The state of Ohio
recently decided to allow businesses to pay taxes using cryptocurrencies.
However, this move has been criticized as a “PR stunt”, with skeptics
describing the move as impractical and unsustainable.
A report by The
Detroit Free Press stated that skeptics believed this would be an unsuitable
method for tax payment due to the volatile price fluctuations of bitcoin and
the lack of mass merchant adoption.
announcement is mainly a PR stunt. There is not a particular advantage in
paying your taxes with bitcoin today. The state just wants to signal that it’s
‘cryptocurrency-friend’,” said Kevin Werbach, a professor at the University of
Pennsylvania’s Wharton School of Business.
Werback, who taught
a course at Wharton called “Blockchain, Cryptocurrency, and Distributed Ledger
Technology”, believes that cryptocurrency and blockchain classes should be
included in top MBA programs across the country.
Andrew Wu, an
assistant professor at the University of Michigan’s Ross School of Business,
considered Bitcoin to be an “unattractive” method of payment due to its
volatility. Wu noted that while he does not believe that Bitcoin will be able
to gain mainstream adoption, he does think it will transform industries.
However, there are
supporters of this initiative. Cleveland car dealer Bernie Morena became the
first businessperson in the U.S. to pay his company taxes in Bitcoin through
the Ohio government portal.
and blockchain are really the next tech revolution,” said Moreno.
A few weeks ago,
Ohio partnered with cryptocurrency processor BitPay. BitPay manages payments
made in bitcoins and converts them to fiat currency. Ohio’s state treasurer,
Josh Mandel, who is a strong believer in Bitcoin as a legitimate form of
currency, was the driver of this move.
By accepting Bitcoin
as a tax payment, Mandel has set his eyes on attracting blockchain start-ups.
He has stated his belief in blockchain’s potential to make payments faster,
more secure and less expensive.
Congressman Warren Davidson
Warren Davidson even mentioned the potential of cryptocurrency to fund the
contentious proposed border wall between the U.S. and Mexico.
“Well, I’ve offered
a modest compromise called Buy a Brick, Build a Wall… that we introduced, which
lets the American people, or whomever, should choose to donate – Mexican or
otherwise – to donate to the program. You could do with this sort of, like,
crowdfunding site. Or you could even do blockchain, and you could have wall
coins. And frankly, if we get at the Treasury, you could even accept Mexican
Meanwhile, the value
of bitcoin has gone down from US$20,000 one year ago to $4,000 now. So anyone
who decides to pay in bitcoin will need to think carefully about it.
Across the Atlantic,
there is also a push for cryptocurrency as a legitimate form of tax payment.
Eddie Hughes, a conservative member of parliament, said “You’re either ahead of
the curve or you’re behind the curve. We are at a crossroads and we’re about to
determine our future – one in which taking the lead in this field could prove