It’s official—Bitcoin isn’t just for traders and tech enthusiasts anymore

This last point is particularly eye-catching. Under current U.S. tax law, only the first $10,000 in state tax payments can be deducted from federal taxes.

Minnesota State Senator Jeremy Miller (R-Winchester) has introduced the Minnesota Bitcoin Act (SF2661), which would permit the state to hold a portion of its treasury reserves in Bitcoin, according to the senator’s office.

The bill, which was introduced on March 18, also proposes allowing taxpayers to pay their state taxes with Bitcoin.

"As I do more research on cryptocurrency and hear from more and more constituents, I’ve gone from being highly skeptical to learning more about it, to believing in Bitcoin and other cryptocurrencies," Miller said in a statement.

The legislation follows a trend of state-level engagement with Bitcoin, with Senator Cynthia Lummis (R-WY) proposing that the U.S. government purchase 200,000 BTC annually for five years to add to a federal Bitcoin reserve.

Louisiana has also begun using Bitcoin for state services, while Colorado and Utah now permit taxpayers to pay their state taxes with crypto.

"Minnesota could become one of the first states to truly integrate Bitcoin into its operations," Miller added.

The bill's provisions include:

* Allowing the state to hold a portion of its treasury reserves in Bitcoin.

* Granting tax deductibility for federal taxes on state cryptocurrency gains, eliminating state taxes on cryptocurrency gains.

* Permitting taxpayers to pay their state taxes in Bitcoin.

* Authorizing the State Board, in consultation with the Office of the Attorney General, to select one or more custodians to hold, safeguard, and service any Bitcoin acquired by the state.

Currently, the first $10,000 in state and local taxes paid by taxpayers is deductible from federal taxes. However, this bill aims to provide an advantage to Bitcoin investors by eliminating state taxes on crypto gains, potentially making Minnesota a hotspot for Bitcoin.

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