With Bitcoin (BTC) progressively establishing itself as a valuable asset, Illinois is poised to potentially become the first U.S. state to formally include the cryptocurrency in its fiscal reserves. This move follows the referral of the Strategic Bitcoin Reserve proposal to the Rules Committee by State Representative John Cabello.
The Bitcoin Strategic Bill, introduced on January 29th, aims to lay the foundation for Bitcoin to become the new strategic asset of Illinois. The legislation, if passed, would authorize the Illinois State Treasurer to manage the Bitcoin fund, permitting the acceptance of gifts, grants, and donations of BTC from Illinois residents and governmental entities.
For enhanced security and stability, the proposed legislation stipulates that once in the custody of the State, BTC must be retained for a minimum of five years. After this holding period, the State Treasurer could transfer, sell, or convert the BTC into another cryptocurrency.
The bill also includes provisions for the employment of a cryptocurrency treasurer, the management and securing of the fund, reporting on the fund’s status, and the voluntary donation of BTC by Illinois residents. Furthermore, the legislation also empowers the State Treasurer to adopt rules to administer the reserve.
This development comes on the heels of growing support for Bitcoin reserves. U.S. Congress proponent Cynthia Lummis, who has been advocating for a national Strategic Bitcoin Reserve, believes that Bitcoin could serve as a hedge against inflation and unstable economic conditions. She recently expressed her intention to hold public hearings on the Bitcoin Strategic Reserve, signaling a growing interest in the adoption of BTC-based reserves.
This interest isn’t restricted to the U.S. On January 29th, the Governor of the Czech National Bank, Aleš Michl, suggested that Czechia may be the first country in Western Europe to hold Bitcoin in its reserves. The Governor proposed allocating up to 5% of CNB’s €140 billion ($145.6 billion) reserves in BTC, a significant move towards institutionalizing cryptocurrency at the national level.
On the home front, Texas Governor Dan Patrick recently declared his intention to establish a “Texas Bitcoin Reserve” as one of his top legislative priorities for the session in 2025.
The progressive acceptance of Bitcoin by major banks and investment firms appears to be influencing U.S. policymakers to consider aligning state and federal reserves with this trend. If the Strategic Bitcoin Reserve Act is passed, Illinois could lead the way in the formal adoption of Bitcoin as a reserve asset, marking a significant milestone in the continuing legitimization of cryptocurrency.
