Growing in the United States
Colorado is not the only state that is getting cryptocurrency involved with Government. New York Mayor Eric Adams announced that he will be taking his first three paychecks in the form of crypto in an effort to attract biotech firms to New York. Miami’s Mayor Francis Suarez has introduced multiple initiatives to attract the crypto industry into his city, Including the launch of MiamiCoin, which is the city’s own form of cryptocurrency.
Wrap-Up
As Cryptocurrency becomes more mainstream in government sectors, it is safe to say that its role in our economy will grow as time goes on. The SEC and other regulatory bodies are expected to fully scale crypto regulation sometime this year. This is why It is important to consult with your accountant about what crypto transactions you need to report this tax season.
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