New Hampshire has passed the first Bitcoin Reserve. On its heels, Arizona followed suit with the governor signing legislation so that the state can HODL crypto for three years, before liquidating it if it goes “unclaimed.” The two new laws in Arizona and New Hampshire are different from one another and different from the Strategic Bitcoin Reserve taking shape at the federal level, which Disruption Banking wrote about here.
Importantly, none of them have been implemented, so euphoria among HODLers about the potential for upward price pressure on Bitcoin is mainly speculation as of yet.
In both New Hampshire and Arizona, the state treasurers are empowered to do something with a small percentage of the crypto, 5% and 10%, respectively. Firstly, In Arizona, the proceeds will go into the state’s “general fund,” in digital form. In New Hampshire, it’ll go into investments in digital assets or precious metals.
In New Hampshire, Governor Kelly Ayotte was hyped.
Arizona jumps on the bandwagon
Not to be outdone, Arizona announced just one day after Governor Ayotte signed the New Hampshire bill.
Arizona Governor Katie Hobbs has been much more reluctant to liberalize how the state treats cryptocurrency. She vetoed two big crypto bills, one of which (SB1373) would have established a state Bitcoin reserve of up to 10% of the state’s reserve budget.
Arizona’s HB2749, like New Hampshire’s law, will transform these formerly dormant assets into stores of value to be leveraged by the state government, which makes sense.
Representative Jeff Weninger (R-Chandler), the Arizona bill’s sponsor, said, “Digital assets aren’t the future—they’re the present. This law ensures Arizona doesn’t leave value sitting on the table and puts us in a position to lead the country in how we secure, manage, and ultimately benefit from abandoned digital currency. We’ve built a structure that protects property rights, respects ownership, and gives the state tools to account for a new category of value in the economy. It’s exactly the kind of policy we should be leading on—modern, precise, and built with an understanding of where technology and finance are heading.”
Behind the scenes
The Satoshi Action Fund (SAF) was instrumental in the bill’s passage, as was Coinbase, which offered expert testimony to support it. SAF “helped” draft the bill and advocated for its passage, as it has done with seven other pro-Bitcoin bills.
Keith Ammon, a New Hampshire representative who sponsored the bill, published an article on Tuscon.com, arguing that a Bitcoin reserve can act as a hedge against inflation, against “unprecedented federal spending and monetary expansion.”
He continued, “Gold has a 5,000-year history as a superior store of value. With its algorithmically fixed supply of 21 million units, Bitcoin functions as ‘digital gold’ with additional benefits: It’s instantly verifiable, easily storable and transportable, and impossible to counterfeit. The two assets are complementary.”
Texas for the Bronze
On May 20, Texas will give Bitcoin reserve bill SB21 a second reading. The state treasurer would not be the one controlling the reserve fund, according to the bill. Instead, the fund would be an external fund financed by legislative appropriations, airdrops, forks, and investment earnings, as well as public or private donations.
Texas Governor Greg Abbott seemed supportive of this effort when he posted the following on X last November:
There’s a similar bill headed to a vote in North Carolina, as well as in Alabama.
The North Carolina bill would be the first to allow the state to “examine the feasibility” of investing the state retirement income plan in crypto Exchange Traded Products (ETPs) and study the possibility of holding seized or forfeited digital assets, similar to the federal version. The text doesn’t specify Bitcoin, but that would seem to be the implication.
This goes further than Arizona, which directs the proceeds from unclaimed property into crypto assets, but it’s unclear if that means the state treasurer would HODL rather than sell seized coins.
What’s to come?
Many states are exploring the possibilities, and this is only a glimpse into a few of the most successful bills, rather than the many iterations that have failed in other states.
So far, despite the best efforts of Bitcoin advocates, almost two dozen other states have rejected similar crypto reserve bills, including two in Florida just last week that were pulled from the floor without a vote. Oklahoma, Montana, North, and South Dakota, as well as Pennsylvania and Wyoming, all tossed similar legislation, although mostly after voting to advance the bills out of early committees.
More broadly, even failed legislation still signals the will to innovate at the state level in the realm of monetary policy, which is itself a remarkable development. Additionally, these efforts signify a new level of institutional legitimacy for Bitcoin.
Ishmael Green, a partner at law firm Diaz Reus, told Blockworks, “Long term, these sorts of laws will lead to an upward price pressure and supply shortage, as states and other institutional entities scramble to accumulate more bitcoin.”
However, now that a few states are closer to spending funds from state budgets on Bitcoin, the possibility is growing that market-moving public purchases of digital assets may significantly decrease the supply and take it off the market in state holdings, and that would likely spur bullish price movement.
These new laws will doubtless be copied across other states, heralding a rush of state innovation in the crypto ecosystem. In the very near future, states are likely to become Bitcoin whales!
Author: Laird Dilorenzo
#Crypto #DigitalAssets #StrategicReservice #Bitcoin
Laird Dilorenzo is a hatchet thrower and wordsmith.
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
