Several states getting early jump on emerging blockchain, cryptocurrency acceptance

Recent headlines have been full of discussion on cryptocurrencies and speculation on significant changes in federal policy related to the technology. Anticipating federal action, leaders of several states are exploring ways to get their own jurisdictions involved in the space. Here are some recent examples, drawing from proposed legislation to implemented policies and structures for acceptance of the financial innovation:

States Considering Bitcoin Reserves

• Alabama lawmakers are mulling the creation of a bitcoin reserve. The state recently established a Blockchain Study Commission, which held its inaugural meeting in July 2024, to explore how blockchain technology could benefit Alabama and how the state might regulate it. Also, Alabama Rep. Mike Shaw announced that he intended to introduce legislation focused on the regulation of cryptocurrency and blockchain technologies. These two coupled actions seek to understand the technology’s implications for economic development in the state and advance Alabama’s cautiously proactive approach to integrating blockchain and digital assets into the state’s financial and regulatory framework. Meanwhile, Alabama State Auditor Andrew Sorrell has proposed creating a state bitcoin strategic reserve.
• Florida is also seeking to establish its own bitcoin reserve supported by elected pro-bitcoin leadership and a push from the Florida Blockchain Business Association (FBBA). Samuel Armes, president of the FBBA, has proposed investing 1% of the state’s $116.5 billion surplus—roughly $1.16 billion—into bitcoin. Governor Ron DeSantis, a vocal cryptocurrency advocate, has consistently championed pro-crypto policies and the creation of a reserve.
• New Hampshire and North Dakota have introduced similar measures to one another that include digital assets (i.e., bitcoin) and precious metals into their state treasuries as hedges against inflation and other economic uncertainties. North Dakota House Concurrent Resolution [HCR] 3001 would use funds from the state general fund, budget stabilization fund, and legacy fund to purchase digital assets and to future-proof the state’s financial resources against inflation and other uncertainties by encouraging investments in digital assets and precious metals. New Hampshire’s proposed legislation (House Bill [HB] 302) directs up to $360 million in cryptocurrency as part of its reserves if approved. While similar to North Dakota’s proposed measure, New Hampshire does not specifically call out bitcoin—abiding by the state’s tech-neutral policies—however, the bill only allows investment in crypto with a market cap above $500 billion on average over the past 12 months or the issuance of stablecoins. (This requirement makes bitcoin the only crypto available to the state for investment.)
• An Ohio lawmaker introduced HB 703: Ohio Bitcoin Reserve Act in December 2024 to create the Ohio Bitcoin Reserve within the state’s treasury. This bill gives the state Treasurer the authority to decide when and how to purchase the asset. While the measure died in the chamber, it is expected to be resurrected and serve as a blueprint for state legislators in their 2025 legislative session.
• Pennsylvania lawmakers were the first—in November 2024—to propose HB 2664, which sought to establish a Bitcoin Strategic Reserve and diversify the state’s financial holdings by enabling the state treasurer to allocate up to 10% of the state’s General Fund, Rainy Day Fund, and State Investment Fund into bitcoin and crypto-based exchange-traded products (ETPs)—but would allow for starting the reserve with a smaller percentage of between 1- and 5%. The measure did not advance, and it is uncertain whether it will be re-introduced again or a similar measure to be proposed in this year’s legislative session.
• Texas leads the U.S. in bitcoin mining, and lawmakers have recently introduced a measure (HB1598) to allow the state to own bitcoin as a financial asset. The bill also seeks to establish the Texas Strategic Bitcoin Reserve, to be operated by the state comptroller “as a hedge against inflation and economic volatility.” The proposed law also would allow Texans to voluntarily donate or bequest bitcoin to the fund as a way “to promote a shared ownership and community investment in Texas’s financial future.” Unlike other states’ legislation (e.g., Florida, North Dakota, and Pennsylvania), the Texas measure would not allow the state to invest its own funds in bitcoin.

Other cryptocurrency state legislation & state-backed digital currency

In early January 2025, Oklahoma lawmakers proposed the Bitcoin Freedom Act (Senate Bill [SB] 325), which seeks to allow state workers and vendors to be paid in bitcoin. The use of the cryptocurrency by businesses (as payment for goods and services) and employees (wages) would be voluntary and has been presented as a hedge against inflation and protection of earnings and investments from the devaluation of traditional currency. Proponents of the measure see it as a step towards embracing new and innovative financial technologies and providing Oklahomans with more financial choices.

Last October (2024), on a bipartisan vote, the Pennsylvania House of Representatives passed HB 2481—dubbed the “Bitcoin Rights,” which per reporting, “positions Pennsylvania among states at the forefront of digital asset regulation and underscores its commitment to fostering innovation in the sector while addressing critical issues like economic empowerment and financial inclusion.” The measure also enshrines the rights of individuals and businesses to self-custody digital assets, operate blockchain nodes, and conduct transactions without interference from restrictive municipal ordinances.

Wyoming has made significant strides in the digital currency space with its state-backed cryptocurrency, the Wyoming Stable Coin (WYST). State lawmakers passed the Wyoming Stable Token Act in 2023. The act grants the state authority to issue the stablecoin backed by reserve assets. Gov. Mark Gordon supports the initiative and its potential to diversify the state’s economy and position Wyoming as a leader in digital finance. The Wyoming Stable Token Commission was granted permission to proceed with the launch of the WYST, and as of last May, the state commenced minting the digital asset. The token, backed 1:1 to the value of the U.S. dollar, is slated to begin circulation, although an exact date is yet to be disclosed.

State pensions investing in bitcoin  

While most states aim to purchase bitcoin outright, others like Michigan and Wisconsin have opted for a more conservative route, investing in Bitcoin-related exchange-traded funds (ETFs) and trusts.  (The distinction between buying bitcoin and buying shares of a bitcoin ETF: while bitcoins are purchased directly and stored in a digital wallet, the ETFs are tied to the price of bitcoin, and investors do not own the cryptocurrency.) The State of Wisconsin Investment Board (SWIB) was the first U.S. state pension fund to invest over $160 million in bitcoin ETFs. The State of Michigan Retirement System marks the second confirmed investment by a pension fund in the spot bitcoin ETFs, which was launched in January 2024, by investing $6.6 million in the cryptocurrency. Meanwhile, Florida’s Chief Financial Officer has recently advocated that his state shift some state pension money into crypto. He argues that doing so would diversify the state’s portfolio and provide a secure hedge against the volatility of other major asset classes. He has also tasked the pension managing organization to study and issue a report detailing the addition of digital assets as part of the state’s pension portfolio. The report is to be submitted before the start of Florida’s 2025 legislative session, which begins in March, for lawmakers’ consideration during the session.

This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. (The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.