Ohio’s treasurer talks up bitcoin tax payments, transparent government, and his own future as a crypto owner
There was an atmosphere of excitement after The Wall Street Journal disclosed on Sunday that Ohio will become the first U.S. state to accept bitcoin for taxes. The mastermind behind this push is Josh Mandel, the forty-one-year-old State Treasurer of Ohio. In an exclusive interview with The Block, Mandel explains the event leading up to the decision to accept bitcoin for taxes, how he discovered bitcoin, and he views on the future of blockchain and cryptocurrencies.
Can you describe the events that led up to the decision to accept bitcoin for taxes? Tell us about the process and people involved.
I am proud to be the first state to allow taxpayers to pay in bitcoin. The reason why we decided to do this was mainly to provide taxpayers with more options and ease. We also wanted to [show] the rest of the country that Ohio is the national leader in embracing blockchain. In order to advance the technology, we have to [go first] and project Ohio as the national leader. Another reason we are doing this is because we try to create a culture that technology can make government more efficient and improve the lives of citizens. Technology is a force for good. My ultimate vision is to spark a national movement where local and state — and eventually federal — governments will accept cryptocurrencies for paying taxes. Most good ideas start at the state level.
What is the general view of bitcoin and cryptocurrencies in the Ohio treasury department?
Four years ago we launched a transparency initiative called Ohio Checkbook. I had a crazy idea to take half of trillion of spending and put it on the internet. Taxpayers have the right to know how the money is spent. My ultimate goal is to empower citizens. The launch of Ohiocrypto.com showcases our transparency initiative. I believe in leveraging technology for the democratization of finance. I think one of the reasons why there is a growing interest in bitcoin is because it empowers individuals and gives them more freedom and options. The more we can give them the freedom, the more it makes individuals big and government small.
Was there a lot of interest from businesses?
There are 11.6 million people in Ohio and I have heard in different corners of Ohio a lot of interest for paying taxes in cryptocurrencies. I think, to begin with, the usage will be small and will eventually grow. Everything is at first low usage. Initially, Ohio Checkbook was not used very much but now there have been a million searches. It takes time for awareness to build but as the awareness grows, more people will use it. In the beginning, it will be small to medium size companies, but in time, we will see even Fortune 500 companies paying taxes in cryptocurrencies.
Why did you guys choose BitPay as a payment processor?
BitPay has been very responsive and thoughtful. The treasury office did a comprehensive search for payment providers. For us, the most important thing was BitPay’s emphasis on security and then best execution in terms of the conversion price. BitPay immediately converts the cryptocurrencies for us.
Does Ohio eventually plan to hold cryptocurrencies instead of immediately converting to USD?
Right now, we don’t have any plans to hold cryptocurrencies as an asset. We’re currently happy with the process of a taxpayer using their wallet to pay via crypto and having BitPay as a payment processor to convert to U.S. dollars.
Are you only supporting bitcoin or also the other cryptocurrencies that BitPay supports?
The “Phase 1” is to allow business to pay taxes in bitcoin. But we envision the expansion to individuals and other cryptocurrencies eventually.
What is your “bitcoin story”?
About four years ago, I launched Ohio Checkbook and through that process, I really developed a passion for using cutting-edge technology to make the government more efficient and make the lives of individuals easier. Bitcoin empowers individual citizens. Around 2014, I developed an interest in crypto and now I consider myself a crypto enthusiast.
Do you own any cryptocurrencies?
I do not own any right now but there is a high likelihood it will change when I’m out of office.
“Blockchain, not bitcoin” or “bitcoin not blockchain”?
I think blockchain is an important technology; even for other use cases than payments. Over time there will be multiple viable use cases. There are already a lot of tech startups delivering innovative solutions based on blockchain. There is a proliferation of startups throughout the country. Some will make it and some won’t make it.
What do you think about the current bear market?
As a policymaker, I don’t make decisions based on short term. I make decisions on what’s good long term. We take the big picture viewpoint. In the long term, blockchain technology and cryptocurrencies are here to stay. The movement to enable taxpayers to pay via cryptocurrencies will be a movement that will grow throughout the country.
This interview has been edited for clarity.
Ohio’s treasurer talks up bitcoin tax payments, transparent government, and his own future as a crypto owner written by The Block @ https://www.theblockcrypto.com/2018/11/26/ohios-treasurer-talks-up-bitcoin-tax-payments-transparent-government-and-his-own-future-as-a-crypto-owner/ November 27, 2018 The Block