Jeremy Frank was delighted when he discovered that his hometown of Colorado in 2022 was accepting cryptocurrency for tax payments.
“As a Colorado resident, I was initially excited to pay taxes with a code.
However, Frank, the chief technology officer of Autonomys Network, quickly became wary of the two developments. First, the state government has partnered with PayPal to convert funds into US dollars and force them to transfer crypto from secure private wallets to centralized platforms. Secondly, he was asked to pay a 2% fee.
“I wasn’t going to jump over the hoops just for novelty and pay extra,” Frank told Thestreet Crypto.
Launched in 2022, Colorado’s crypto tax initiative aims to harness the growing interest in digital assets and blockchain technology. However, the program saw Colorado collect just $17,544 in digital assets in 2024, reaching just $17,544 from $23,241 in 2023, reaching just 0.0005% of last year’s total tax payments.
The Colorado Department of Revenue also did not accept digital assets directly, but instead received funds in US dollars after conversion through PayPal’s cryptocurrency hub.
It is not the only region that offers taxpayers the option to pay with digital assets. Detroit has rolled out its own program in 2025, but said crypto payments are likely to remain unused unless direct wallet integration or low fees are included.
Some of the digital asset community are not surprised by the limited intake of Colorado’s programs. “Paying taxes with crypto never became mainstream. It’s an iconic gesture, not a real use case,” Douro Labs CEO Mike Cahill told Thestreet Crypto. “Most holders see Crypto as a long-term asset rather than a checking account. Programs like this will remain performant until the policy catches up to how it actually uses digital assets.”
“Crypto’s tax collection is still new. The government system is not built for that,” said Sid Powell, CEO of Maple Finance. “Adoptions will remain low on both sides until infrastructure and incentives catch up.”
Other fault-adjusted inertia and outdated systems. “You can’t expect to bolt on the outdated government payment railroad and adoption,” said Doug Colkitt, CEO of Crocodile Labs. “Until regulators create clear, dedicated frameworks for digital assets, such initiatives will remain symbolic rather than systematic.”
Even those looking at potential tax locations have said the program has overlooked the main attraction of Bitcoin adoption in 2025. “Crypto tax initiatives like Colorado are underperforming, as Americans now view Bitcoin as an investment vehicle rather than spending currency,” Bitcoinila co-founder Chris Klein told ThestReet Crypto. “Taxpayers are reluctant to give up assets that they think they’re grateful for.”