The State of Ohio has effectively banned the use of bitcoin for alcohol sales, becoming the first government in the US to take such explicit action.
The decision reportedly came in response to a local journalistâs query to the Ohio Department of Public Safety, after that reporter wrote about the Bitcoin Boulevard US project in Clevelandâs Cedar & Lee district.
The query asked if accepting bitcoin could jeopardize local liquor licences in any way. The Department of Public Safety is responsible for issuing liquor licences in the state.
Apparently, the answer is âyesâ.
Cleveland.com reported that Eric Wolf, agent-in-charge with the Ohio Investigative Unit of the Ohio Department of Public Safety, said that âbecause bitcoinâs value fluctuates so much, it is more like a commodity and ânot recognized as legal currency.'â
Ohioâs Liquor Control Law under Chapter 4301 expressly mentions âpayment of moneyâ in its rules governing the provision of alcohol. It does not use the word âcurrencyâ. This again raises questions about the exact definition of âmoneyâ versus âofficial legal currencyâ. The stateâs law is quite specific in the way it defines various forms of alcoholic drinks.
This means using anything other than US dollars to buy alcohol in Ohio is prohibited.
Some alcohol-selling members of Bitcoin Boulevard US, which announced its project just last week, had already expressed a desire to communicate with authorities about the project and make their positions clear.
The campaign had already reached out to other relevant regulators. The Ohio Liquor Control legal board sent a âno stanceâ reply and the federal Alcohol and Tobacco Trade Bureau (TTB) also reportedly raised no objections.
Bitcoin Boulevard US is due to be Americaâs first such scheme â where a group of merchants in one local area all opt to accept bitcoin.
Organizer Nikhil Chand posted his regrets on reddit yesterday, saying the agencies the campaign contacted had all been âintriguedâ by bitcoin and listened to explanations.
âI personally think their conclusion is unfortunate, and is indicative of the type of senseless obstructionism small businesses face from many antiquated and complicated laws and regulations,â he wrote.
âBut, it makes for an interesting new chapter to the bitcoin story and an interesting topic to present at our launch event. I fear this will set a precedent for other areas of the US as bitcoin continues adoption and so I plan to do whatever I can to keep this issue alive.â
Alcohol image via Cristi Lucaci / Shutterstock