Bitcoin can buy many things, but beer is not one of them.
That's the determination the Ohio Department of Public Safety made last week, marking what is presumed to be the first prohibitive maneuver against the increasingly popular digital currency.
"Bitcoin cannot be accepted as payment for alcohol in the state of Ohio," a department official told the Cleveland Plain Dealer. The state agency said it views bitcoin as too volatile, adding that it is "not recognized as legal currency."
The action is a blow to plans to create a "Bitcoin Boulevard" next month in Cleveland, where a number of local businesses will start accepting the decentralized virtual currency, which can be exchanged for traditional dollars or spent at a growing number of online and brick-and-mortar vendors. The merchants, consisting mostly of restaurants, said they saw bitcoin as an inventive way to attract new customers.
Its supporters say bitcoin and its cousins are a fast, innovative way to pay for goods and services while avoiding fees typically associated with online transactions. Skeptics see it as an easy and anonymous way to engage in money laundering or drug trafficking.
The IRS last month said it will treat bitcoin as property, not currency, on federal taxes. In response, Rep. Steve Stockman of Texas said he had plans to introduce a bill that would effectively reverse that determination.
Other states, such as Florida and Massachusetts, have issued consumer advisories in recent months that warn of potential risks associated with virtual currencies. Ohio's decision, however, is believed to be the first to expressly ban bitcoin use on a commodity.
When Bitcoin Met Congress
This article appears in the April 29, 2014 edition of NJ Daily.
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