Cities and crypto: Austin launches fact-finding study for crypto tax payments
According to a 2022 survey by Bitstamp, the world’s oldest crypto exchange, it will take up to a decade before crypto enters mainstream. And before it gets there, it has to win the trust of regulators and the government.
Fortunately, crypto is slowly winning governments over, one region at a time. In September 2021, El Salvador became the first country to accept Bitcoin as legal tender. Several cities in the US also made a move toward accepting crypto payments. The city of Austin in Texas is among latest, approving a fact-finding study as a first step toward Bitcoin adoption.
Austin’s fact-finding study
In March 2022, Austin’s city councilors gave their green light to launch a fact-finding study that will evaluate the feasibility of accepting Bitcoin or other cryptocurrencies as tax payments. The scope of the study includes:
- The legal implications of accepting crypto as tax payments
- The move’s impact on the economy
- The environmental impact
- The security and financial stability of the cryptocurrency
- The potential benefits of the move on public services and the residents
Austin, the capital of Texas and seat of Travis county, is home to about a million people and is one of the state’s most important cities. The fact-finding study is due on June 16, 2022, and any future move by the city will depend on the findings.
Austin officials cleared that the study doesn’t is not a sign of their support for or opposition to crypto adoption. Rather, it will help them understand the impact of the crypto initiative. As Mayor Steve Adler puts it, the city is open to fresh solutions to current challenges; crypto currency might just be one of them.
Bitcoin Use in Austin and Texas
Whatever the findings conclude, Austin is definitely abuzz with the crypto craze. Google data shows that Austin is the top Texan city in terms of search for the words “Bitcoin” and “crypto.” Furthermore, Finder.com reveals that 8% of Texans already own Bitcoin, and adoption rate could reach 14% by the end of the year.
Bitcoin Mining in Texas
Any crypto initiative by Austin city councilors may also have implications beyond crypto adoption. Outside Austin, there are bold predictions that Texas will be the Bitcoin mining capital of the world. Kevin Pan, CEO of Poolin, one of the world’s leading Bitcoin mining companies, believes that Texas will soon become the heart of Bitcoin mining, and his company wants a piece of the action. Their goal is to expand their two-gigawatt mining facility in Texas, increasing their operations four-fold.
As of March 2022, the Texas Blockchain Council lists 27 local mining companies — a number that will likely balloon in the next few years.
Other cities that approved crypto use
Austin follows a long list of US cities who have taken a step toward crypto adoption.
In December 2021, Jackson, Tennessee was the first American city to add Bitcoin to its payroll conversion options for the employees of the city. City officials say that it helps diversify the ways that employees could receive compensation. The city’s now on the hunt for third-party platforms that will convert funds to Bitcoin before releasing them to interested city employees. In addition, it might also be a good way to diversify payments to contractors, which would consequently attract more bidders.
Led by Mayor Francis Suarez, Miami seeks to increase cryptocurrency use across the city and even hopes to be a new center of digital finance. Like in Austin and Jackson, Mayor Suarez advocates initiatives that will enable people to pay fees and receive salaries in crypto. Miami also launched its own crypto asset, MiamiCoin, which according to the mayor has earned a revenue of $30 million in just three months. There are currently plans to pay a “Bitcoin yield” as a dividend to the residents.
In its quest to embrace crypto, Austin’s fact-finding crypto study is only the beginning. The city will also be hosting Consensus 2022, one of the biggest crypto events to date. Apart from discovering the possibilities of cryptocurrency, Consensus also explores blockchain, metaverse, and other emerging technologies and brings together investors, tech leaders, and policymakers.
With these huge strides, Austin is not far from being a major player in the crypto space.