Bitcoin Reserve Proposals Face State-Level Challenges but Continue Gaining Traction
A wave of legislative efforts to establish state-backed Bitcoin reserves has encountered resistance, with multiple states rejecting proposals to invest public funds in digital assets. Despite initial enthusiasm, bills advocating for Bitcoin reserves in several U.S. states have hit significant roadblocks in recent weeks.
Out of 50 states, over 20 have either introduced or are considering measures related to Bitcoin reserves or digital asset investments. However, recent setbacks have been notable, particularly in Montana, South Dakota, North Dakota, Pennsylvania, and Wyoming.
Montana’s House Bill 429, which aimed to allocate up to $50 million in public funds to Bitcoin, stablecoins, and precious metals, failed to pass. Despite Representative Curtis Schomer’s argument that the initiative could diversify state assets and offer higher returns, the proposal was rejected in a 59-41 House vote on February 21.
South Dakota faced a similar outcome with HB 1202, which proposed investing up to 10% of the state's public funds in Bitcoin. The bill was struck down by the House Commerce and Energy Committee in a 9-3 vote on February 24. Representative Logan Manhart championed Bitcoin as a hedge against inflation, but South Dakota’s State Investment Officer, Matt Clark, warned of its volatility.
North Dakota, Pennsylvania, and Wyoming also saw their Bitcoin reserve proposals either stalled or rejected. North Dakota’s HB 1184, designed to explore the feasibility of a Bitcoin reserve, was voted down 57-32. Pennsylvania’s HB 2664, which sought to allocate 10% of public funds to Bitcoin, failed to gain traction. Wyoming’s initiative, introduced in January, met its end in a state committee vote on February 6.
The Bigger Picture: National and State-Level Bitcoin Reserves
Momentum for Bitcoin reserves gained national attention after former President Donald Trump endorsed the idea of a federal Bitcoin stockpile during his re-election campaign. Additionally, Wyoming Senator Cynthia Lummis introduced a bill in July 2024 advocating for a national Bitcoin reserve of 1 million BTC over five years. Ironically, her home state struggled to advance its own Bitcoin reserve proposal.
Progress in Other States
While some states have resisted Bitcoin reserve proposals, others are making headway. Utah has seen notable progress with its Blockchain and Digital Innovation Amendments bill, which passed a revenue and taxation subcommittee in a 4-2-1 vote on February 20. The bill, HB 230, would permit the state treasurer to allocate up to 5% of public funds to digital assets. Given that Bitcoin is the only cryptocurrency meeting the $500 billion market cap threshold, it stands as the prime candidate for the state’s reserve.
Texas, a longtime crypto-friendly state, is actively pursuing two Bitcoin-related proposals. One bill would enable the state to allocate up to 1% of its general revenue fund to Bitcoin, while another focuses on accepting Bitcoin donations and streamlining crypto payment conversions.
Oklahoma is also advancing its Bitcoin reserve efforts. On February 25, the House Government Oversight Committee approved HB 1203, the Strategic Bitcoin Reserve Act, with a decisive 12-2 vote.
Arizona is following suit, with its Senate Finance Committee advancing SB 1025. The bill, which proposes investing up to 10% of public funds—including pension funds—into cryptocurrencies like Bitcoin, now awaits a House vote.
Future Outlook
With 18 state-level bills still pending, the movement to establish Bitcoin reserves remains very much alive. While some states have balked at the volatility of Bitcoin, others see digital assets as an essential component of modern public finance. As debates continue, lawmakers across the U.S. are weighing the risks and rewards of incorporating Bitcoin into their state reserves.