Zinger Key Points
- A previous Ohio crypto tax initiative in 2018 failed due to regulatory challenges and opposition from state authorities.
- Crypto volatility and security concerns pose significant risks to tax collection, complicating the bill's chances of becoming law.
Ohio state senator Niraj Antani has introduced a bill that would enable residents and businesses to pay their state and local taxes using cryptocurrencies like Bitcoin BTC/USD.
What Happened: While the proposed bill aims to position Ohio as a pioneer in crypto adoption, it faces a steep climb toward becoming law.
The legislation would require the state and “all local political subdivisions” to accept cryptocurrencies for tax payments. Additionally, it would permit state universities and pension funds to invest in digital assets.
Despite its ambitious goals, the bill’s chances of success are doubtful. Legislative proposals often serve to express political intentions, acknowledge support from certain groups, or signal policy direction rather than to advance into law.
“Even in the most serious legislature in the country on Capitol Hill, less than 5% of bills ever become law,” experts often note, highlighting the difficulties faced by even the most well-thought-out proposals.
Senator Antani's bill is not Ohio's first foray into the world of crypto tax payments.
Back in 2018, Ohio attempted a similar initiative with OhioCrypto.com, claiming to accept Bitcoin for tax payments.
However, that program never received the approval of the Ohio State Board of Deposits and was quickly suspended based on recommendations from the Ohio Attorney General.
Now, with Antani's re-introduction of the concept, the bill would have to overcome the same challenges and obstacles during the legislative review.
A key concern lies in the volatility of cryptocurrencies. Unlike the U.S. dollar, which provides a stable measure for taxes, cryptocurrencies fluctuate wildly in value.
This instability could create complications during tax filing or even within the short window of receiving payments, potentially exposing the state treasury to significant financial risk.
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Regulatory hurdles remain another major obstacle.
Opposition from the Ohio State Board of Deposits and the Ohio Attorney General, who played roles in shutting down the 2018 program, is expected to resurface if the bill moves forward.
Security concerns also cast a shadow over the proposal.
The crypto space has been plagued by hacks and scams, raising doubts about the safety of a system that accepts non-USD payments for tax collection.
Additionally, the debate over whether any particular cryptocurrency can hold its value, even over a brief period, adds another layer of uncertainty.
While Senator Antani sees cryptocurrencies as “vital” and hopes his bill will restore Ohio’s leadership in the crypto sector, the proposal faces an uphill battle.
It must pass through the Ohio General Assembly and secure the governor's approval. Along the way, it is poised to encounter intense scrutiny and debate regarding its viability and security implications.
What’s Next: The conversation around cryptocurrency and state policies will be further explored at Benzinga’s Future of Digital Assets event on Nov. 19.
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