By Emily Bamforth
Ohio will become the first state to accept cryptocurrency for tax payments, beginning this week.
Businesses can go to OhioCrypto.com to register to pay tax filings with Bitcoin, an online currency which is slowly gaining mainstream recognition. A business does not need to be headquartered in Ohio to pay in Bitcoin, but must operate in the state.
The payment system is run through Ohio Treasurer Josh Mandel's office. Mandel said in an interview that he'd like to see the system expanded eventually to allow individuals to pay their taxes in Bitcoin, as well as in other forms of cryptocurrency. He also said he's confident the initiative will continue when he leaves office due to term limits at the end of the year, having discussed it with State Rep. Robert Sprague, who was elected to the treasurer's office in November.
"I believe that if Ohio wants to be a leader in the technology economy, we first have to be a leader in technology," Mandel said. Mandel announced the initiative in a Wall Street Journal article that published on Sunday.
In a statement, Sprague praised Mandel's effort, but was noncommittal about whether he'd keep or expand it once he takes over the state treasurer's office in January.
"We applaud the pilot that makes Ohio more business-friendly and sets us up as a leader in cryptocurrency. We will evaluate both currency and counter-party risk once we enter the office to see about the future," Sprague said.
Bitcoin, created nearly a decade ago, is volatile; the cryptocurrency caught national attention in 2017 when its value spiked before peaking in December 2017 at nearly $20,000 per unit. In 2018 the value began to drop. And in the past week, Bitcoin has lost a third of its value, dropping below $4,000 on Saturday.
But the treasurer's office will run tax payments through payment processor Bitpay, which sets the Bitcoin exchange rate for a 15-minute allotted time window for each transaction. The site assumes the risk of any market fluctuations during that window, Mandel said. Each payment under OhioCrypto.com will include a 1 percent commission, compared to the 2.5 percent fee the state treasurer's office charges for credit card payments.
The state program's launch coincides with Solutions, a four-day conference in Cleveland that begins on Saturday. The event will focus on blockchain, the technology that powers cryptocurrency as well as other wide-ranging forms of digital record keeping. The conference was organized following months of advocacy from Bernie Moreno, a Cleveland businessman who has invested in blockchain-based businesses, as well donated to Mandel and other Republican politicians.
Moreno said in an interview he discussed the initiative, called "Blockland," with Mandel over the summer.
"It's not an earth-shattering idea that you can do this, but it's just another signal to the outside world that Ohio (is becoming) a leader in this technology," he said.
Moreno already accepts cryptocurrency, including Bitcoin, at his luxury car dealerships. There's been a push by Moreno's blockchain group, called "Blockland," for downtown businesses to accept cryptocurrency ahead of the conference. Moreno's advocacy caught the attention of Republican leaders in Columbus -- in August, Republican House Speaker Ryan Smith expressed interest in exploring how to incorporate blockchain into state government functions, and incoming Lt. Gov. Jon Husted is scheduled to speak at the conference on Sunday.
The cryptocurrency announcement breaks a long quiet period for Mandel. He's kept an uncharacteristically low public profile since he dropped out of the U.S. Senate race last January, citing personal issues. Mandel said Monday that he's spent recent months focusing on "keeping his head down" as he focuses on his job duties, as well as developing and launching the cryptocurrency site. He also declined to share his future political plans, although in August he formed a federal campaign committee that appeared to lay the groundwork for a future run for office.
"This initiative has taken up an outsized portion of my time," he said. "You know, I've sort of taken it up as my baby, and wanted to make sure it was built the right way and launched the right way."
(c)2018 Advance Ohio Media, Cleveland