Recently, a Louisiana resident paid a fine to the state's Department of Wildlife and Fisheries. While this isn't necessarily news, the fact that the fine was paid using Bitcoin's Lightning Network is.
Louisiana has become the first state to accept cryptocurrency payments for all state services. The state has been taking a more crypto-friendly stance this summer, passing a “Bitcoin Rights” bill that recognized citizens’ rights to use Bitcoin as a means of payment, banned central bank digital currency issuance, and provided legal protections for home-based digital asset miners.
“By introducing cryptocurrency as a form of payment, we're not just innovating,” Louisiana Treasurer John Fleming said in a statement. “We're providing our state's residents with flexibility and freedom when interacting with state services. This unique innovation protects our state from any volatility related to cryptocurrency.”
The state's finances are protected from cryptocurrency volatility, as payments are converted into dollars before being deposited in government accounts. The state does not process cryptocurrencies directly, even if citizens pay with them. This process is facilitated by Bead Pay, which allows third parties to integrate cryptocurrency payments into their e-commerce payment platforms without having to adapt to new collection methods.
Cryptocurrency Testing
Other states are also experimenting with incorporating cryptocurrencies into their payment processes, and Louisiana's example could inspire further innovation.
“Other states will undoubtedly follow Louisiana's lead,” said Joel Hugentobler, a cryptocurrency analyst at Javelin Strategy & Research. “Payments that leverage an open-source public ledger are more transparent and less susceptible to fraud. Fleming is absolutely right that government systems must evolve and embrace new technology. States that don't will be left behind.”
Ohio began accepting cryptocurrency tax payments through the state's platform, OhioCrypto.com, in 2018. However, the Attorney General declared that the program was halted because the state Treasurer lacked the authority to operate the program and had not gone through the required bidding process for payment processors.
In 2022, Colorado and Utah announced they would accept cryptocurrencies for tax payments. State legislatures in Arizona, California, Hawaii, Illinois, New York, Oklahoma and Wyoming have also introduced similar proposals, but none have passed in those states yet.
