Bitpay uses exchanges such as Bitstamp to sell the coins immediately. There are plenty of buy orders there to cover these purchases. Note that this doesn't mean every tax bill is due to be paid by bitcoin but individuals could if they wanted to.
Perhaps you are unfamiliar with bitcoin, I'm not sure. For every seller on a exchange there is a buyer. Yes if there happened to be a flash crash this may be an issue but generally this hasn't been a problem. As an example, bitpay will lock in the dollar value for a 10 minute period, as long as you pay in that window they guarantee the retailer the USD value and the buyer the BTC price. To achieve this they would keep some funds in btc all the time, then when a sale like this comes in they sell the equivalent amount (or a part of it) to hedge against future fluctuations.
I think you are thinking that the states entire tax revenue would come via this method, currently I doubt there are enough BTC in that state to achieve that outcome. But anyway this proposal is feasible as it currently stands.
Comments
Bitpay uses exchanges such as Bitstamp to sell the coins immediately. There are plenty of buy orders there to cover these purchases. Note that this doesn't mean every tax bill is due to be paid by bitcoin but individuals could if they wanted to.
Perhaps you are unfamiliar with bitcoin, I'm not sure. For every seller on a exchange there is a buyer. Yes if there happened to be a flash crash this may be an issue but generally this hasn't been a problem. As an example, bitpay will lock in the dollar value for a 10 minute period, as long as you pay in that window they guarantee the retailer the USD value and the buyer the BTC price. To achieve this they would keep some funds in btc all the time, then when a sale like this comes in they sell the equivalent amount (or a part of it) to hedge against future fluctuations.
I think you are thinking that the states entire tax revenue would come via this method, currently I doubt there are enough BTC in that state to achieve that outcome. But anyway this proposal is feasible as it currently stands.