Bitcoins
- A Texas legislator has tabled a bill proposing to cap any Texas-based strategic crypto reserve to a maximum of US$500 million.
- In Utah, the state’s ‘Bitcoin bill’ has passed the senate, after all reference to a strategic crypto reserve was removed at the last minute.
- At the federal level Senator Cynthia Lummis has reintroduced her BITCOIN Act which if passed would see the US government purchase 1 million BTC over 5 years.
There’s been a flurry of activity over the past week around various US strategic crypto reserves, both at a state and federal level.
In Texas, Democrat Representative Ron Reynolds has introduced a bill, which if passed would limit the state’s crypto reserve to a maximum of US$250 million (AU$397 million). In Utah, there’s mixed news — the state did just pass its ‘Bitcoin bill’, but crucially the clause allowing for the establishment of a strategic Bitcoin reserve was removed.
Meanwhile at a federal level Republican Senator Cynthia Lummis has reintroduced legislation proposing the US purchase 1 million BTC over five years. Lummis’s bill would codify and extend Trump’s strategic Bitcoin reserve executive order that currently sees the US government simply holding its seized Bitcoin rather than actively acquiring additional Bitcoin. Lummis originally introduced the legislation last year before the election.
Related: Trump Signs US Crypto Reserve Order as Michael Saylor Says US May Buy 1 Million BTC
Attempt to Limit Size of Texas’ Bitcoin Reserve
Representative Reynolds’ bill, which was introduced March 10, proposes that the Texas comptroller not be allowed to invest more than US$250 million of the state’s Economic Stabilisation Fund into the strategic cryptocurrency reserve. It also suggests that Texas counties and cities be limited to US$10 million crypto reserves.
This bill follows the passage of legislation through the Texas senate on March 6, that allows the state to create a strategic Bitcoin reserve — that legislation doesn’t specify any limit to the size of the reserve. The bill still requires the signature of the Texas governor to become law. If it clears that final hurdle, Texas will become the first US state to have a strategic crypto reserve.
Utah Bill Stripped of Reserve Clause
Meanwhile in Utah the passage of the state’s ’Bitcoin bill’, technically known as HB230 “Blockchain and Digital Innovation Amendments”, through the senate has been a mixed blessing. The bill codifies certain rights for the state’s residents — such as digital asset custody rights, the freedom to mine crypto, run a node or stake crypto — but it does not include provisions for the state to establish a strategic crypto reserve.
The establishment of a strategic reserve had been the centrepiece of the bill right up until the last moment. As originally drafted, the bill would’ve allowed Utah’s treasurer to invest in any cryptocurrency that had a market cap over US$500 billion for the past 5 financial years. Only Bitcoin meets this criteria, so effectively it would’ve been a Bitcoin-only reserve.
Prior to the bill’s third and final reading though, Utah’s House voted 19-7-3 in favour of an amendment to strip any reference to a strategic crypto reserve. Commenting on Utah’s legislators’ decision, one of the bill’s sponsors, Senator Kirk A. Cullimore said:
There was a lot of concern with those provisions and the early adoption of these types of policies, all of that has been stripped out of the bill.
Senator Kirk A. Cullimore
In total, 31 US states have introduced bills to establish strategic crypto reserves: of these, 25 could still potentially be passed into law.
Lummis Reintroduces Legislation to Buy A Million BTC
The legislation reintroduced by Senator Lummis, known as the BITCOIN Act, would take the federal strategic bitcoin reserve to a whole new level. Currently, the reserve established by President Trump through an executive order is simply holding Bitcoin seized through criminal investigations.
Lummis’ bill would see the US buy an additional one million BTC over five years to be paid for by “diversifying existing funds” in the Federal Reserve system.
It’s unclear whether such a bill has legs, given White House crypto czar David Sacks’ emphasis on how the existing reserve will “not cost taxpayers a dime” and explicit statement that the government won’t be buying assets for the reserve:
The government will not acquire additional assets for the stockpile beyond those obtained through forfeiture proceedings.
David Sacks, White House Crypto and AI Czar
However, the text of the executive order does allow for government purchasing of assets to add to the reserve, directing the Treasury and Commerce Departments to “develop budget-neutral strategies for acquiring additional bitcoin.”
Related: Michael Saylor Advocates for Massive US Bitcoin Buy: Proposes 25% Stake by 2035
In a statement shared with media outlets, Senator Lummis explained her view that Bitcoin is fundamental to America maintaining its global economic dominance through the 21st century:
By transforming the president’s visionary executive action into enduring law, we can ensure that our nation will harness the full potential of digital innovation to address our national debt while maintaining our competitive edge in the global economy.
Senator Cynthia Lummis
Jody McDonald Read More