Blockchain is being considered in statehouses around the country as its benefits become more widely understood. Distributed ledger systems can be useful to state and federal governments because they can improve transparency, secure data, streamline recordkeeping processes, and perform many other functions. Following the trend of state governments looking to capitalize on these benefits, the Arizona Senate has passed a bill allowing taxes to be paid in cryptocurrencies.
If the bill passes the House of Representatives, Arizona will become the first state to accept cryptocurrencies, beginning in 2020. According to Arizona Rep. Jeff Weninger, the purpose of the bill is to make Arizona “the place to be for blockchain and digital currency technology in the future.” The tech industry’s emerging focus on blockchain development might attract businesses to states that support that ambition, and accepting tax payments in cryptocurrency is a great way for Arizona to demonstrate that support.
Wyoming has introduced crypto-centric bills for similar reasons. By exempting cryptocurrencies from various money transmitter and securities laws, blockchain-based businesses would be able to operate more effectively in the state. Another bill seeks to do away with much of the paperwork related to things like titles, deeds, and receipts.
The state of Illinois is also experimenting with blockchain, specifically with regard to birth certificates—because in theory, individuals can have better ownership of their identities if they are cryptographically secure. While this kind of innovation comes with potential problems of its own, state governments and the people they serve have much to gain if blockchain technologies are successfully implemented.
Arizona, Wyoming, Illinois, Colorado—all of these states hope that their support of blockchain technologies improves their everyday operations as well as the civic lives of their people. The industry is constantly developing, and although there are countless benefits to realize, there are plenty of risks that will have to be foreseen and overcome. But as more states warm to the idea that blockchain is a valuable tool, the more quickly we may see successful innovation.
Featured Image: Arizona State House Chamber by Wikimedia Commons, Wikimedia Commons