Crypto Colorado: Governor Sees ‘First Digital State’

Colorado plans to accept cryptocurrency as payment for state taxes and to buy licenses.

Image via Wikimedia Commons,

The governor of Colorado is looking to create the “first digital state,” with plans to allow people to pay their taxes and buy licenses using cryptocurrency beginning this summer. 

Governor Jared Polis appeared on CNBC recently and unveiled his plans to make Colorado “a national leader in blockchain innovation” by accepting digital money as payments. He will be a keynote speaker at the world’s largest Web3 and Ethereum conference, called ETHDenver, on Friday evening.  

This comes at a time when only a small number of private-sector companies are willing to take cryptocurrency as a form of payment. Colorado would be the first state to start accepting crypto for payments of hunting licenses, drivers licenses, and state taxes starting this summer. 

Some cities have already embraced digital currency.

Miami has issued a MiamiCoin for revenue collection and New York has created a NYCCoin and is increasing its crypto treasury. People are incentivized to help process, or “mine,” the NYCCoin by earning Stacks and Bitcoin through installing and running Geth (a Virtual Machine which is a CPU miner) on their computer and running the required computations. Mayor Adams has shown his support for digital currency by volunteering to take his first three paychecks in Bitcoin.  

Mr. Polis’s plans to issue a token for Colorado and to push further into cryptocurrency than New York City and Miami. 

During his address to ETHDenver, titled “The First Digital State,” he is expected to discuss how Blockchain technology has already been put to use by the state of Colorado and the plans to incorporate new digital currency policies into existing state architecture.

While all the details have not been released, the state would process payments through a third-party coin converter — essentially a Coinbase-type service — and the digital money would be converted into U.S. fiat dollars and deposited by the state.  

“It’s important that people know from a state perspective, we cannot be in the business of having exposure to a market where securities, including cryptocurrencies, fluctuate,” Mr. Polis said in his interview. 

The currency converter is needed because the state’s accounting ledger uses conventional monies. One reason for that is because the Constitution forbids individual states from using their own currencies. This digital push is definitely in a legal gray area, but advocates liken it to using credit cards with lower processing fees.

Those lower fees are possible due to the technology upon which cryptocurrency is built on, called blockchain, and there is a lot more this technology offers than financial services. 

Denver and the state of West Virginia have already used blockchain technology to offer military members the ability to vote in the 2018 midterm elections. This was accomplished through a phone-based voting system using an app called Voatz. State-sanctioned uses of blockchain to this point has been quite limited, but Mr. Polis is planning a big expansion. 

Cryptocurrency will be rolled out “across all state governments for things [that] could be as simple as a driver’s license or hunting license,” he said in an interview

There are a lot of other uses for Blockchain, including additional public sector applications other than voting and tax payments that include tracking government spending and helping with policy development. There is a “bright future, with regard to how the public sector can benefit from the distributed ledger and crypto economy,” Mr. Polis said.

The New York Sun

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