“I’d be thrilled to be the first state to let you pay your taxes in a variety of cryptos,” Mr Polis told Coindesk’s Consensus 2021 virtual conference.
“Colorado is and will be the center for blockchain innovation in the United States, attracting investments and good jobs and innovators in infrastructure, digital identity, (and) individual data security in the private and public sector.”
Colorado would not be the first state to try and integrate cryptocurrencies.
In 2018 the state of Ohio started to allow business – but not individuals – to pay their taxes in digital currency, but only 10 companies used it and it was shut down a year later.
Cryptocurrencies were on the rise on Wednesday with Bitcoin, Ethereum, Dogecoin and Litecoin all up, according to Coindesk.
Bitcoin climbed above $40,000 for the first time this week before pulling back from that high mark.
In sport, cryptocurrency is not currently used to pay players in Major League Baseball, but New York Yankees manager Aaron Boone told Fox Business that it is “definitely a big conversation in our clubhouse”.
Digital currencies have seen wild fluctuations and volatility all month, since Elon Musk announced that Tesla would stop accepting Bitcoin out of environmental concerns.
The sell-off deepened last week when Chinese officials announced tighter controls on crypto mining and trading.
The US Treasury also had an impact on prices after announcing that it would require stricter cryptocurrency compliance with the IRS, to prevent tax evasion.
The crash saw Bitcoin, the world’s most popular cryptocurrency, fall from its high of $59, 463 to around $30,000, before starting to climb again.
Earlier this week Elon Musk said he had spoken with he spoke to Bitcoin miners in North America about using renewable energy sources.