Ohio’s recent decision to allow businesses to pay taxes using bitcoin has fueled criticism that the move is a gimmicky “PR stunt” that’s impractical and unsustainable.
Skeptics say bitcoin’s volatile price fluctuations and the lack of mass merchant adoption makes crypto an unsuitable method of payment, the Detroit Free Press reported.
“The Ohio announcement is mainly a PR stunt,” said Kevin Werbach, a professor at the Wharton School of the University of Pennsylvania.
There is not a particular advantage in paying your taxes with bitcoin today. The state just wants to signal that it’s ‘cryptocurrency-friendly.’
As CCN.com reported, Werbach taught a class last semester at Wharton called “Blockchain, Cryptocurrency, and Distributed Ledger Technology.”
Werbach joins a growing list of business-school professors who believe that top MBA programs should offer coursework in cryptocurrencies and blockchain because crypto is here to stay.
However, for now, some say that paying taxes using bitcoin isn’t practical.
Andrew Wu, an assistant professor at the University of Michigan’s Ross School of Business, said bitcoin’s break-neck volatility makes it an “unattractive” payment mechanism.
Accordingly, he does not believe that bitcoin will gain mainstream adoption as a way to pay for goods and services. However, Wu said blockchain is a game-changing innovation that will reshape entire industries.
Meanwhile, Ohio car dealer Bernie Moreno paid his business taxes using bitcoin in November 2018, and thinks the trend will gain traction in the near future.
“Digital currency and blockchain are really the next-tech revolution,” said Moreno, who recently sold three cars to entrepreneurs who paid for their purchases in bitcoin. Two of the vehicles he sold were Porsches, and the other was an Astin Martin.
Ohio is the first state in the United States to accept crypto to pay business taxes. The state government partnered with crypto payment processor BitPay to manage the payment in crypto and conversion to dollars, as CCN.com reported.
The idea is the brainchild of Ohio’s Republican state treasurer, Josh Mandel, who says bitcoin is “a legitimate form of currency.”
Across the pond in the United Kingdom, a member of the British Parliament pointed to Ohio as an impetus for why UK residents should pay their local taxes using bitcoin, as CCN.com reported.
Eddie Hughes, a conservative MP (member of Parliament), said this would be an excellent first step toward mainstream adoption of crypto.
“You’re either ahead of the curve or you’re behind the curve,” Hughes said. “We are at a crossroads and we’re about to determine our future – one in which taking the lead in this field could prove very beneficial.”
Featured image from Shutterstock. Werbach photo from LinkedIn.