An Arizona legislator hopes to make Bitcoin a transactional currency in the state. However, federal law can complicate things.
Arizona considers making Bitcoin legal tender
Arizona State Senator Wendy Rogers (R., District 6) introduced the bill, which seeks to add a statute to Arizona law to make Bitcoin legal tender. There is a second reading on the upper floor of the senate. If and when a possible vote could take place has yet to be revealed.
However, crypto law experts say that the US Constitution could make passing the bill a challenge.
“The Coinage Clause of the Constitution means that the power to determine what is and isn’t legal tender in the United States is the exclusive province of Congress,” said Preston Byrne, partner at law firm Anderson Kill. “If enacted, the bill would be largely symbolic.”
In the 1800s, the states tried to settle the Mint Terms by issuing their own “state banknotes,” but they were unsuccessful. In the National Bank Acts of 1865 and 1866, Congress effectively ended this practice by levying a 10% tax on payments in currencies other than national banknotes.
Even if the bill becomes law in Arizona, Byrne said, it won’t have much of an impact on bitcoin usage in the state.
“Arizona could certainly pass a law like this, and the state government could choose to accept bitcoin as payment for Arizona taxes, but this would not change the legal treatment of Bitcoin as property from a federal tax perspective,” said Byrne. “I also don’t think such a law could obligate Arizonans to accept bitcoin in a constitutionally acceptable way.”
The introduction of this bill follows Rogers’ promise to make Arizona a crypto-friendly state. In September 2021, she was appointed to the Blockchain and Cryptocurrency Research Committee, she announced on Twitter.
The committee includes members from the Arizona State House and Senate and members and advocates of the digital asset industry. The team seeks to “review data on the scope of blockchain and cryptocurrency around the country” and determine how the technology could work into Arizona’s existing financial infrastructure.
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