Key Takeaways
- A national Bitcoin Strategic Reserve could be adopted at the federal level in the U.S. under Donald Trump.
- Utah is the 11th state to propose using cryptocurrency as backing for the state’s finances.
- The bill could allow the state treasurer to engage in DeFi activities such as staking and lending.
Utah is the latest domino to fall in a growing line of U.S. states seeking to adopt cryptocurrency as it seeks to allocate 10% of funds into Bitcoin (BTC) and stablecoins.
The proposal also offers novel provisions that grant the state the right to stake and even lend digital currencies, as well as notes on security and self-custody rights.
Utah’s Bitcoin Bid
Introduced by state representative Jordan Teuscher, the “Blockchain and Digital Innovation Amendments” bill seeks to give Utah’s state treasurer the power to invest key state funds into BTC and stablecoins.
“Utah is proud to lead the way in blockchain and digital innovation. This bill reflects our commitment to embracing cutting-edge technology and preparing for the future of finance, while ensuring fiscal sovereignty,” Teuscher wrote.
More specifically, it would permit several state accounts, such as the Income Tax Fund Budget Reserve Account, Budget Stabilization Account, and State Disaster Recovery Restricted Account, to invest up to 10% of their funds in crypto.
Given the estimated total size of all these accounts combined ($11.9 billion), this could result in up to over $1 billion invested in crypto if the law is passed.
To qualify for the reserve, the desired crypto must have a market value of over $500 billion averaged over 12 months, meaning that just BTC qualifies. Stablecoins also face strict screening criteria and will need to be backed by dollars and/or highly liquid and secure assets.
Staking and Self-Custody
Additional provisions in the proposed legislation include staking, lending, and self-custody rights. Notably, the bill would allow for the state treasurer to “engage in staking and lending of digital assets” should they meet specific conditions.
The bill protects rights to self-custody over crypto. It would enforce that no state or local government can restrict, prohibit, ban, or impair individuals’ right to self-custody using hardware or self-hosted wallets.
In terms of security, the legislation states that the state must guard and maintain private keys “exclusive” within a top-tier encrypted environment “accessible only via end-to-end encrypted channels.”
The legislation specifies that hardware containing private keys must be stored in a minimum of two “geographically diversified” locations that are specified as “secure data centers.”
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
