The state of Arizona has approved a blockchain-based cannabis sector focused payments platform to its fintech sandbox. The Office of the Attorney General has stated that a company, named Alta, offers cash administration system for authorized medical marijuana distributors and vendors. The Arizona-headquartered financial services company plans to launch a stablecoin pegged to the greenback on a 1:1 ratio.
During its sandbox trial stage, Alta will test its member enrolling and payment platform. The end objective of the platform is to allow users to pay using the stablecoin, instead of fiat currency, for products and services.
Cannabis, even though legitimate in some US states, is nonetheless regarded as a contraband good by the federal government. Therefore, banks are not willing to support cannabis-related business as it could serve as a reason for cancelling their federal deposit insurance, which is critical for safety of financial institutions.
Sarah Wessel, the co-founder and COO of Alta, stated that the blockchain-powered facility can offer a critical financial service and make domestic groups 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 companies and state governments have made an attempt to fix the gap between the cannabis and financial services companies. Back in 2017, the Dash network started paying the firm Alt Thirty Six to incorporate Dash as a settlement option in the cannabis sector’s point-of-sale devices.
From the legal view, in February, legislators in California have tabled a bill that would permit crypto for tax payments from cannabis-associated businesses. The bill, which is being studied by the committee since March, aims to relax tax offices from tons of money brought in by firms related to cannabis businesses.
Arizona has turned out to be the first state to unveil a regulatory sandbox in March 2018. Republican Congressman Jeff Weninger backed the sandbox legislation.
Weninger commented on the potential broader use cases in today’s press release, saying:
“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.”
