States Are Winning the Race to Create Bitcoin Strategic Reserves

As Utah became the first state to get a bill through a legislative chamber that would allow the investment of public money into crypto assets

Lawmakers in Utah, Kentucky and Maryland made moves this week to put public money into crypto assets, a drive that began at the federal level with a bill to create a bitcoin strategic reserve.

While the states are broadly engaged in the effort, their approaches to investing state money in digital assets differ widely.

Utah became the first state to get a bill through a legislative chamber that would permit the investment of public money in crypto assets. The bill, which advanced out of the Utah House of Representatives on Friday by a three-vote margin, would allow the state treasurer to put money into digital assets.

If it clears both chambers and is signed into law by the governor, the legislation would permit investing public money into stablecoins or cryptocurrency with a market cap of more than $500 billion, which is currently only bitcoin.

In Maryland, a new bill was introduced this week by Democrat Delegate Caylin Young that would create a bitcoin strategic reserve, similar to the one proposed by U.S. Senator Cynthia Lummis.

The Maryland reserve would be funded through revenue from the enforcement of gambling violations.

Two new bills were also introduced in Kentucky this week that would open up state retirement funds for investment in digital assets exchange-traded funds (ETFs). The bills would also put up roadblocks for the use of central bank digital currencies (CBDCs).

Most of the state bills have avoided calling for new taxpayer money to be channeled into crypto.

Fifteen other states are considering legislation in their current sessions, with more expected to follow. Two states, Michigan and Wisconsin, already have portions of their retirement funds in crypto ETFs.

The state interest in crypto began largely following the election of President Donald Trump and his interest in a strategic stockpile of digital assets.

Trump has issued an executive order calling for his administration's crypto working group to examine the possibilities of a crypto stockpile for the U.S., though he has not gone so far as to propose a strategic bitcoin reserve.