Virginia advances invoice on state Bitcoin Fund institution committee
Virginia lawmakers are advancing a proposal that will put the commonwealth among the many rising variety of states contemplating direct publicity to Bitcoin and different digital belongings by public reserves.
Senate Invoice 557, sponsored by Sen. Reeves, would set up the Federal Strategic Cryptocurrency Reserve Fund, a particular non-returnable fund held within the state Treasury and administered by the Virginia Secretary of the Treasury.
The invoice superior this week after passing the Senate Basic Legal guidelines Technical Committee on a 13-2 vote.
Underneath the invoice, Virginia can be licensed to straight make investments state funds in Bitcoin and different eligible digital currencies, making a strategic reserve fund that proponents say is aimed toward modernizing monetary administration and positioning the state for the way forward for Bitcoin and digital finance.
The invoice units out an in depth framework for a way Bitcoin reserves might be managed. All funds allotted for this goal might be deposited right into a reserve fund together with any Bitcoins or cryptocurrencies bought or obtained.
Notably, the proposal additionally takes under consideration belongings which may be generated by blockchain occasions reminiscent of forks or distributed by airdrops, making certain that states retain possession of spinoff digital holdings.
Not like many state accounts, reserves aren’t recaptured. Which means that the funds will stay within the reserve fund relatively than being returned to the overall fund on the finish of every fiscal 12 months.
SB557 contains guardrails supposed to restrict speculative publicity. Digital currencies bought utilizing reserves will need to have a mean market capitalization of no less than $500 billion over the previous 24 months. It is a criterion that successfully limits eligibility primarily to Bitcoin.
Treasurers might be required to handle investments primarily based on “prudent particular person” requirements, balancing diversification and threat minimization. The invoice additionally permits using derivatives if the Secretary of the Treasury determines that the derivatives are in the perfect pursuits of the fund.
To deal with safety considerations, the Act authorizes the Secretary of the Treasury to contract with third events, together with certified custodians and controlled liquidity suppliers to facilitate purchases and asset administration, that make use of safe strategies reminiscent of chilly storage.
The Treasurer may fee an impartial audit by a licensed public accountant.
Moreover, SB557 establishes a five-member Strategic Cryptocurrency Reserve Advisory Board, together with a member with experience in digital asset funding, to supply steerage on valuation methodologies and funding insurance policies.
The invoice requires transparency by biennial reporting. By December 31 of every even-numbered 12 months, the Secretary of the Treasury will subject and submit a report detailing the quantity and estimated worth of Bitcoin and different digital currencies held, their modifications over time, and any administrative actions taken.
US states settle for Bitcoin
The proposal comes amid rising curiosity from U.S. states and native governments in incorporating digital belongings into public portfolios, reflecting broader developments in cryptocurrency adoption and monetary innovation.
South Dakota not too long ago launched Home Invoice 1155, which might enable the state to take a position as much as 10% of its public funds in Bitcoin.
Earlier this 12 months, Rhode Island lawmakers launched Senate Invoice S2021, which might briefly exempt small Bitcoin transactions as much as $5,000 per thirty days and $20,000 per 12 months from state earnings and capital positive aspects taxes.
The invoice would deal with Bitcoin as a “digital, decentralized forex” that will enable residents and Rhode Island-based companies to self-certify eligibility whereas sustaining easy data.
This exemption will go into impact on January 1, 2027, and expire on January 1, 2028, as a pilot program to cut back tax frictions within the on a regular basis use of Bitcoin.
New Hampshire is one other state that actively helps Bitcoin. In Could 2025, New Hampshire grew to become the primary U.S. state to authorize the Treasury Division to put money into Bitcoin and different giant digital belongings by approving the allocation of as much as 5% of sure public funds to cryptocurrencies beneath Home Invoice 302. At the moment, BTC is topic to market capitalization guidelines.
The publish Virginia Advances Invoice with State Bitcoin Fund Institution Committee first appeared in Bitcoin Journal and was written by Micah Zimmerman.
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