Republican Senator Peter Durant of Worcester County, Massachusetts, has introduced legislation aimed at establishing a “strategic bitcoin reserve.”
This initiative marks a significant step for cryptocurrencies in a traditionally Democratic stronghold, such as Massachusetts. <a target="_blank" href="https://x.com/Dennis_Porter_/status/1880316897209774338″ target=”_blank” rel=”noopener nofollow”>the first “Deep blue state” to consider such legislation.
Senator Durant defends bitcoin
He bill proposes the creation of a separate fund known as the Commonwealth Strategic bitcoin Reserve, which would be managed by the state treasurer.
The legislation recognizes the growing widespread acceptance of bitcoin, and Durant says the time has come for the State to invest in digital assets as part of its financial strategy.
Under the draft, the state treasurer would have authority to invest in bitcoin and other digital assets using unspent, uncommitted or uncommitted funds.
Notably, the proposed legislation includes a cap that limits cryptocurrency investments to no more than 10% of the total amount deposited in the Commonwealth Stabilization Fund, which currently stands at $9 billion.
Durant emphasized that the legislation does not advocate a complete divestment of traditional assets. “It's not like we're saying get rid of everything and put it in bitcoin,” he said. “But we do think it makes sense as part of the Commonwealth's portfolio.”
Treasurer Goldberg has not yet intervened
The bill also allows the state treasurer to hold digital assets securely through qualified custodians or in the form of exchange-traded products (ETPs).
Additionally, it grants the treasurer the ability to lend bitcoin or other digital assets to generate additional returns, as long as it does not increase the state's financial risk.
Despite enthusiasm for the bill, it has not yet been discussed with Deb Goldberg, the state treasurer and a Democrat. A spokesperson for Goldberg's office. <a target="_blank" href="https://commonwealthbeacon.org/politics/political-notebook-maura-healeys-echo-bitcoin-strategic-reserve/” target=”_blank” rel=”noopener nofollow”>said CommonWealth Beacon that the treasurer has not yet taken a position on cryptocurrencies, but will review and provide comments on the proposal when requested.
The introduction of this bill comes amid a broader debate over the role of cryptocurrencies in state finances. While some, like Durant, defend its potential benefits, others, including prominent figures like Senator Elizabeth Warren, have expressed skepticism and called for stricter regulations.
Featured image of DALL-E, chart from TradingView.com
