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Most U.S. banks and governments are crypto-cautious. You might even say crypto-averse.
Fears of being associated with the criminal that uses digital currency, concerns about the digital currency of the volatility, about the risks of anything new, and the overall regulatory compliance issues stand in the way of wholehearted acceptance.
But not for Ohio. State officials recently launched Ohiocrypto.com, a site where businesses can pay their taxes with cryptocurrencies like bitcoins. It is the first state to allow this. Blockland, and it maintains a public ledger of all government expenses that could run on a blockchain.
These initiatives are the brainchild of the Treasurer Josh Mandel, and he has a few different motives.
One is to make it easy for Ohioans to pay their taxes.
Mandel said: "The embrace of cryptocurrency and the blockchain technology that makes it all about democratizing finance, making finance easier for individuals and eliminating friction. "We're trying to give taxpayers more options and ease in paying their taxes. ACH, or credit card, that's fine, and they have an added option with cryptocurrency. "To be more expensive than in the United States."
Wave of the future?
Ohio Treasurer Josh Mandel would like to see other states and the federal government embrace cryptocurrency. "I'm a believer in the concept of the state of the laboratories for democracy," he says.
"We are loud and proud about embracing blockchain technology and cryptocurrency," said Mandel said. He wants to encourage the rest of the country to adopt cryptocurrency.
"I'm a believer in the concept of the state of the labors for democracy," he said.
And like in other tech-friendly states – such as Arizona, which recently set up a fintech sandbox – Mandel hopes to attract software developers and entrepreneurs to Ohio.
Downplaying crypto fears
A perception exists among U.S. banks and governments that are part of a shady underworld where a lot of drug dealing and money laundering go on under the cover of anonymity. There is also the real risk of price volatility. And several cryptocurrency exchanges have been hacked. Consequently, many executives and officials steer clear.
Accepting cryptocurrency. It's working with Bitpay, a payment processor that immediately converts the digital currencies to the currency.
Stephen Pair, founder and CEO of BitPay, argues that crypocurrency is not that risky.
"A lot of people talk about bitcoins as this unregulated thing," he said. It's not the case. We're subject to the same regulations banks are subject to and everybody else. There's an extensive regulatory framework at the federal and state levels that covers our activities. When a company signs up for BitPay, they go through an extensive network [know your customer] process. They have to upload documents, and in many cases we go above and beyond what the regulations require us to do. "
Cryptocurrency has many legitimate uses, said Ari Lewis, cryptocurrency adviser to the Ohio treasurer's office.
For instance, Waverly Willis, in Cleveland barber, recently started accepting cryptocurrency for haircuts.
Lewis said, "For him," he said. "People who are tech savvy are going to him because they can pay with bitcoin; he also takes bitcoin cash. "
Paying with digital currency can be cheaper than some options. Square transactions, for instance, cost 2.9% plus 30 cents. BitPay charges 1% of the transaction fee.
Blockchain enthusiasts
Ohio has adopted a new technology in the name of efficiency. Four years ago, Mandel's team created a website called Ohiocheckbook.com, the first government transparency website. $ 500 billion of state expenditures, everything from a $ 2 pack of pencils to millions of dollars in road contracts.
"We put that on citizens" smartphones and computers so they could follow the information, follow the money and hold politicians' feet to the fire, "Mandel said.
A lot of politicians were upset about the site.
"We have a lot of politicians who are good or the boys who are trying to hide their actions from the taxpayers," Mandel said. "Ohiocheckbook.com shines sunlight on the decisions that public officials make."
Many questionable expenses have been exposed through the site. In one case, tax money was used to buy a subscription to Playboy magazine.
Today, more than $ 690 billion of Ohio is spending is tracked online.
It is not a public ledger of sorts, it does not run on blockchain or distributed-ledger technology yet. It may migrate to blockchain technology. In early December, Ohio hosted a conference called Blockland Cleveland in the hopes of turning the city into a blockchain tech hub.
"There's a lot of activity in and around the tech space here in Ohio," Mandel said. "As the cost of living becomes increasingly insane in places like San Francisco and New York, you're going to see more software developers and entrepreneurs coming to the heartland. When they look like the heartland, we want them to come to Ohio. Ohio is a great place to build a business, you raise a family, you're a lot of people, you're strong, modest, Midwest values. "
More than 1,700 people attended the conference. Speakers included Joe Lubin, one of the founders of Ethereum; Nick Zalos, one of the pioneers of bitcoin; Mark Hurd, CEO of Oracle; and Beth Mooney, CEO of KeyCorp.
Editor at Large Penny Crosman welcomes feedback at [email protected].
