The New Hampshire House of Representatives has declined to pass Bill HR522, legislation that would require the state treasurer to create a method for accepting bitcoin transactions from voters paying their taxes and government service fees.
The digital, peer-to-peer currency that is only governed by its online actors and miners is considered by a growing community of users as superior to currency because it doesn’t have to be managed by governments and big banks. Currently, it is designed to be limited to 21 million bitcoin that will slowly be created theoretically until mid-century. Discussions are ongoing on what will happen after that.
The very nature of the currency has made it both popular and disconcerting depending on who you talk to. If a state decides to rely on a third party to facilitate transactions for the tax payments using Bitcoin, opponents were concerned about their low liquidity. Darryl Perry of the New Hampshire Liberty Party gave a slippery slope argument about if there was no way to manage the value of a bitcoin in a traditional, centralized fashion, that other items could be used for currency – so the eventual transaction will move us back to bartering and, therefore, the need for currency?
Those supporting tax payments using bitcoin said that because it is the government’s responsibility to make it as easy as possible for citizens to pay their taxes, it was important to look at all options, including the digital currency. The opponents were focused on bitcoin fluctuating market prices and, since this type of transaction has never been used before, they suggested that it should be deemed “ineligible to legislate.”
What all the arguments really boiled down to is actually reflected on Eric Schleien’s original perspective on his own bill; that he did not create HR522 and imagine that it would be fully embraced by the establishment, but that it was a sort of jumping off point to bring a new level to currency debate. While the news of investment risk, interest rates, bull vs. bear, and market downturns, we should consider all options, whether we actually bring them in to everyday governance or not. He said that he would keep promoting this discussion and keep writing new bills until New Hampshire is ready to accept bitcoin for government taxes and fees. He is confident that managing payments will not incur a cost to the state and would be risk free for the government, so it is an idea worth exploring until its right.
Across the pond, Germany and Frances are discouraging the European Union Commission from allowing any form of cryptocurrencies like bitcoin. They base their argument in concerns that the anonymous nature of bitcoin will open more doors to money laundering operations and another way to finance terrorism – but proponents of bitcoin argue that the lack of traditional personal information storage makes bitcoin the better option.
As the old line goes, the only reason a government does anything is if it is popular enough and the finances for it can be worked out without losing that popularity. Since it is an entirely new system of currency, there is going to be a long road of discussions, debates, and arguments made to either make taxes payable by bitcoin or the idea dies out. That will depend a great deal on how open people are to the possibility. It also steps on a lot of toes in the banking business and traditional sources of political campaigns. Considering how the cogs of the nation’s machine can slow down when there is a bitter disagreement that this could become, it is best to act like Eric Schleien and prepare to bide your time. This is going to take a while.