TLDR
- Illinois may become first US state to hold Bitcoin in fiscal reserves through new Strategic Bitcoin Reserve proposal
- State Treasurer would manage the fund, accepting BTC gifts and donations with 5-year minimum hold period
- Bill referred to Rules Committee on Jan 29, 2025, for fast-track approval process
- Czech National Bank considering 5% allocation of its $145.6B reserves to Bitcoin
- Texas Governor announces Bitcoin Reserve as top legislative priority for 2025
In a groundbreaking move, Illinois could become the first U.S. state to hold Bitcoin in its fiscal reserves. State Representative John Cabello has introduced the Strategic Bitcoin Reserve proposal, which was referred to the Rules Committee on January 29, 2025, for expedited approval consideration.
The proposed legislation outlines a comprehensive framework for managing state-held Bitcoin. Under the bill, the Illinois State Treasurer would oversee the fund and have the authority to accept Bitcoin donations from both state residents and government entities.
One key aspect of the proposal involves a mandatory holding period. Once Bitcoin enters state custody, it must be retained for at least five years before any transfers, sales, or conversions to other cryptocurrencies can occur.
The bill includes provisions for fund management and security measures. It also establishes reporting requirements to ensure transparency in the fund’s operations. Illinois residents would have the opportunity to make voluntary Bitcoin donations to the state’s reserve.
If approved, the Strategic Bitcoin Reserve Act would take effect immediately. This timing could position Illinois as a pioneer in state-level cryptocurrency adoption, marking the first formal Bitcoin reserve strategy implemented by any U.S. state.
The proposal grants the State Treasurer authority to establish and enforce rules for administering the reserve. This includes the ability to hire personnel specifically for managing the Bitcoin holdings and implementing necessary security protocols.
The initiative has drawn attention from prominent cryptocurrency advocates in Congress. Senator Cynthia Lummis, who has previously advocated for a national Strategic Bitcoin Reserve, announced on January 30 her intention to hold public hearings on the concept of Bitcoin reserves.
One of the first orders of business will be to hold public hearings on the Strategic Bitcoin Reserve.
— Senator Cynthia Lummis (@SenLummis) January 29, 2025
Support for Bitcoin reserves extends beyond U.S. borders. Aleš Michl, Governor of the Czech National Bank, revealed on January 29 that Czechia might become the first Western European nation to include Bitcoin in its reserves. The bank is considering allocating up to 5% of its €140 billion (approximately $145.6 billion) reserves to Bitcoin.
The Czech National Bank’s potential move represents a major step toward institutional cryptocurrency adoption at the national level. This consideration by a European central bank adds weight to the growing acceptance of Bitcoin as a reserve asset.
Meanwhile, in Texas, Governor Dan Patrick has declared the establishment of a “Texas Bitcoin Reserve” as one of his primary legislative goals for the 2025 session. This announcement indicates growing interest in state-level Bitcoin adoption across different regions of the United States.
The Illinois proposal specifically addresses the logistics of accepting cryptocurrency contributions. The bill outlines procedures for handling Bitcoin gifts from both private citizens and government entities, establishing a clear framework for growing the reserve through donations.
Security considerations form a crucial component of the legislation. The proposal includes detailed provisions for protecting the state’s Bitcoin holdings, recognizing the unique challenges of securing digital assets compared to traditional state reserves.
The bill also mandates regular reporting on the fund’s status. This transparency requirement aims to keep both government officials and the public informed about the state’s Bitcoin holdings and their management.
The five-year holding requirement serves as a stabilizing measure, preventing short-term trading of the state’s Bitcoin reserves. This provision reflects a long-term investment strategy rather than speculative trading approach.
If enacted, the legislation would create precedent for other states considering similar initiatives. The bill’s structure could serve as a template for other jurisdictions looking to establish their own Bitcoin reserves.
