- Florida lawmakers propose investing state funds in Bitcoin to protect against inflation.
- The bill allows Bitcoin tax payments and ensures funds are managed with strict security.
- If approved, Florida would join other states in adding Bitcoin to its financial strategy.
Florida lawmakers have introduced a bill that would allow public funds to be invested in Bitcoin. Senator Joe Gruters and Representative Webster Barnaby argue that inflation erodes the financial reserves, necessitating an additional financing plan. The bill, titled SB 550: Investments of Public Funds in Bitcoin, would permit the state’s Chief Financial Officer to allocate up to 10% of public funds into Bitcoin. These funds include the Budget Stabilization Fund, the General Revenue Fund, and various trust money.
Besides, the law would enable the state to accept Bitcoin for taxes and fees. Any BTC collected would be converted to USD before being deposited into the state’s General Revenue Fund. This move aims to incorporate crypto into the financial framework while adhering to existing policies.
State Oversight and Threat Management
The amendment grants the CFO authority to manage and regulate Bitcoin investments while ensuring compliance with state financial guidelines. To mitigate risk, the statute mandates that private keys be securely encrypted, ensuring the protection of state-held Bitcoin assets.
Moreover, the measure outlines multiple custody options for holding Bitcoin, including direct ownership, Bitcoin-backed exchange-traded instruments, or third-party custodianship. Additionally, Bitcoin lending is allowed as long as it does not expose the state to undue financial risk. This initiative aligns with efforts to diversify public resources and tackle increasing pressures.
Furthermore, Florida’s revised investment strategy also applies to state pension funds, which are overseen by the State Board of Administration. This inclusion signals growing governmental and institutional interest in digital assets as an emerging financial tool.
Related: Utah Becomes the Second State to Accept Bitcoin Reserve Bill
Growing Trend of State-Level Bitcoin Reserves
Florida joins a growing list of U.S. states considering Bitcoin reserves as part of their financial strategies. Should the bill pass, Florida would join a growing number of states incorporating Bitcoin into their financial strategies alongside North Carolina. Previously, Texas, Wyoming, and Ohio adopted similar measures.
Additionally, the proposal seeks to allocate up to 10% of surplus state reserves into Bitcoin, reinforcing its role in public finance. Matthew Sigel, Head of Research at VanEck, suggests that Bitcoin reserves could strengthen U.S. competitiveness in financial technology, artificial intelligence, and energy sectors. As inflation continues to challenge state reserves, could more governments turn to Bitcoin as a hedge against economic instability?
