Uncategorized

Arizona Bill Aims to Make Bitcoin Legal Tender

The bill, however, may face trouble on constitutional grounds.

Key Takeaways
  • A bill recently put forward in Arizona aims to turn Bitcoin into a form of legal tender within the state.
  • The bill is unlikely to succeed, as the U.S. constitution seemingly prevents states from declaring assets legal tender.
  • The bill was put forward by Senator Wendy Rogers, a politician recently placed at the top of an extremist rhetoric list.

An Arizona senator has put forward a bill that aims to turn Bitcoin into legal tender in the state.

Bill Intends to Amend Arizona Statues

The one-page filing, numbered SB1341, would amend Arizona Revised Statutes to include Bitcoin as a form of legal tender.

The filing mentions Bitcoin specifically without referring to other cryptocurrencies, calling it the “decentralized peer-to-peer digital currency…maintained on the Bitcoin blockchain.”

It also draws attention to Bitcoin mining, noting that “new units … are generated by the computational solution of mathematical problems” and notes that Bitcoin works apart from central banks.

In the section of the amendment listing types of legal tender, Bitcoin is listed fourth. Existing types of legal tender include any medium of exchange authorized for debt payments, coins issued by the government, and other types of coins with precious metal content.

Bill Unlikely to Succeed

Some have suggested that the bill is unlikely to succeed for legal reasons. Article I, Section 10, Clause 1 of the U.S. Constitution explicitly prohibits states from declaring assets legal tender except gold or silver coin: “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts,” the document reads.

In addition to possible legal issues, the reputation of the senator behind the bill could trouble its passage. The bill was put forward by Senator Wendy Rogers, a far-right politician recently placed at the top of an extremist rhetoric list. As such, the bill may not gain large support given her other fringe views.

More broadly, the United States does not consider Bitcoin legal tender. The IRS considers Bitcoin and other cryptocurrencies a “medium of exchange, a unit of account, and/or a store of value…[that] does not have legal tender status in any jurisdiction.”

Outside of the United States, El Salvador became the first country to adopt Bitcoin as legal tender in September 2021. It is unclear if Rogers’ proposal was motivated by this decision.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.