This year’s rapid surge in U.S. states’ interest to put public money into cryptocurrencies before the federal government can establish a strategic reserve of digital assets has encountered mixed results after five such efforts flamed out, though Utah remains a single vote away from the finish line and Texas reportedly advanced a bill to its state Senate.
Pennsylvania, Wyoming, Montana, South Dakota and North Dakota have fallen short of the mark in legislative efforts to put public money into crypto. Others — most notably Utah — have made significant progress toward passing bills that could tie their financial health to the digital assets markets, and the ground is shifting by the hour.
The U.S. Congress and President Donald Trump have made noise about a federal strategic digital assets reserve, with the idea’s public campaign stemming from the Bitcoin 2024 stage in Nashville, Tennessee, back before Trump won his election and Republicans rose to the majorities in Congress. Trump has spoken broadly in favor of the notion, which has also been more aggressively advocated by MicroStrategy’s Michael Saylor and pitched by Senator Cynthia Lummis, the Wyoming Republican who helms the crypto subcommittee of the Senate Banking Committee.
Many of the states raced to beat the feds to the punch, but in the weeks that have marked this trend, the market value of the asset most of the efforts are talking about — bitcoin (BTC) — has slipped considerably from the post-election euphoria that seemed to spur enthusiasm.
Read More: U.S. Bitcoin Reserve May Be Coming, But States Are Winning the Race
The drop in price to about $86,000 from a Trump inauguration-day high of $106,000 has been coupled with another high-profile exchange hack at Bybit that reportedly made off with more crypto than thieves have ever previously snatched in one outing. These setbacks may have further dampened the goodwill of state-government enthusiasts.
“That sense of urgency appears to have abated now,” said Johnny Garcia, a managing director at VeChain Foundation who has been following the state actions. “My view is states have some breathing room to assess and to contemplate a way forward.”
Montana and North Dakota saw clear losses when their legislatures considered the idea of state-level crypto reserves. Both legislatures voted to reject the bills. The other three states where the initiatives failed saw those rejections happen at the committee level.
Meanwhile, Utah’s legislation to allow the crypto investment of up to 5% of certain public accounts has cleared the state house and a senate committee on its way to consideration by the entire senate there. But getting that vote is never a certainty in the limited windows most states give to their legislative activity.
“Although Utah seems best positioned to finalize its bill first, nothing is guaranteed,” said Dennis Porter, CEO of the Satoshi Action Fund that’s pushed for states to embrace bitcoin reserves. “It’s a dynamic process.”
Porter said the campaign in the states is leaning on them as the “laboratory of democracy.” He posted on social-media site X (formerly Twitter) that most of the bills will fail, which is “normal” for the process, which his group will continue pursuing each year.
Texas, a major bitcoin mining hub, reportedly became the latest state legislature to move a crypto reserve bill out of committee. But the states have pursued such a wide variety of digital assets initiatives that they’re difficult to pin down as a common effort. And some states are moving on other aspects of crypto involvement, such as Indiana’s house-passed bill weighing blockchain for government efficiency and Arizona advancing a technical bill through its house that would keep unclaimed property in crypto form, rather than converting it to cash — an outcome that would involve managing it in a state fund.
While North Dakota’s effort to set up a reserve failed, the state house also approved a separate resolution that encourages its treasurer to invest certain state funds in digital assets. That resolution is now in the hands of the state senate.
Garcia predicted that “many of these states will likely authorize digital assets as part of their state pension and investment options before moving toward more aggressive digital asset reserves.”
3 Comments
It’s fascinating to see how close Utah was to breaking through on crypto regulation. It seems like blockchain technology is gaining more attention and recognition from lawmakers, which is definitely a step in the right direction for the industry.
Despite the progress made by Utah, it’s disheartening to see that some states are failing to embrace cryptocurrencies. With the potential financial benefits and technological advancements that come with this new form of currency, it’s crucial for states to stay ahead of the curve and not miss out on the opportunities it presents.
While it’s understandable that some states may be hesitant to fully embrace cryptocurrencies, it’s important to remember that innovation often comes with certain risks. Perhaps finding a middle ground that allows for responsible regulation and protection of investors while promoting growth and innovation could be a more balanced approach.
Question: I wonder what specific concerns or challenges are holding some states back from fully embracing cryptocurrencies?
It’s really interesting to see the progress that some states are making in the crypto world, but it’s also disappointing that others are struggling to catch up. I wonder what factors contribute to this disparity and what can be done to encourage more states to embrace cryptocurrencies?
I totally agree with the idea that states should be more proactive in setting up regulations for cryptocurrencies. It’s such a rapidly growing market and it would benefit both consumers and businesses to have clear guidelines in place. Hopefully, more states will follow Utah’s lead and embrace crypto in the near future.
While it’s great to see progress being made in Utah, it’s a shame that some states are still lagging behind. The advantages of cryptocurrencies, such as decentralized transactions and lower fees, could greatly benefit these states in terms of economic development and financial inclusion.
I’ve always been curious about how states decide on their stance towards cryptocurrencies. What kind of factors do they consider and what impact does it have on businesses and consumers in the long run? It would be interesting to dive deeper into the decision-making process.
It’s important for states to recognize the potential of cryptocurrencies and take bold steps in regulating and integrating them into their economies. By doing so, not only will they attract innovative businesses and investments, but they will also empower their citizens with greater financial flexibility and accessibility.
It seems like Utah is setting a progressive example for other states to follow in the crypto world. I’m curious to know what measures they have put in place to facilitate the growth of cryptocurrencies and how these strategies can be applied in other states.
While it’s encouraging to see Utah making strides in the crypto space, it’s also worth noting that the regulatory landscape can vary greatly from state to state. This discrepancy can create challenges for businesses and individuals alike. How can we work towards achieving more uniformity and consistency in crypto regulations across the country?
It’s promising to see that Utah is just one vote away from breaking through on crypto stakes. Hopefully, other states can follow suit and recognize the potential of cryptocurrencies for economic growth and innovation.