You may soon be able to pay fees, taxes in Ohio with cryptocurrency like Bitcoin

COLUMBUS, Ohio — Ohioans are getting closer to being able to pay their taxes in cryptocurrency. A new GOP proposal lays the groundwork for digital tokens to become more mainstream.

With the stock market’s volatility, investment experts suggest diversifying your portfolio. Ohio politicians are trying to give more incentives for that, too.

"We are authorizing the use of cryptocurrency as just another way to keep up with the current practices that are generally accepted by the American public and by the people of the state of Ohio," State Treasurer Robert Sprague said.

Sprague and Secretary of State Frank LaRose are trying to show the state is "an innovative leader," eventually allowing Ohioans to use it to pay for state fees and services, like taxes.

The pair is proposing that state agencies be allowed to accept crypto, but it is not mandatory.

Although it could eventually get to taxes, it would start slower with just the secretary's office, meaning business filings.

Hear more about the proposal in the video below:

"My office is prepared to be the first in state government to begin accepting Bitcoin and to do so immediately," LaRose said.

So, what exactly is cryptocurrency?

"It's peer-to-peer digital currency, and it's outside of an independent central governing authority," CWRU Veale Institute for Entrepreneurship's Michael Goldberg said.

The professor explained that the online “coins” are stored in a digital database known as a blockchain. Like stocks, they can be traded and sold. One Bitcoin, the largest cryptocurrency, fluctuates and is worth more than $94,000 as of 6 p.m. on Friday.

"Oftentimes with Bitcoin, there are less fees associated with it," he said.

Two other crypto proposals are being heard in the Ohio House, one trying to make sure that fees stay low. Both sponsored by state Representative Steve Demetriou (R-Bainbridge Twp.), one bill would "protect" cryptocurrency from putting certain taxes on cryptocurrency. The other would allow the treasurer to invest in "high value digital assets" in the general or reserve fund.

But because crypto spikes and falls rapidly, Goldberg warned that payments could be hard to calculate.

Government accountability advocate Catherine Turcer, with Common Cause Ohio, said this isn’t safe for the state’s finances.

"It is electronic money, anything could happen to it," Turcer said. "Whether it's hacking, deflation — when you pay on April 15 your taxes, and it nosedives on the 16 — it's just too volatile."

The treasurer explained that their system would immediately change the currency format once submitted.

"Our mission here is to have a thoughtful, safe and secure process for accepting this cryptocurrency and converting it immediately into United States dollars for the state treasury to hold," Sprague said.

In 2024, the FBI reported $9.3 billion in losses due to cryptocurrency cybercrime.

There will always be financial fraud, Goldberg said, but when it's online, it's much more difficult to get back.

"Crypto is still a bit of the wild, wild west; it's basically completely deregulated," he said. "If somebody gets defrauded, it may be a bit more challenging for them to recoup their assets."

It's too risky, Turcer continued.

"Money is worth the money we say it's worth," she said.

Bitcoin is based on the dollar's price, Goldberg said.

"When it comes to the volatility of the stock market right now — do you feel like this is undermining the US dollar — by putting Bitcoin forward?" I asked the pair.

After taking several seconds to think, Sprague answered no.

"Having a digital asset like Bitcoin really doesn't have anything to do with necessarily the value of the dollar," he answered. "The number of dollars is fixed. Just because you're allowing a transaction to occur in Bitcoin and then converting it to dollars will do nothing in terms of the strength or the weakness of the United States dollar."

Flashbacks

This isn't the first time the treasurer's office tried to make crypto work.

Back in 2018, then-Treasurer Josh Mandel decided that Ohioans could pay their taxes in crypto. Within a year, the program was suspended because Attorney General Dave Yost issued an opinion that Mandel didn't follow correct protocol in setting up the system.

"We'll have a real process to this," Sprague said in the press conference. "We'll have a transparent process."

Turcer is also getting reminded of the early 2000s, she said.

"We had alternative investments," she said, referencing Coingate. "We were investing in rare coins — and you know what? The state of Ohio got ripped off."

Coingate was a scam in which the Ohio Bureau of Workers' Compensation invested hundreds of millions in "rare coins." The investments were run by people aligned with the Ohio GOP. This eventually led to millions of dollars being lost and Gov. Bob Taft being the first Ohio governor charged with a crime while in office.

Crypto isn't random, Goldberg said, and that it's been around — and profitable — for years. According to Forbes, the global cryptocurrency market cap is more than $3 trillion.

"When Bitcoin came out, I think there were a lot of questions," Goldberg said. "And it's held up."

Why now?

"Do either of you — or any members of your staff — own any assets in cryptocurrency or invest in any cryptocurrency-related companies?" I asked both Sprague and LaRose.

"I wish," Sprague laughed.

He continued by saying that he didn't own or invest in crypto.

"I do," LaRose said. "I'm somebody that has been curious about this technology and this form of currency for a long time."

He referenced that this will all come out in his financial disclosure documents that are filed in May.

"I think at this point I own like $10,000 worth of Bitcoin that I've been able to amass by putting a little bit of my paycheck aside each month," he said.

I requested his previous disclosures, in which none of them showed any crypto investments explicitly. He had only started investing in 2024, his team told me Friday.

LaRose isn’t the only politician who owns crypto and promotes it. President Donald Trump released his own coin, which just got a boost in the market since he offered off a private dinner with him to the coin's largest investors.

"It is interesting that he’s proposing this — it both curries favor with the president and could actually make him richer," Turcer said. "The more people participate in the Bitcoin system, the more the value raises."

The secretary argued that this is just to move the state forward.

"Ohioans have accepted this as a real form of currency, a form of exchange that they want to use," he said.

Ohio gubernatorial candidate Vivek Ramaswamy is also a big fan of the currency. Both LaRose and Sprague have been on the campaign trail with him.

"How does this play into both of your interests in being his lieutenant governor?" I asked the pair, who chuckled.

"This is something that we're working on, together, through our respective offices, to modernize our offices and make it easier for the people of the state of Ohio... So this is something we're doing internally," Sprague said, noting he hadn't talked to Ramaswamy about it. "We're not doing this on the campaign trail."

LaRose was less enthused with the question.

"I'm not gonna dignify any speculation about who Mr. Ramaswamy may or may not pick as his running mate," LaRose said, also saying he hadn't spoken to the candidate about his proposal. "The reason I'm supporting him is because I appreciate his intellect and his policy stances and if this is something that he's a fan of as well, that doesn't surprise me."

The Board of Deposit, which includes Sprague, Yost and Auditor Keith Faber, will meet in the coming weeks to review the proposal.

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