Now Ohio businesses can pay state taxes with bitcoin.

Ohio Treasurer Josh Mandel made plenty of people scratch their heads with one of his last actions before leaving office in January. In late November, the Republican from Northeast Ohio began allowing Ohio businesses to pay their taxes with Bitcoin. The announcement occurred on the same day that the cryptocurrency lost 10 percent of its value, worsening a decline that began earlier in 2018.

So why would Mandel go all in on such an unstable financial product? First, he points out that Ohio will convert Bitcoin tax payments immediately to U.S. dollars to avoid fluctuations. Second, he emphasizes that the state’s embrace of cryptocurrency is just as much about Bitcoin’s underlying technology, blockchain, as it is about digital money. “We’re doing this project to let the rest of the country know that Ohio is loud and proud about embracing blockchain technology,” Mandel says.

Indeed, Ohio leaders are betting big on blockchain. While most associate the digital ledger technology with Bitcoin, the software has potential beyond digital money, and developers are busy coming up with applications in healthcare, finance, real estate and other sectors. No other state has embraced blockchain more than Ohio, says Tony Franco, the CEO and co-founder of SafeChain, a Columbus startup that uses blockchain to prevent fraud in property transactions. “We’re literally No. 1, and I would expect us to continue to see the benefits of the hard work of our state and local officials over the next 50 years,” Franco says.

In addition to Mandel’s Bitcoin initiative, Gov. John Kasich signed a law in August that gave records or contracts secured through blockchain legal legitimacy. Other municipalities—including Franklin County—have experimented with the technology, while Ohio investors are putting money into blockchain startups. In February, SafeChain raised $3 million in venture capital—led by Columbus’ NCT Ventures—and during the early December Blockland conference, Cleveland’s JumpStart and several other Ohio accelerators announced plans to invest $100 million in early-stage companies using the digital ledger technology. “I think we have 100 percent of the ingredients that we need in Ohio to capitalize on the new technology moving forward,” Franco says.