Pennsylvania proposes bitcoin strategic reserve legislation
On November 13th, Representatives Mike Cabell and Aaron Kaufer introduced the “Pennsylvania Bitcoin Strategic Reserve Act of 2024” (HB 2664) to the state’s House of Representatives, to establish a state-level Bitcoin reserve fund to protect against inflation and offer financial stability. If enacted, the bill would allow Pennsylvania’s Treasurer to allocate up to 10% of state funds, including the General Fund, Rainy Day Fund, and State Investment Fund, to Bitcoin. As of November, the state’s Treasury reported it had over $9.7 billion in its General Fund and about $7 billion in its Rainy Day Fund.
Key Objectives:
- Hedge against inflation: By investing in Bitcoin, the state can potentially reduce the impact of inflation on its finances.
- Diversify state funds: The bill allows for a portion of state funds to be invested in a non-traditional asset, reducing reliance on traditional assets.
- Promote financial stability: A Bitcoin reserve fund can provide a safety net during economic downturns.
Allocation Details:
- Up to 10% of the General Fund, Rainy Day Fund, and State Investment Fund can be allocated to Bitcoin.
- The allocation will be managed by the state's treasurer and investment board.
The bill is currently under consideration in the Pennsylvania House of Representatives. If passed, it would make Pennsylvania the first state to establish a Bitcoin reserve fund, potentially paving the way for other states to follow suit. In addition to the Bitcoin Strategic Reserve bill, the Pennsylvania House passed the Bitcoin Rights bill (HB 2481) in October to establish a regulatory framework to protect residents' rights to self-custody digital assets and ensure their ability to use Bitcoin as a method of payment. The Bitcoin Rights bill sailed through the Democrat-led House with a 176-26 vote in favor.
Pennsylvania is a prime candidate to lead the charge in pro-Bitcoin legislation due to its blend of economic and demographic factors. With over 1.5 million residents owning digital assets, the state has a stake in the growing crypto industry, valued at over $2 trillion. Companies like Mawson Infrastructure Group and Stronghold Digital have already established Bitcoin mining facilities in Pennsylvania, leveraging existing infrastructure and repurposing former power plants and industrial sites. The state’s crypto-friendly stance has shown a willingness to support financial innovation and to promote digital currencies.