Utah, Arizona, Illinois latest states proposing BTC reserve bills

Getting your Trinity Audio player ready...

Utah, Arizona, and Illinois have become the latest U.S. states to kick off legislative processes geared toward establishing BTC strategic reserves.

In Utah, the Blockchain and Digital Innovation Amendments bill was introduced on January 21 by State Rep. Jordan Teuscher. However, the House Economic Development and Workforce Services Committee only voted in favor of the bill this week. It now heads to the floor of the House for debate and voting, and if it sails through both houses, it will then move to Governor Spencer Cox’s desk for his assent.

Initially, the bill allowed the State Treasurer to invest up to 10% in digital assets, non-fungible tokens (NFTs) and stablecoins, but only if they met set criteria, such as regulatory approval, a sizable market cap and high liquidity. However, the bill has since then been revised to lower the maximum exposure to 5%.

State Rep. Teuscher believes the bill allows Utah to take the lead in digital asset adoption in the U.S. While over a dozen states have bills geared toward BTC reserves, none has passed them, and Teuscher believes Utah could be the first. If Utah legislators vote for the bill, it could take effect as soon as early May.

“While Utah is the 11th state to introduce similar legislation, we will be the first to pass it. Utah continues to lead the nation in blockchain and digital innovation,” he stated.

Arizona, Illinois join the BTC reserve race

Arizona is also in the race to become the first state to have a BTC reserve. The State Senate’s Finance Committee voted 5-2 in favor of the Strategic Reserve Bitcoin Act this week. The bill now heads to the Senate floor, and if it sails through, it will require the approval of the House of Representatives and the governor’s signature to become law.

Like many others in the country, the bill seeks to allow the state to invest up to 10% of public funds in digital assets. This would include funds held by the state treasury and retirement funds.

The bill further “allows public funds, if the U.S. Secretary of the Treasury creates a strategic bitcoin reserve for the purpose of storing government bitcoin holdings, to store its virtual currency holdings in a secure segregated account within the strategic bitcoin reserve.”

Illinois has also joined the bandwagon. A bill introduced by State Rep. John Cabello would allow the Prairie State to hold BTC as a reserve asset to hedge against economic volatility. The bill requires the state treasurer to establish the BTC fund and to hold all digital assets the state purchases (or receives as a gift from “Illinois residents and government entities”) for at least five years.

“After this period, the State Treasurer may transfer, sell, appropriate or convert to another cryptocurrency any [BTC] in the fund,” the bill directs.

Yet another bill in Indiana’s House of Representatives also welcomes BTC into the state, but unlike its peers, it refrains from the mandatory allocation to a BTC reserve. Instead, it paves the way for state-managed funds, such as the public employees’ retirement fund, to invest in BTC ETFs, both spot and futures.

The BTC reserve fever is spreading beyond the U.S. The latest to catch it is the Czech Republic, where the country’s central bank wants to invest billions of euros into digital assets.

In an interview with the Financial Times, Governor Aleš Michl said he’s pushing for the plan as a way to diversify its holdings. He believes that over time, at least 5% of the bank’s €140 billion ($145 billion) in reserves will be held in BTC.

However, Michl acknowledged that his campaign is unconventional, but says he is all about profitability, having been an investment banker before his regulatory position.

But while more governments warm up to BTC reserves, ‘crypto bros’ are at war over whether other digital assets should be included in these kitties. An executive order signed by Donald Trump, which failed to single BTC out and opted for the more inclusive term “digital assets,” has sparked a civil war between BTC maxis and other ‘crypto bros.’

At the heart of the conflict is Brad Garlinghouse, the Ripple CEO who, not too long ago, was viewed as a ‘crypto’ hero for his continued legal battle against the Securities and Exchange Commission (SEC). Now, BTC leaders believe he has been working to push his XRP token into the U.S. government reserves, which, to them, “undermines American prosperity and freedom.”

Watch: Want to develop on BSV? Here’s how you can build with Mandala