TLDR
- Utah passed blockchain legislation without the Bitcoin reserve provision that would have allowed state funds to be invested in digital assets
- The bill still protects rights to mine Bitcoin, run nodes, and participate in staking
- The decision comes days after President Trump’s executive order establishing a federal Strategic Bitcoin Reserve
- Texas and Arizona are leading state-level Bitcoin reserve initiatives with active legislation
- Several states (Montana, South Dakota, Pennsylvania, North Dakota, Wyoming) have rejected similar Bitcoin reserve bills
Utah Passes Modified Blockchain Bill, Removes Bitcoin Reserve Provision
Utah lawmakers have passed a blockchain bill that aims to provide regulatory clarity for digital assets, but they removed a key provision that would have allowed the state to invest public funds in Bitcoin. The modified bill still contains protections for blockchain activities while stopping short of creating a state-run Bitcoin reserve.
The Utah Senate approved H.B. 230, titled “Blockchain and Digital Innovation Amendments,” with a 19-7 vote on Friday. The House later agreed with the Senate’s changes, passing the bill 52-19, with four members not voting.
The bill was first introduced by Republican Representative Jordan Teuscher and sponsored in the Senate by Republican Senator Kirk Cullimore. During the Senate floor session, Senator Cullimore explained the removal of the reserve provision, saying, “There was a lot of concern with those provisions and the early adoption of these types of policies.”
The original bill would have allowed Utah’s state treasurer to invest up to 5% in digital assets with a market cap above $500 billion. Currently, Bitcoin is the only cryptocurrency that meets this threshold.
Despite removing the reserve provision, the passed bill still includes measures that protect blockchain technology users in Utah. It prevents state and local governments from restricting the acceptance or custody of digital assets.
Mining & Staking Activities
The bill also protects individuals’ rights to run blockchain nodes and participate in staking activities. These activities will be exempt from state money transmitter licensing requirements under the new law.
Mining operations also received protection in the legislation. The bill limits local governments from imposing zoning and noise regulations that unfairly target digital asset mining businesses operating in industrial zones.
If Governor Spencer Cox signs the bill, it will take effect on May 7, 2025. The governor has not yet publicly stated his intentions regarding the legislation.
Strategic Bitcoin Reserve
The timing of Utah’s decision is worth noting. It comes just days after President Donald Trump signed an executive order on March 6 establishing a federal Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile.
Trump’s executive order directs the federal government to seed a Bitcoin reserve using cryptocurrency obtained through forfeitures in criminal cases. The Treasury and Commerce departments have been instructed to develop budget-neutral strategies to acquire more Bitcoin for the reserve.
While Utah has stepped back from creating its own Bitcoin reserve, other states are moving forward with similar initiatives. Texas recently made progress when its Senate approved a Bitcoin reserve bill with a 25-5 vote.
Texas Senator Charles Schwertner, who sponsored the bill, argued for Bitcoin’s value as a hedge against inflation.
“We don’t have stacks of dollar bills and safes like we did in medieval times,” Schwertner said during discussions. “What we have is digital currency.”
Arizona is also advancing its own Bitcoin reserve proposal. The state’s Senate Bill 1025 has already cleared the Senate Finance Committee’s third reading and proposes that Arizona invest up to 10% of public funds in Bitcoin and other digital assets.
Oklahoma has joined the movement with House Bill 1203, the Strategic Bitcoin Reserve Act. This bill recently passed the House Government Oversight Committee by a 12-2 vote.
Not all states have embraced the idea of Bitcoin reserves. Montana, South Dakota, Pennsylvania, North Dakota, and Wyoming have rejected similar bills, citing concerns about Bitcoin’s price swings and risk factors.
According to data from Bitcoin Reserve Monitor, about 18 state proposals are still under consideration. States like Kansas, Iowa, Missouri, Illinois, Florida, Massachusetts, and Michigan are exploring the possibility of adding Bitcoin to their financial reserves.
Of the 31 Bitcoin reserve state bills that have been introduced across the country, 25 remain active. This shows the growing interest in cryptocurrency at the state government level despite mixed results.
The blockchain and cryptocurrency landscape continues to evolve rapidly at both federal and state levels. Utah’s modified approach represents a middle path that embraces blockchain technology while taking a more cautious stance on direct investment of public funds in digital assets.
