S&P: US states and cities are actively researching cryptocurrencies

On September 16, a report released by S&P Global Ratings on September 15 showed that state and local governments in the United States are actively studying cryptocurrencies and are increasingly interested in investing in cryptocurrencies through pension funds and accepting digital currencies as a means of payment for taxes and services.

On the investment side, with current low bond yields, the huge returns from cryptocurrencies have been hard for some pension funds to ignore, with Bitcoin and Ethereum returning 326% and 745% respectively in the 12 months ending August 20.

S&P wrote that investing in cryptocurrencies could increase the credit risk of pension funds because the cash-in value of cryptocurrencies can change rapidly. Some public pension funds have begun investing in crypto-related assets.

New Jersey's Common Pension Fund D holds a small stake in blockchain and digital holdings. Two pension funds in Fairfax, Virginia, have invested in crypto assets, including digital currencies and related companies. In terms of payments, some local governments are also exploring and testing the technology. In 2018, Ohio began accepting Bitcoin to pay state business taxes, including sales taxes, a plan that was suspended in 2019. The city of Williston, North Dakota, has also accepted cryptocurrencies to pay utility bills.