Illinois has proposed a bill for a state-run Bitcoin reserve. The state has a goal to use the world’s first crypto as a financial savings technology. As of now, the bill requires a five-year holding period before conversions or sales can proceed.
Illinois State Representative John Cabello introduced House Bill 1844 (HB1844). It proposes creating a strategic Bitcoin (BTC) reserve as a “special fund in the state treasury for the purpose of holding Bitcoin as a financial asset.”
In addition, after the five-year holding period, the state treasury will be allowed to transfer, sell, appropriate, or convert any Bitcoins in the fund to another cryptocurrency.
The bill was referred to the Rules Committee yesterday. This was to finalize the regulations and wait for full approval from lawmakers.
The Bitcoin reserve conversation is growing in the US
Illinois is not the first American state working to consider a Bitcoin reserve. Firstly, Texas Lieutenant Governor Dan Patrick announced creating a Bitcoin reserve as a key focus for the state in 2025.
It’s time for Texas to lead the way in establishing a Strategic Bitcoin Reserve. That’s why I filed SB 778, which, if passed and signed into law, would make Texas the first state in the nation to establish a Strategic Bitcoin Reserve. This would position our state at the… pic.twitter.com/dRdCt86Otr
— Charles Schwertner (@DrSchwertner) January 15, 2025
At least five more state legislatures in the US are seeking to establish Bitcoin or crypto reserves. Arizona and Utah strategic reserve bills have advanced out of committee.
Also, US Senator Cynthia Lummis has renewed calls for a strategic Bitcoin reserve. She argued that BTC could serve as a hedge against inflation and financial instability. In a post on X, she confirmed that holding public hearings on the proposal remains a top priority for the Trump administration.
Another milestone for crypto is that the Fed is now in alignment. Fed’s Chair Jerome Powell said that banks are free to serve with crypto, provided they effectively manage the associated risks. He insisted, “The threshold has been a little higher for banks engaging in crypto activities, and that’s because they’re so new.”
He also cleared the air about allegations that crypto companies are having trouble getting banking services in America. He insists that the Fed doesn’t want to cut off legal users. He explained that the Fed’s job is to look into how banks and crypto are connected by studying the banks: Not the other way around.
Bitcoin reserves have become attractive globally
A Bitcoin reserve is no longer a conversation of how and why – but a conversation of when and who will be the first. For starters, more institutions are interested in BTC, with mega institutions like BlackRock and Vanguard leading the way.
BTC ETFs have encouraged renewed interest in Bitcoin as a real investment. Bitcoin’s weak connection to standard assets like bonds makes it a good choice for spreading out the bank’s reserves. In addition, recent changes in US regulations under POTUS Trump have made things better for crypto.
Outside the US, the Czech National Bank (CNB) is also considering a historic shift in its investment policy. The country is exploring allocating up to 5% of its reserves to Bitcoin.
Governor Aleš Michl pointed out, “For the diversification of our assets, Bitcoin seems good.”
The CNB’s decision to invest in Bitcoin is an important step in the development of central banks. The Central European nation has jumped on the bandwagon that El Salvador helped start.
Meanwhile, countries have been cautioned by the likes of the IMF and World Bank to look into the inherent volatility risks associated with investing in Bitcoin.
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Source: https://www.cryptopolitan.com/illinois-proposes-strategic-bitcoin-reserve/