Florida Governor Ron DeSantis unveiled a proposal that allows businesses the option to pay state fees with cryptocurrencies as part of the state budget for 2022.
Speaking in Tallahassee, DeSantis said that the state would be launching pilot programs to explore the use of blockchain technology for Medicaid payments and vehicle titles. The latter will run through the Department of Florida Highway Safety and Motor Vehicles. This move is his way of harnessing Florida’s growing reputation as an emerging destination for crypto investment.
DeSantis said that crypto enthusiasts have gathered in South Florida, where officials and businesses have embraced the industry. He noted that even the Miami Heat’s basketball stadium was rebranded during the pandemic as FTX Arena, after the cryptocurrency exchange platform run by billionaire Sam Bankman-Fried.
With Florida being home to one of the most crypto-friendly cities in the U.S., it helped attract a flock of start-ups and venture capitalists from San Francisco and in other parts of the country. Miami plans to provide a “bitcoin yield” by staking its own cryptocurrency – MiamiCoin – to residents. Miami Mayor Francis Suarez even plans to take his entire salary in bitcoin.
The rapid growth of Miami’s technology scene is mainly due to DeSantis’ decision not to enact strict coronavirus mandates, which attracted the many Silicon Valley residents who left California because of the state’s draconian restrictions and rising taxes.
DeSantis reaffirmed his opposition to lockdowns as cases of the omicron variant rise across the country. “In Florida, we won’t let them lock ya down, we won’t let them restrict you, we’re not gonna let them impose mandates, we’re not gonna let them close the schools. We are gonna protect your freedom to make your decisions,” he said.
Suarez, on the other hand, has used Twitter to lure more crypto businesses to the region and has advocated for cryptocurrency-friendly policies at a local level for months. Many of the steps in moving to cryptocurrency have been symbolic, but industry leaders say that the move has had an impact on crypto entrepreneurs deciding where to build their businesses.
DeSantis noted: “Our view as the state government is this is something that we welcome and we want to make sure that the state government is crypto-friendly.”
Florida is not the first jurisdiction to take steps moving forward in cryptocurrency. Wyoming has promoted legislation to lure the industry. Puerto Rico House Speaker Rafael Hernandez has said he would be meeting with blockchain leaders on the Caribbean island about using the technology to add transparency and accountability to transactions with the public sector.
Back in 2018, Ohio became the first state to let taxpayers make payments in digital assets, but the program was suspended a year later as it didn’t meet the state’s standards.
The Florida announcements, meanwhile, came as part of DeSantis’ planned $99.7 billion budget for next year. In his plan, DeSantis will be accepting cryptocurrencies like bitcoin for three programs. The three pilot programs will amount to only $700,000 in the nearly $100 billion budget, but they could be expanded in the future.
If the proposal passes, Florida will have three different crypto programs: $250,000 to allow people to pay for vehicle titles with cryptocurrency, $250,000 to the Agency for Health Care Administration to identify Medicaid fraud and $200,000 for the Department of Financial Services to allow businesses to pay state feeds in cryptocurrency.
One key thing that the state will have to figure out is how to handle taking payments for such volatile currency, where the value can change a lot within a week or a day. (Related: With banks on the verge of cutting off gun shops, will those who support the Second Amendment switch to cryptocurrency?)
Suarez noted: “The third party that settles the transaction would settle it, trade out of it, and give the city and the state cash. They have to do it on an instantaneous basis so there is no fluctuation risk.”
Kurt Wuckert, Jr., a historian at the website and media company CoinGeek, said that it is important for the state to hire someone to run the pilot program who is from the crypto world and knows how these currencies work.
“A lot of people think they know what bitcoin is and they start on the wrong path and they make bad decisions until they realize, what, why wasn’t there a manual for this thing,” he said.
The legislature is in session from January to May, with the next state budget set to begin on July 1, which means that the earliest that these programs could be a reality will not be until the second half of next year.
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