YEREVAN (CoinChapter.com) — Utah’s plan to hold Bitcoin as a state reserve asset is closer to approval. On Feb. 20, the bill called HB230 “Blockchain and Digital Innovation Amendments” passed the Senate Revenue and Taxation Committee. The vote was 4-2-1. It now moves forward for second and third readings in the Senate before a final vote.
Earlier, the bill passed the Utah House. If approved by the Senate, it will head to Governor Spencer Cox. Once signed, Utah will officially recognize Bitcoin as a reserve asset. Four Republican senators supported the bill. One Republican and one Democrat opposed it. One senator was absent.
Criteria for Bitcoin as State Reserve Asset
To become a reserve asset, a digital asset must meet strict rules. The bill requires an average market capitalization of $500 billion or more over the past year. Right now, Bitcoin is the only cryptocurrency that meets this standard.
Ether (ETH) had briefly reached a $500 billion market cap in 2021, between October and December. However, it did not maintain that value long enough to qualify. The bill also allows crypto staking, suggesting that other cryptocurrencies like Ether might be considered later. But Bitcoin cannot be staked because it uses a different method (proof-of-work).
Details of Utah’s Investment Plan
If passed, the bill would take effect on May 7. Under this law, the state treasurer can invest up to 5% of digital assets in each of five designated state accounts. These accounts are the General Fund Budget, Income Tax Fund Budget, and State Disaster Recovery Account, among others.
The investments must be stored securely. Funds will be held by a qualified custodian or through an exchange-traded fund (ETF). The law focuses on safe management of Utah’s investment in Bitcoin or other qualifying assets.
Other States Look at Bitcoin Reserve Bills
Utah is not alone in this approach. Other states have also introduced similar Bitcoin reserve bills. These states include Arizona, Illinois, Kentucky, Maryland, Montana, New Hampshire, New Mexico, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, and Texas. Each is considering laws to allow investment in Bitcoin as a reserve asset.
Nationally, US Senator Cynthia Lummis also continues to support a federal Bitcoin reserve bill. This bill aims to create rules for the entire country regarding Bitcoin as a reserve asset.
