Cryptocurrency enthusiasts might soon see their dreams turn into reality - all thanks to the lawmakers in Wyoming and Arizona, who are trying to put forward proposals to allow tax payment through crypto (a form of digital currency).
This new proposal, along with other proposals from around the United States, threaten to erode the key distinction that is upholding the USD supremacy over the would-be digital competitors. The key distinction being – Americans can pay their taxes in US dollars, but not in cryptocurrencies.
The Wyoming Crypto Proposal - What Does It Entail?
As per the proposal from Arizona, the state will soon recognize Bitcoin as legal tender. On the other hand, the Wyoming proposal isn’t limited to just one crypto coin for the use of sale and taxes.
Although both face potential political and legal hurdles, Wyoming has taken a step further than other states in passing the laws for accommodating cryptocurrency adoption. In fact, their proposal believes Wyoming to be the first state to take such a significant step in the realm of payment of taxes.
They also offer to help shape the future with these digital currencies, namely, veterans and big retailers of the commercial industry of banking.
Zhou Xiameng of the American CryptoFed states, “We are in search of some alternative currencies to help compete with the US dollar.”
He also plans to issue an algorithmic Stablecoin, that is a cryptocurrency with a pegged value in the consumer price index, collected for the purpose of sales tax.
The proposal is also backed by the Merchant Advisory Group (retailers that count companies like Walmart, Amazon, and the Home Depot as their members).
For retailers, a part of the appeal can be convenience as said by Wyoming Rep. Ocean Andrew. The representative of the state has also now allowed the crypto tax payments to be made automatic via digital smart contracts.
However, there are some of the backers who have grander designs with the American CryptoFed’s name, suggesting the group to compete with the Federal Reserve System.
Accepting Of Crypto For Legal Exchange: What Do The Critics And Supporters Have To Say?
The critics of open-source cryptocurrencies argue that if the coin displaces the national currencies, it will undermine the national government as well as the central banks’ ability to regulate the economy.
Adding to this, they also argue that the Americans particularly, can benefit from the dollar’s status as the world’s reserve currency.
The supporters of the banking system have expressed a skepticism on the recent state-level proposals and believe it would upset the current system, while also pointing at the potential legal and practical hurdles that can erupt in the way.
Rohan Grey, the research director of the Digital Flat, says, “I see it as much more of a stunt as compared to the genuine shakeup.”
The Arizona Proposal
The Arizona bill as per Rohan Grey, faces a rather greater risk as it seeks to designate a cryptocurrency as their “legal tender.” This, however, happens to have broader implications as compared to that of the Wyoming proposal, which is limited to only tax payments.
It is unlikely for the courts to strike down the Wyoming's proposal on the grounds of constitution because of the privately issued money. Instead, as the federal government now gears up to an extensive cryptocurrency and taxes, it could now simply be passed.
On the other hand, the crypto supporters contend that these digital currencies are pegged to the US dollar or of goods and services. This can limit the volatility and attempts that let the taxpayers pony up in crypto.
Despite the constitutional issues posed by this Arizona bill, the prospects are rather complicated by the sponsors; Wendy Rogers and Republican Sen.
In Conclusion - The Further Steps!
The representative, Ocean Andrew, plans to work with the state’s Revenue Department to introduce an updated proposal, as soon as next year. He also said he remained focused on the nitty-gritty of the sales tax proposal.
“It is a milestone, but is a niche use,” Andrew said.
- What is the difference between the Arizona and the Wyoming proposal?
As per the proposal from Arizona, the state will soon recognize Bitcoin as its legal tender. On the other hand, the Wyoming proposal isn’t limited to just one crypto coin for the use of sale and taxes.
- Why do the Arizona proposals seem to have broader implications?
The Arizona bill faces a rather greater risk as it seeks to designate a cryptocurrency as its “legal tender.” On the other hand, the Wyoming proposal isn’t limited to just one crypto coin for the use of sale and taxes.
Disclaimer: Crypto is a very risky space, a lot of spams are noticed around this and a thorough due diligence is needed while looking at the same for investment.
Sandra Janet is a full-time writer and crypto enthusiast with an experience of over 7 years of guest content writing for blogs and websites around the world. She was born in the UK but has lived most of her life in Australia. When not neck-deep in reading a book or writing, she can be found making plans for her next hike, brewing a cup of coffee, looking up the nearest bookstore, and spending time with her cat.