The state of Arizona has accepted a Blockchain based cannabis industry-oriented payments solution into its fintech sandbox.
A recent press release from the attorney general’s office indicated that the company involved called Alta, is a cash management solution for licensed medical marijuana providers and vendors. The Arizona based financial services company has plans to issue a Stablecoin that is pegged 1:1 with the United States dollar.
During the Stablecoin’s sandbox testing phase, Alta will try its member onboarding and remittances platform. The platform’s end goal will be to let users pay for goods and services using the Stablecoin instead of Fiat money.
While cannabis is now legal in some states in the US, the federal government still considers it a controlled and illegal substance. This makes banking institutions quite hesitant to deal with cannabis related businesses, since it would be grounds for the government to revoke their federal deposit insurance, which is a crucial financial net for banking institutions.
Co-founder and COO of Alta Sarah Wessel, said that the Blockchain based service would be of great benefit since it would provide a crucial finance service and make local communities much more safe.
“The cash economy for legal cannabis in Arizona exceeds $350 million annually. These are legitimate companies, innovators and entrepreneurs that are forced to operate in cash. We offer them peace of mind. Our digital payment technology lifts the burdens of having to operate solely through cash and makes our communities safer.”
Other crypto businesses and state governments have tried to bridge the gap between the cannabis industry and financial service institutions. Lawmakers in the state of California proposed a bill last February that would pave way for the acceptance of crypto for tax payments from cannabis-related businesses. The bill aimed to relieve tax offices from the large piles of dollar bills brought in by cash intensive cannabis businesses. Crypto businesses like DASH on the other hand, sort the support of tech firm Alt thirty six; to integrate Dash as a payment option in the cannabis industry’s point of scale systems.
Thanks to republican congressman Jeff Weninger, who sponsored the legislation, Arizona became the first state to introduce a regulatory sand box in March 2018. The congressman gave his thoughts on the potential broader use cases in today’s press release
“It’s exciting to have Alta as the newest participant in Arizona’s FinTech Sandbox. There’s huge potential for Stablecoin technology in cash-intensive businesses around the world, and Arizona is fortunate to play a critical role in the development and growth of this emerging industry.”
Not many would have ever envisioned a world where the mainstream financial industry would see eye to eye with the cannabis industry. But thanks to legislation and crypto, the gap between the two industries is narrowing in the United States.
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