A US state proposes a bill to invest public funds in Bitcoin
Florida is making a bold move toward cryptocurrency adoption. Senator Joe Gruters has introduced a new bill that would allow the state to invest public money in Bitcoin. If passed, this could make Florida one of the first states to officially recognize Bitcoin as part of its financial strategy.
The proposed bill, “SB 550: Investment of Public Funds in Bitcoin,” would give Florida’s Chief Financial Officer (CFO) the authority to allocate state funds to Bitcoin and other cryptocurrencies. These funds include the General Revenue Fund, the Budget Stabilization Fund, and various trust funds.
Is this the beginning of a larger shift in how governments view Bitcoin? And what challenges might Florida face along the way? Let’s take a closer look.
A hedge against inflation
Sen. Joe Gruters (R-Sarasota) and Rep. Webster Barnaby (R-Deltona) argue that inflation is undermining the value of state funds, making Bitcoin a potential solution. The bill would allow the CFO to manage and regulate these investments while ensuring they comply with Florida’s financial plans.
To limit risk, the law limits Bitcoin holdings to 10% of each fund. The goal is to make Bitcoin a strategic asset in Florida's financial system while maintaining close oversight.
“Inflation has eroded the purchasing power of assets held in state funds managed by the chief financial officer, and this erosion has reduced the value of the state’s reserves, affecting the financial stability and economic security of this state, its taxpayers, and its residents,” the bills read.
The bill highlights Bitcoin’s long-term growth and growing recognition as a legitimate financial asset. The bill notes that several countries, including the United States, hold Bitcoin in government reserves. The bill also notes that major investment firms such as BlackRock, Fidelity, and Franklin Templeton view Bitcoin as an inflation hedge.
Key provisions of the bill
The law spells out a clear plan for how Florida will invest and manage Bitcoin. It gives the CFO the authority to oversee Bitcoin holdings and ensure appropriate lending and security rules are in place.
To handle taxes, the bill proposes that taxes and fees collected in Bitcoin would be transferred to the General Revenue Fund. The fund would also be used to pay salaries to state employees who choose to receive a portion of their salary in cryptocurrency. These measures are intended to keep Bitcoin investments transparent and accountable.
More States Are Exploring Bitcoin
Florida is not the only state considering investing in Bitcoin. Maryland recently proposed the Strategic Bitcoin Reserve Act, which would use revenue from gambling violations to invest in Bitcoin. This growing interest shows that states are starting to take Bitcoin seriously as a financial instrument.
As more states explore Bitcoin, the idea of a national Bitcoin reserve could gain traction. However, regulatory challenges and Bitcoin’s volatility remain hurdles for lawmakers.
If more states pass similar laws, this could spark a larger debate about whether the United States should hold Bitcoin as part of the federal reserve.
If this trend continues, Bitcoin could soon become more than just an asset – it could become a mainstay of state finances.