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Utah’s “Bitcoin Reserve Bill” Passes Preliminary Senate Review
Bitcoin is the Only Digital Asset Meeting Reserve Standards
If Passed, the Bill Will Take Effect on May 7
Utah’s Bitcoin Reserve Bill passed the Senate Revenue and Taxation Committee on February 20, bringing Bitcoin one step closer to becoming the state’s reserve asset. The bill, titled HB230 “Blockchain and Digital Innovation Amendments,” was approved by the committee with a vote of 4 in favor, 2 against, and 1 absent. The bill will now undergo a second and third review before a final vote. Previously, the bill had already passed in the House of Representatives. If approved by the Senate, Utah Governor Spencer Cox only needs to sign the bill for Bitcoin (BTC) to be officially included as a state reserve asset. Among the four senators supporting the bill, all were Republicans, while the opposing votes came from one Republican senator and one Democratic senator, with another senator absent.
Bitcoin is the Only Digital Asset Meeting Reserve Standards
According to the content of the bill, to qualify as a reserve asset in Utah, a digital asset must have an average market capitalization of over $500 billion within the past year. As of now, Bitcoin is the only digital asset that meets this criterion. Ether (ETH), the second-largest cryptocurrency by market cap, briefly exceeded a $500 billion market cap in 2021, but only maintained that level for a few months (from October to December 2021). Additionally, the bill authorizes the state treasurer to engage in cryptocurrency staking, which, although not applicable to Bitcoin, opens up the possibility for future inclusion of cryptocurrencies like Ethereum that use a Proof of Stake (PoS) mechanism as reserve assets. According to the bill, the state treasurer may invest up to 5% of digital assets into five state-level funds, including:
General Fund Budget
Income Tax Fund Budget
State Disaster Recovery Accounts, etc.
These funds must be held in qualified custodians or through exchange-traded funds (ETFs). If the bill is ultimately passed and signed by the governor, it will officially take effect on May 7, 2024.
If Passed, the Bill Will Take Effect on May 7
Currently, Utah is leading the nation in the progress of Bitcoin reserve legislation. Dennis Porter, executive director of the Satoshi Action Fund, recently stated that due to Utah’s shorter legislative cycle and stronger political momentum, the state may become the first in the country to adopt Bitcoin reserves. According to the Bitcoin Reserve Monitor, 13 other states, including Arizona, Illinois, Kentucky, Maryland, Montana, New Hampshire, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, and Texas, have also proposed similar Bitcoin reserve bills. Among these, Utah and Arizona are leading the way compared to other states. Reference Source