Cryptocurrency has big implications for government — and for GovCons. Taxation of digital assets is a complex and fast-changing space. The regulatory landscape, likewise, is a moving target. And government and contractors alike are wrangling with how to accept and process crypto as a form of payment.
At TaxBit, Senior Vice President and General Manager Nathan Jones is helping to clear the air.
“It’s an exciting time because the momentum around crypto has never been stronger,” he said. “The recent executive order on digital assets and language in the Infrastructure Investment and Jobs Act are driving a lot of attention in this direction.”
Founded in 2018 by certified public accountants, tax attorneys and software developers, TaxBit connects consumer, enterprise, and government tax and accounting ecosystems. The company provides tools and expertise to help establish an entirely new category of business, as it supports the widespread adoption of cryptocurrency and other digital assets.
We talked to Jones about the crypto space and how TaxBit is helping GovCons and government agencies chart a path forward.
There’s a lot of noise around crypto right now. What are TaxBit’s competitive differentiators?
We were the first to tackle this. Our founders started developing this technology back in 2015 when there was still skepticism about potential for crypto as a new technology asset class. Now, there are very few people who doubt that long-term viability.
We have built API-level connectivity with over 600 different exchanges, and that stickiness — the relationship we have with all those crypto exchanges — differentiates us in the market. We have also hired a team of CPAs, tax attorneys and experts in this space. When you look at the government, they’re leaning on us to help them navigate the uncharted crypto space.
We’re also one of the few “enterprise” players in cryptocurrency. There are lots of different tokens, lots of different exchanges. But there aren’t many who are doing the type of thing we’re doing, which is gluing it all together and being that single source of truth and information on the back end of this new FinTech ecosystem.
How are you looking to engage with government?
There are a lot of gaps in terms of the knowledge right now. We’re excited to be a partner in a consultative way and to help the government from an education perspective.
I just started three months ago to build out our government business. We’re building our sales, marketing and engineering teams, and we opened our office in Arlington, Virginia, to have a place to collaborate with the government and with each other. This is the beginning of a journey of education.
We’re doing that on Capitol Hill, as well as with all those agencies that are engaged in the crypto space. We are speaking at conferences, joining the relevant trade associations and building the TaxBit brand in the public sector. We focus on being trusted advisers and thought leaders in this space.
How does TaxBit support other government contractors?
We’re doing a lot of work to educate the systems integrators on the demand and intricacies of this Web3 market opportunity. They need to understand the tools available to help those financial agencies, both at the state and federal levels, to get ahead of this opportunity and meet the consumer demand, as well as understanding the regulatory landscape.
Most of the integrators that support the IRS, the SEC and the Federal Reserve — all those folks have at least some level of expertise in cryptocurrency and digital assets. Many of them have contracts to modernize government systems.
As they look at that opportunity to modernize — being able to build in the capability for a taxing agency or a regulatory agency — they are looking at these new data sources, using new data sources.
We have the capability to help modernize those systems. And we’re also trying to work with them in terms of how they consult with agencies that are going to receive crypto so that they can build the technology into their future proposals. They want to help those agencies easily accept crypto, just like they do cash. The integrators want to have a solution built-in, and we’re a part of their solutions.
How did your previous experience prepare you for this role?
What’s happening with digital assets today is akin to what happened 20 years ago with open-source software. I was with Red Hat at the time, and you had a market where the customers were not comfortable with this new kind of software, this new kind of business model. We had to help them understand that open source was secure and that it was ready for the enterprise.
Now, we’re doing that same thing, in a more focused way, in terms of this new technology ecosystem. And it’s already familiar to me, because cryptocurrency is executed on the blockchain, and blockchain is an open-source environment.
What do you enjoy most about the work?
I’m thrilled to be in a place where I can impact the market the way I did with the open-source market 20 years ago. We built a broad and impactful business in government — eventually, we were bought by IBM. I’m excited to again be a trusted adviser and to be educating the market on something that is completely new.
We go into these agencies, and we are the first source of truth. We’re the first folks to explain how we’re helping to make this a safe environment for consumers. I can speak in government terms, because I’ve done that for my whole career, and I love that I can bring this very cutting-edge technology into the government.