The emergence of Bitcoin as a pivotal asset is prompting innovative legislative responses across the United States. In a commendable effort, the Bitcoin Policy Institute (BPI) has unveiled a comprehensive model bill aimed at empowering state treasuries to classify Bitcoin (BTC) as a strategic reserve asset. Titled the “State-Level Strategic Bitcoin Reserve Toolkit,” this document serves as a guide for states to bolster their treasury holdings, reinforcing their defenses against economic instability and deteriorating fiat currency values. The framework sets the stage for a revolutionary change in how state financial systems can operate within the digital asset landscape.
Proposed Bitcoin Allocation Strategy
The framework, drafted by BPI’s leaders, underscores the idea that treasurers can already include Bitcoin in their fiduciary responsibilities. It encourages lawmakers to leverage this opportunity to attract a burgeoning digital-asset sector. Under this proposed framework, each state would establish a Strategic Bitcoin Reserve (SBR). This reserve would be safeguarded entirely through cold storage and operated by a Multi-Institution Custody system, mitigating any risks linked to centralization by distributing control among multiple independent entities.
Key to this initiative is the stipulation that states must allocate at least 3% of the previous fiscal year’s average daily balance of their General Operating Fund towards Bitcoin acquisitions. States could also boost this reserve through various means, including seized digital assets and cryptocurrency tax revenues. Once procured, the Bitcoin holdings would be safeguarded for a minimum of twenty years, with strict prohibitions on lending or using these assets for any speculative contracts or derivatives.
Moreover, to ensure maximum transparency and trust, the proposed legislation mandates a real-time Proof-of-Reserves protocol. This would involve the treasury regularly publishing essential cryptographic details, such as wallet addresses and balance updates, enabling the public to maintain continuous oversight of state Bitcoin reserves. To reinforce its accountability, a Strategic Bitcoin Reserve Advisory Committee comprising diverse stakeholders would oversee operations, ensuring rigorous audits every three years by the legislative audit division.
In alongside its financial implications, the proposed legislation also delves into economic strategy. The toolkit introduces Bitcoin Tax-Advantaged Zones, which would offer tax relief for businesses primarily engaged in BTC activities. Investments in mining operations would be framed as environmentally beneficial endeavors, promoting practices that harness stranded energy and improve sustainability. A portion of mining revenues would be allocated to environmental conservation projects, aligning economic interests with ecological considerations.
The timeline for implementation reflects an ambitious approach: within ninety days following enactment, treasuries would be tasked with realizing their initial Bitcoin purchase. Full operational capabilities—including necessary insurance and regulatory measures—would be expected within four months, underscoring the urgency of establishing a secure infrastructure against threats such as cyber incidents.
Noteworthy is the fact that as of now, three U.S. states have successfully enacted their own strategic Bitcoin reserves. New Hampshire initiated this trend on May 6, 2025, led by Governor Kelly Ayotte, allowing state treasurers to invest up to five percent of select funds in Bitcoin. Arizona and Texas followed suit with similar legislation aimed at securing digital assets for the states, indicating a significant trend toward mainstream acceptance of cryptocurrency in public finance.
As of the latest updates, Bitcoin is trading at $111,111, signifying its volatile yet promising nature within the formidable financial landscape.
