TL;DR
- The proposed bill allows the state treasurer to invest up to 10% of various public funds in digital assets.
- Digital assets must meet strict security and stability requirements, such as a market capitalization exceeding $500 billion or complying with stablecoin regulations.
- The law also guarantees self-custody rights and establishes stringent encryption requirements to protect public funds.
The state of Utah has introduced an innovative bill that authorizes the state treasurer to invest public funds in cryptocurrencies, joining the growing trend of digital asset adoption across the United States. The proposal, known as the “Blockchain and Digital Innovation Amendments” (H.B. 230), was introduced on Monday by State Representative Jordan Teuscher. It aims to open the door to new forms of investment in the region’s financial future, positioning Utah as a leader in digital asset integration and innovation.
The bill would permit up to 10% of various state funds, including the General Fund Budget Reserve Account, the Income Tax Fund, and the Medicaid Growth Reduction and Budget Stabilization Account, to be allocated to digital assets, provided they meet strict security and stability criteria. Specifically, the assets must have a market capitalization exceeding $500 billion, measured over a 12-month period, or be stablecoins backed by U.S. dollars or high-quality liquid assets and approved by U.S. regulatory authorities.
Security Requirements and Protection of Investor Rights
One of the bill’s standout features is its focus on safeguarding public funds and protecting citizens’ self-custody rights. The legislation mandates that private keys for digital assets be stored exclusively in an encrypted environment accessible only through end-to-end encrypted channels. Additionally, the data related to these assets must be stored in at least two geographically diversified and secure data centers, ensuring both security and redundancy.
The bill also highlights the importance of preserving individuals’ rights to self-custody their digital assets, stipulating that no state or local government entity may restrict or prohibit the use of self-hosted or hardware wallets for this purpose, empowering individuals to have full control over their investments.
Utah’s proposal aligns with other state-level efforts in the U.S. to integrate cryptocurrencies into financial strategies. Nationally, states like Oklahoma and New Hampshire are also promoting laws to manage large Bitcoin reserves, while Texas has proposed alternative approaches to involving digital assets in its budgets. If approved, this legislation would take effect on May 7, 2025, making Utah the 11th U.S. state to advance such measures and marking a significant step toward mainstream acceptance of digital assets in public finance.
