Arizona Considers Making Bitcoin Legal Tender

A state senator in Arizona has introduced a bill to make bitcoin an official state currency

article-image

Arizona State Senator Wendy Rogers (R., District 6). Source: Wendy Rogers

share

key takeaways

  • An Arizona legislator is hoping to make bitcoin a transactional currency in the state
  • Federal law makes it difficult for states to legalize currencies other than the dollar

A state senator in Arizona has introduced a bill that would make bitcoin legal tender in the state — although federal law could complicate things. 

Arizona State Senator Wendy Rogers (R., District 6) introduced the bill, which seeks to add a statute to Arizona law making bitcoin a legal currency, on Tuesday. There was a second reading on the senate floor Wednesday. If and when a vote might take place has not yet been disclosed. 

The US Constitution might make passing the bill a challenge, though, cryptocurrency law experts say. 

“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, states tried to work around the Coinage Clause by issuing their own “state bank notes,” but they had little success. In the National Bank Acts of 1865 and 1866, Congress effectively put an end to the practice by placing a 10% tax on payments made in currency other than national bank notes. 

“Aside from the legality though, it begs the question of whether digital assets are actually ‘currencies’ or forms of ‘money,’” said Steve Gannon, attorney at Murphy and McGonigle. “In addition, for what purposes would Arizona be accepting digital assets as ‘legal tender?’ If it is simply another method of payment with respect to state contracts, that may be a limited use case that is worth an experiment.” 

Even if the bill becomes law in Arizona, it’s unlikely to have much impact on usage of bitcoin in the state, Byrne said. 

“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 the bill follows Rogers’ promise to make Arizona a crypto-friendly state. In September 2021, she was appointed to the Blockchain and Cryptocurrency Study Committee, she announced on Twitter

The committee consists of members from the Arizona state House and Senate as well as digital asset industry members and advocates. The group seeks to “review data on the scope of blockchain and cryptocurrency throughout the country” and determine how the technology can play into Arizona’s existing financial infrastructure, according to government documents

Senator Rogers’ office did not immediately respond to Blockworks’ request for comment.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png

Research

With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.

article-image

Launching cryptocurrencies the old fashioned way may soon make a return

article-image

Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug

article-image

NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.

article-image

EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down