Pennsylvania’s New Bitcoin Reserve Bill Mines Interest in Senate as Trump Gets Ready for Office

Pennsylvania legislators are considering a new bill that would allow the state treasury to allocate up to 10% of specific funds into Bitcoin (BTC).

The proposal, led by Representative Mike Cabell, seeks to address inflation and economic volatility by using Bitcoin as a financial hedge. 

Cabell introduced the bill in the House on November 13, framing it as a strategy to add stability to Pennsylvania’s financial reserves during uncertain economic times. This comes as Donald Trump gets ready to take office in January, and market observers are expecting to see the creation of a new Bitcoin reserve fund.

More Interest in the Bill

Under the proposed legislation, Pennsylvania’s Treasurer would be authorised to invest a portion of the General Fund, Rainy Day Fund, and State Investment Fund in Bitcoin. Together, these funds hold substantial assets, with the General Fund valued at over US$9.7B (AU$15B) and the Rainy Day Fund at approximately US$7B (AU$10.8B) as of November 2024.

Cabell highlighted the interest from financial giants like BlackRock and Fidelity, which have turned to Bitcoin to fortify their portfolios against market fluctuations:

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This bill, referred to as HB 2664, also has the support of Representative Aaron Kaufer as a co-sponsor. The bill’s passage remains uncertain as it continues through legislative proceedings.

Interestingly, the bill appears to reflect the framework outlined by the Satoshi Action Fund, a Bitcoin-focused advocacy organisation. Dennis Porter, who co-founded the organisation, praised the state’s efforts during a Twitter Spaces discussion, viewing it as a proactive move to counter inflation’s impact on state finances. 

Not the first time Pennsylvania has taken a move in the digital asset space. 

For instance, In October, Pennsylvania’s House passed a “Bitcoin rights” bill, HB 2481, which was also backed by the Satoshi Action Fund. The idea behind the legislation is to create a regulatory environment that safeguards self-custody and supports crypto-based transactions.

A BTC Arms Race?

Some countries have already incorporated Bitcoin into their official holdings; El Salvador and Bhutan, for example, have invested in Bitcoin as part of their national reserves, underscoring the growing appeal of digital assets in governmental finance.

However, Galaxy Digital founder Mike Novogratz has speculated that President-elect Donald Trump may not support establishing a national Bitcoin reserve. And even if he does, it would be problematic for the Bitcoin community as it would turn it into a BTC arms race, he said during a Bloomberg interview.

Pennsylvania’s interest in Bitcoin parallels broader efforts among Republicans at the national level, particularly around inflation-resistant assets. 

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Following the recent election results, Senator Cynthia Lummis indicated plans to advocate for a federal Bitcoin reserve. With Republicans set to gain Senate control in 2025, discussions around a national Bitcoin reserve could gain momentum.