The strategic Bitcoin reserve creation features prominently in several US states autonomously proposed from the Donald Trump push at the federal level.
The proposals at the state level emerge on the heels of big promises that Donald Trump issued during the campaign trail to his November 5 victory. None of the promises has dominated the industry talk post his election as the intention to unveil the strategic US Bitcoin reserve.
While pundits debate the initiative’s feasibility at the federal level and possible market impact, several states are actively locked into the action.
US States Mull Independent Bitcoin Stockpile
Donald Trump’s triumph over Kamala Harris drives three states to consider establishing their BTC stockpiled. Each state is deploying a unique framework, as recently outlined in the Dec. 24 CNBC Crypto World interview.
During the CNBC show on Tuesday, Centrifuge lead counsel Eli Cohen hailed the initiative as suggesting positive acceptance and awareness for the digital assets markets.
Pennsylvania
Pennsylvania is the pioneer state in considering allowing its treasurer to undertake investment in Bitcoin. The initiative began barely a week following Trump’s re-election when Pennsylvania Representative Mike Cabell tabled a proposal to facilitate investing state funds in BTC.
The Strategic Bitcoin Reserve (SBR) Act, identified as House Bill 2664, aims to obligate the treasurer to invest 10% of the three funds in Bitcoin. The proposal is to direct investment in three funds: the State General Fund, the State Investment Fund, and the Rainy Day Fund.
Rep. Cabell opines that approving House Bill 2664 will help safeguard the assets against inflation. Besides hedging against inflation, lawmakers consider BTC the solution to reverse the erosion of purchasing power, which has dipped by 20% in the past four years. The erosion contrasts with the Bitcoin case, where it continues to gain strength against the US dollar.
Despite the objective of Cabell, the SBR Act has a single co-sponsor, Rep. Aaron Kaufer.
Texas
Texas State joined Pennsylvania with Representative Giovanni Capriglione, who revealed House Bill 1598 on December 12, which will facilitate the creation of a BTC reserve within the treasury. The proposal identified as the Texas Strategic Bitcoin Reserve Act will enable residents to settle charges and taxes using Bitcoin.
The proposal differs from the Pennsylvania draft that caps the investment to the treasurer acquiring BTC using the existing state funds. Notably, the Tax bill will create the reserve by facilitating BTC charges and tax payments. Additionally, the stockpile is open to voluntary donations.
The Texas proposal details the creation of a holding timeline and cold storage as it prohibits the state from selling the reserve for a minimum of five years.
Similar to Pennsylvania’s Cabell submission, Capgiglione indicates that Bitcoin could become an inflationary hedge to preserve value for Texans. This argument is the premise for Bitcoin adoption into MicroStrategy, Metaplanet, and Matador Technologies as they hedge against inflation.
Nonetheless, Cohen informed CNBC on Tuesday that enforcing the Texas bill could present significant infrastructure hurdles and challenges, mainly since the crypto community is unwilling to share wallets for taxes.
Ohio
The Ohio State recently joined the rush to create a Bitcoin reserve. Such arose as Rep. Derek Merrin, on Dec. 17, tabled a draft bill to facilitate the establishment of a Bitcoin stockpile.
The Bitcoin Reserve Act (House Bill 703) will grant the state treasurer the flexibility in BTC investment to establish a reserve from the seized assets. Merrin expects the bill approval will provide for the quick legislation desired in 2025.
The recent state bills are still in their infancy, similar to national efforts in the US, Russia, Poland, and Brazil, which are in the early phases. It is uncertain if the national governments can garner support for the law’s approval. However, the ensuing speculation will sustain the excitement regarding Bitcoin and crypto.
