Mainstream adoption for cryptocurrencies could be a long way away but it’s definitely picking up pace. One particular firm is leading the adoption from the regulators’ perspectives – taxation. BitPay, a cryptocurrency services provider has announced this week that it has partnered with U.S-based taxation services provider Refundo to offer US tax residents the option to receive their tax refunds in Bitcoin. The Refundo service dubbed CoinRT will enable Refundo customers to receive part of or the full amount of their tax refunds from the IRS.
For customers to access the CoinRT service, they will create an account with Refundo after which they will be provided with a unique routing and account number to input in their tax refund forms. In addition, the users will be required to input their Bitcoin addresses to receive the Bitcoin. This process also includes the collection of background information about the customer i.e., know your customer (KYC) procedure. Once the IRS has deposited the funds to the unique routing address, BitPay automatically converts the funds to Bitcoin and deposits it in the provided Bitcoin address.
According to Refundo, the CoinRT service focuses on serving the underbanked community which appreciates the lower fees associated with Bitcoin payments. Refundo’s CEO Roger Chinchilla stated that,
“Adding bitcoin was a natural fit for our customers who often do not have traditional checking accounts, pay high check cashing fees and regularly send money internationally. CoinRT enables them to get bitcoin quickly and easily for one flat fee.”
In terms of fees related to receiving tax refunds, Refundo charges $34.95 for every payment made. In addition, BitPay has always had a flat 1% processing fee on the transaction amount. In comparison to the conventional method of accepting deposits from the IRS, CoinRT could prove cheaper and more convenient to some users but similarly so could prove more expensive especially within the crypto community.
As stated in the introduction, BitPay has been working profusely to bring crypto to the mainstream using the tax route. The crypto startup has formerly partnered with the US states of Florida and Ohio enabling them to allow their residents to pay taxes using Bitcoin. Most recently, the company partnered with a Canadian municipality to allow for tax payers to make property tax payments through Bitcoin in a one year trial.