Technology

Ohio Won’t Let You Buy Beer With Bitcoin

The decision represents the first prohibitive action against the digital currency.

National Journal
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Dustin Volz
April 28, 2014, 11:21 a.m.

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.

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