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READING SPEED:
- Ohio last week became the first state in which businesses can pay the bitcoin fees.
- The Seminole County, Florida, has started accepting bitcoins for some payments this summer.
- Bitcoin is the best known of cryptocurrencies, which allows users to instantly record data and transactions in a mostly inaccessible manner.
In the last four months, two governments in the United States have begun to accept certain types of cryptocurrency payments, marking a growing trend that some hopes might pick up.
Last week, Ohio became the first state in which businesses can pay their bitcoin fees. The move follows Seminole County, Fla., Who began accepting bitcoin payments for things like license fees and taxes at the end of August.
The adoption by the government is the latest sign that cryptocurrencies are gaining legitimacy after initially being associated primarily with drug traffickers and weapons on the dark web. "The negative stigma is really starting to go away," says Sean Rolland, product director for BitPay, who has worked with both governments. "These are not money launders, but real people use it regularly."
For both Ohio and Seminole County, accepting bitcoin has two major advantages. First of all, BitPay – just like currency exchange counters – blocks an exchange rate and converts the currency to US dollars. This makes the transaction less risky for governments. After all, so far it has been a subdued year for bitcoins. The value of cryptocurrency has plummeted by 73% this year. This week, the currency saw a quick decline, falling more than 6% to $ 3,886 per coin on Monday.
"If the bitcoin is worth $ 1,000 or $ 10,000 dollars it is not relevant to us because it works like an exchange rate," says Joel Greenberg, tax collector for Seminole County.
Secondly, bitcoin offers taxpayers an option with a lower commission – 1 percent – than those associated with credit cards, in which usually there is a 2 or 3 percent surcharge for payments to the government. As part of their partnership with BitPay, Ohio and Seminole County allows the company to retain the commission as compensation.
Bitcoin is the best known of cryptocurrencies, which all use generalized accounting technology. Distributed ledger technology, such as blockchain, allows users to instantly record data and transactions in a mostly inaccessible manner.
Given these characteristics, Ohio treasurer Josh Mandel hopes to accept bitcoins for 23 business taxes that will be particularly attractive for technology startups and international companies. In the end he wants to expand payments to individual taxes and other types of cryptocurrencies.
"We want to project into the rest of America that Ohio is noisy and proud to embrace blockchain technology," he says, noting that the launch of ohiocrypto.com coincides with an important blockchain conference in Cleveland. "We are trying to plant the flag and send the message to entrepreneurs and software developers all over America that Ohio is open to the market."
However, Mandel recognizes that such a change in the business climate will not occur from one day to the next. The adoption rate in Ohio is probably slow, as has been so far in the Seminole County. But this is understandable given both the novelty of the program and the volatility of bitcoins.
For now, it will probably remain something new. To this end, Greenberg emphasizes that his office has installed a bitcoin ATM in the lobby where taxpayers can buy currency and speculate. "If they want to sit on it for a week before returning to make payment, they can," he says. "If it goes up, they make the difference".
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