Australian Mayor downplays crypto volatility, recommends it for rates payments

Tom Tate, the Mayor of Gold Coast, Australia, has suggested that cryptocurrency could be used by residents to pay local taxes in future years, though critics have flagged volatility and the recent market crash as a cause for concern. 

"Why can't we pay rates on cryptocurrency if the risk is not high?" said Tate, speaking to local media outlet ABC News on June 5, just over a week before the council is due to hand down its annual budget. "The volatility is not that bad.”

Tate was elected as Mayor of the Gold Coast, Australia’s sixth-largest city in 2012, and has proven a popular choice since then, as he was re-elected for a second term in 2016 and a third term in 2020. He added that the move hasn't been confirmed but they were looking ahead. 

"It sends a signal that we're innovative and bring in the younger generation ... [but] I'm not saying we're doing it, I'm just saying we're always looking at the next level.”

However, critics have argued that the price volatility of cryptocurrencies amidst a market crash could dampen enthusiasm to take crypto as payment.

Speaking to ABC News, Blockchain Australia’s Adam Poulton noted that the council would need to look at its risk appetite before deciding to take cryptocurrency as payment.

"The last thing they'd want to do is accept $2,000 worth of rates, hold it in Bitcoin, and for the Bitcoin price to halve," he said.

The Mayor’s comments come as an increasing number of cities and countries across the world have started to consider allowing crypto and central bank digital currencies to be used to pay local taxes and rates. 

Related: Aussie banks ANZ and NAB won’t ‘endorse’ retail speculation on crypto

In April, the Bahamian prime minister Philip Davis announced plans to allow residents to pay taxes through the use of the country’s central bank digital currency (CBDC), the Sand Dollar.

In the same month, it was revealed that residents in three major Chinese cities have begun paying tax, stamp duty, and social security premiums using the country’s CBDC, the digital yuan.

Other regions that have announced it is either considering, or would be adopting cryptocurrencies for tax payments include the Swiss city of Lugano, Buenos Aires, Colorado, Rio de Janeiro, and The Central African Republic.