Ohio Treasurer and former U.S. Senate candidate Josh Mandel, who has kept a low-profile for nearly a year, burst back into the headlines with an unusual announcement this week: Ohio would be the first state in the nation to let businesses pay their taxes with Bitcoin, a cryptocurrency that isn’t backed by any government or bank.
“This launch of OhioCrypto.com is part of a broader initiative to leverage modern technology to make it easier to interface with state government,” said Mandel, a Republican who is nearing the end of an eight-year run as treasurer. He made the announcement Monday in conjunction with the upcoming Cleveland Blockland Conference, which focuses on the block chain technology that enables cryptocurrencies.
The new system, which went live on Monday, will give taxpayers more options and “project to the rest of the country that Ohio is the tip of the spear leader in block chain technology,” Mandel said. Twenty-three different taxes — sales, tobacco, withholding and others — are eligible for payment using the new program.
Treasurer-elect Robert Sprague, though, isn’t making any promises that he’ll continue the project. Safety of Ohio assets will be paramount, he said.
“We’ll have to look at the risks when we take office on the 14th (of January) and determine the future of the program,” he said. “We’ll have to look at the risk profiles for these transactions. I’m looking forward to taking a hard look at it.”
Bitcoin is an unregulated crypocurrency, or a digital token, created a decade ago. There is no physical coin or paper and it’s not controlled or backed by any government or bank. Bitcoin transactions are recorded using a distributed ledger on a peer-to-peer network that uses blockchain technology.
However, on the day Ohio’s new system went live, the Wall Street Journal reported that Bitcoin currency lost nearly a third of its value in seven days and is down 80 percent from its peak in late 2017. The Journal called those seven days “the week from hell” for the cryptocurrency.
The Mandel administration notes that the state treasurer’s office won’t hold cryptocurrency at any time. Payments made through OhioCrypto.com will be processed by BitPay and converted to dollars before being deposited into state accounts. Payments through OhioCrypto.com will be assessed a 1 percent fee, which will go to BitPay, Mandel said.
Sprague said he isn’t certain which businesses will want to pay taxes using cryptocurrency but he praised Mandel for coming up with the idea.
“I think it’s good that they’re running through the tape and continue to make improvements in the office through the end. I think that’s a good thing,” Sprague said.
Mandel said he is working with Sprague on his transition to state treasurer: “I’m a big Robert Sprague fan and I think he’s going to do a great job and build upon our successes and find new ones.”
Mandel shocked the political world in January when he abruptly announced he was bowing out of the GOP primary for U.S. Senate, citing his wife’s health. Josh and Ilana Mandel’s three children were all under age 5 at the time. At the time he was aiming for a rematch against Democrat incumbent Sherrod Brown.
After he dropped out of the race, Mandel’s public appearances, including on social media and at press conferences, trailed off. Mandel, 41, said he is uncertain of his next career move after he leaves office in January.
“It’s all TBD,” he said.