Massachusetts Introduces Strategic Bitcoin Reserve Bill, First Among ‘Deep Blue States’

Republican Senator Peter Durant of Worcester County, Massachusetts, has introduced legislation aimed at establishing a “Bitcoin strategic reserve.” 

This initiative marks a significant step for cryptocurrency in a traditionally Democratic stronghold, as it makes Massachusetts the first “deep blue state” to consider such legislation.

Senator Durant Champions Bitcoin

The bill proposes the creation of a separate fund known as the Commonwealth Bitcoin Strategic Reserve, which would be administered by the state treasurer. 

The legislation acknowledges Bitcoin’s growing mainstream acceptance, with Durant asserting that the time has come for the state to invest in digital assets as part of its financial strategy.

According to the draft, the state treasurer would have the authority to invest in Bitcoin and other digital assets using funds that are unspent, unencumbered, or uncommitted. 

Notably, the proposed legislation includes a cap limiting investments in cryptocurrencies to no more than 10% of the total amount deposited in the Commonwealth Stabilization Fund, which currently stands at $9 billion.

Durant emphasized that the legislation does not advocate for a complete divestment from traditional assets. “It’s not like we’re saying divest everything and put it into bitcoin,” he stated. “But we do believe it does make sense as a portion of the commonwealth’s portfolio.”

Treasurer Goldberg Yet To Weigh In

The bill also allows the state treasurer to hold digital assets securely through qualified custodians or in the form of exchange-traded products (ETPs). 

Furthermore, it grants the treasurer the ability to loan Bitcoin or other digital assets to generate additional returns, provided it does not increase the state’s financial risk.

Despite the enthusiasm for the bill, it has not yet been discussed with Deb Goldberg, the state treasurer and a Democrat. A spokesperson for Goldberg’s office told CommonWealth Beacon that the treasurer has yet to take a position on cryptocurrency but will review and provide feedback on the proposal when asked.

The introduction of this bill comes amid a broader debate about cryptocurrency’s role in state finances. While some, like Durant, advocate for its potential benefits, others, including prominent figures like Senator Elizabeth Warren, have expressed skepticism and called for more stringent regulations.

Featured image from DALL-E, chart from TradingView.com