Arizona Aims to Be Most Crypto Friendly State with Trio of Proposed Bills

In the last couple months, Arizona Senator Wendy Rogers has introduced three bills aimed to make Arizona the most crypto-friendly state in the U.S.

The first, Senate Bill 1341 proposes to add Bitcoin to Arizona’s definition of legal tender. However, this bill is likely to run into legal trouble given that Article I, Section 10, Clause 1 of the U.S. Constitution prohibits states from declaring assets other than gold or silver coin as legal tender: “No State shall . . . make any Thing but gold and silver Coin a Tender in Payment of Debts . . . .”

The second, Senate Bill 1127 would permit Arizona to accept cryptocurrencies for taxes, fees, rents and fines, among other categories of payments due and owing to the State. Cryptocurrency is defined to mean “any form of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of monies, operating independently of a central bank.” The definition explicitly includes Bitcoin, Ethereum, Litecoin and Bitcoin Cash.

The third, Senate Bill 1128 proposes to make “virtual currency” exempt from taxes. Virtual currency is defined as “a digital representation of value, other than a representation of the United States Dollar or a Foreign Currency, that functions as a unit of account, a store of value or a medium of exchange.”

Regardless of whether any or all of the bills pass, the effort is indicative of the challenges states face in responding to growing cryptocurrency adoption.

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