Unless you’ve been living under a rock, you’ve surely heard about cryptocurrency by now or have at least heard the term. Over the past several years, cryptocurrency has emerged as an alternative currency that can be bought and sold as a digital asset.
While some have embraced crypto like President Trump, others have not and this includes some U.S. states.
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President Trump Wants To Set Up a Federal Crypto Reserve
PYMNTS reported that since Trump took office for his second term, he’s pushed the idea of creating a crypto reserve with plans to make the U.S. the capital of cryptocurrency.
In March, Trump signed an executive order to create a “Strategic Bitcoin Reserve.” The order mandates the establishment of a “United States Digital Asset Stockpile” to serve as a secure account for the management of federally held digital assets.
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It’s explained that the U.S. government currently holds a significant amount of Bitcoin (BTC), but has yet to implement a policy to maximize Bitcoin as a “unique store of value in the global financial system.” Ultimately, Trump wants to harness the power of crypto to the country’s advantage.
While the president is taking action to make crypto a relevant store of value at the federal level, some states that initially set out to establish their own crypto reserves are walking back the idea.
8 States Are Saying ‘No’ To a Crypto Reserve
Some states had plans to allocate a percentage of their public funds to invest in Bitcoin. But now, these states are rejecting the proposed crypto legislation:
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Florida
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Arizona
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Montana
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North Dakota
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Oklahoma
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Pennsylvania
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South Dakota
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Wyoming
For example, AInvest reported that a pair of bills proposed in Florida, House Bill 487 and Senate Bill 550, were created to establish a strategic Bitcoin reserve at the state level. However, lawmakers are walking back their legislative efforts. Ultimately, the bills faced opposition and pushback before passage and were withdrawn. The state’s legislative inaction could slow down the adoption and relevance of Bitcoin as a viable digital asset.
In Arizona, similar crypto legislation made it further than it did in Florida. It passed both chambers of government, only to be vetoed by the state’s governor. Arizona Gov. Katie Hobbs ultimately rejected legislation that planned to invest part of the state’s retirement fund into Bitcoin.
“Arizonans’ retirement funds are not the place for the state to try untested investments like virtual currency,” Hobbs wrote in a letter to the state senate president, as reported by PYMNTS.
Mitrade explained that in Montana, the state’s proposed Inflation Protection Act, which was passed by the House Business and Labor Committee, included the creation of a state Bitcoin reserve fund. However, the legislation was voted down by the full House; the final vote was 41 in favor and 59 against.
The debate over the proposed bill included proponents who said it was a smart way to enhance state funds and opponents labeled the bill as speculative and a risky use of taxpayer money.
Uncertainty About Crypto’s Viability as an Asset
Particularly at the state level, there is continued debate over whether cryptocurrencies like Bitcoin are still considered speculative assets or not. While some digital assets have seen impressive gains, they can also be highly volatile and result in major losses (including Bitcoin). Establishing crypto reserves at the state level will require overcoming significant political opposition and regulatory challenges.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
Sources:
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PYMNTS, “States Halting Efforts to Create Strategic Bitcoin Reserves.”
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The White House, “Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile.”
This article originally appeared on GOBankingRates.com: 8 States Changing Their Crypto Policies — Is Yours One of Them?
