Arizona has recently introduced a bill that would make it the first state in the U.S. to make Bitcoin legal tender. In the proposed bill, Bitcoin is defined as the “decentralized, peer-to-peer digital currency in which a record of transactions is maintained on the Bitcoin blockchain and new units are generated by the computational solution of mathematical problems and that operates independently of a central bank.”
If this legal tender bill were to pass, then it would give Bitcoin the same status as the U.S. dollar in Arizona. Bitcoin could be used to pay taxes, debts and as a commercial medium of exchange. This move is similar to what El Salvador did when it became the first nation in the world to recognize Bitcoin as legal tender. However, El Salvador’s plan to buy Bitcoin every day has not exactly been paying dividends. The Country’s Bitcoin reserve has lost much of its value due to the volatility of the currency. Despite this, the country’s president has stated that he will not move away from Bitcoin but rather double down on his position by buying even more.
Even with El Salvador’s troubling start with its recognition of Bitcoin, Bitcoin’s overall decline in value in the last two years, and a constant cycle of negative news surrounding cryptocurrency (yes I am talking about FTX), Arizona seems to be determined on becoming the first state to make its claim on the digital currency. It will be interesting to see if this bill can grow some legs and get passed. At this point it is not a matter of if a state will adopt Bitcoin as legal tender, but when.
