Governments are understandably skeptical about cryptocurrencies. After all, by their very nature cryptos aren’t backed by state institutions, making them impossible to directly control through banking policies and traditional financial rules. Cryptocurrencies are also notoriously unpredictable, and if there’s one thing governments don’t like in their tax payments, it’s price volatility. And yet, there’s also a growing sense among innovation-loving politicians and government insiders that cryptocurrencies are the inevitable next step in commerce. To stay ahead of the curve, they need to experiment with the possibilities cryptocurrencies present.
Here are five places where you can use cryptocurrencies to render payments to the local authorities.
1. Zug, Switzerland: In 2016, the Swiss town of Zug announced a pilot program that would allow its citizens to use bitcoin and other digital currencies to pay for public services. A few months later, this pilot program was made permanent thanks to the “unprecedented international media echo” the town received. The program is limited government fees and services of less than 200 Swiss Francs (roughly $200), and does not extend to tax payments. Other Swiss cities soon took notice, with the nearby town Chiasso adopting Zug’s model in 2017.
2. Seminole County, Florida: In 2018, Joel Greenberg, the recently elected Tax Collector of Seminole County, made national headlines when he announced that his agency would soon begin accepting bitcoin for property tax payments and other state fees. When questioned about bitcoin’s notoriously unpredictable exchange rate, Greenberg clarified that Seminole County would actually be partnering with BitPay for these transactions, and that all fees would be settled in U.S. dollars.
3. Ohio, USA: Businesses in Ohio now have the option to pay most state taxes and fees using BTC and BCH, making the Buckeye State one of the most cryptocurrency friendly governments on the planet. Ohio launched the program in 2018 with the aim of attracting tech-focused businesses to the region. Crypto-savvy businesses must register with the state’s OhioCrypto program to participate, with all cryptocurrency payments being processed by BitPay. Ohio may not be the only crypto-accepting state for long, however, as governments in New Hampshire, Arizona, and Georgia have proposed similar tax-payment frameworks in recent years.
4. Innisfil, Ontario: The Canadian town of Innisfil announced in May of 2019 that it would accept tax payments in bitcoin — and perhaps expanding to LTC, ETH, XRP and others — as part of a one-year pilot project. The payment experiment came through a partnership with the Toronto-based payment processing firm Coinberry Limited.
5. Venezuela: Few cryptocurrency projects have been as controversial as the Petro, Venezuela’s government-backed token. Originally created as a tool for skirting U.S.-backed financial sanctions (as well as a means of pushing back on the country’s crippling inflation rate, which was around 930,000% in 2018 according to the IMF), it remains unclear if anyone is actually using the Petro. In 2018, however, Venezuela’s President, Nicolas Maduro, issued a proclamation that all government agencies must accept the new token for payments. Given that the country’s economy is still in freefall, and that no Petro tokens have been issued to the public, Venezuela’s cryptocurrency-friendly status is entirely theoretical.