Key Takeaways
- The mayor of Australia’s Gold Coast, Tom Tate, has highlighted that residents pay council rates (local property tax) in Bitcoin.
- “It gives a message that we’re innovative and bringing in the younger generation,” Tate stated “, indicating that the proposal is still in the planning stages.
- Proponents contend that Bitcoin is too turbulent to be used for tax payments, but Tate says “the volatility is not that bad.”
Despite the market losing $2 Trillion, more than 50 percent of its overall value in the last six months, Gold Coast Mayor Tom Tate has recommended that taxes could be paid with cryptocurrency in the near term.
“Why can’t we pay interest rates on cryptocurrency if the risk is low?” Tate stated just over a week before the council is due to submit its yearly budget. “Volatility isn’t all bad.”
As the council gears up to present its annual budget on June 14, Gold Coast citizens can foresee rates to rise by at least 4%, the maximum increase in ten years.
“It sends a signal that we are innovative and appealing to the younger generation… [But] I’m not saying we don’t; I’m just saying we’re always looking for ways to improve.”
However, some commentators have argued that the fluctuation of cryptocurrency prices during a stock market crash may lessen interest in using cryptocurrency as a form of payment.
Mr Tate also revealed that the council will prefer to hire a private-sector chief investment officer to inspire “innovation” and investigate “partnerships” on council-owned land.
Before accepting cryptocurrency as payment, the committee should consider its risk appetite, according to Blockchain Australia’s Adam Poulton.
“The last thing they’d want to do is accept a $2,000 rate, keep it in Bitcoin, and halve the price of Bitcoin,” he explained.
Crypto, according to Adam Poulton, is “just another form of money” with an exchange rate tied to the Australian dollar. He explained that there is some technology, some applications, and you can accept Bitcoin as payment.
“They can choose to receive that Bitcoin and keep it for themselves, or they can exchange that Bitcoin for Australian dollars using that exchange rate and have those Australian dollars appear in their bank account.”
He suggested that council accept 95% of a rates bill in Australian dollars and the rest 5% in cryptocurrency.
The mayor’s remarks come as an increasing number of cities and nations around the globe finally allow crypto and central bank digital currencies to be used to pay local taxes and rates. Residents of El Salvador and the Central African Republic can pay their taxes in Bitcoin, as the cryptocurrency is legal tender in both countries.
Other regions that have indicated an interest in using cryptocurrencies for tax payments include the Swiss city of Lugano, Buenos Aires, Colorado, Rio de Janeiro, and the Central African Republic.
