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America’s Bitcoin Push: Three States to Create Local Reserves
America is embracing Bitcoin with open arms. Approximately every fifth American owns some BTC, and the U.S. President is pushing to create a strategic Bitcoin reserve. Three states, Ohio, Texas, and Pennsylvania, are working on local reserves, with proposals expected to pass soon.
Local Proposals vs. Federal Bill: What’s the Difference?
The main distinction between the local proposals and the federal-level proposal lies in their end goals. The federal bill, introduced by Wyoming Sen. Cynthia Lummis, aims to cover the national debt and calls for purchasing one million BTC to be stored in the U.S. Treasury. In contrast, the local proposals have different objectives.
The Texas bill focuses on accumulating Bitcoin through tax collections and donations, with a minimum five-year embargo on selling state Bitcoin. Ohio and Pennsylvania aim to accumulate BTC as a hedge against the eroding USD value, with local treasuries buying Bitcoin.
The Cynthia Lummis Bill: A Means to Pay Down National Debt
The Lummis bill, introduced in July 2024, is called the Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act. The proposal aims to pay down the U.S. national debt and addresses soaring inflation rates. The bill suggests establishing a U.S. Treasury-controlled decentralized network of Bitcoin vaults and purchasing one million BTC, approximately 5% of the total supply.
The Local Bills: Texas, Ohio, and Pennsylvania
The Texas bill, introduced by Texas State Representative Giovanni Capriglione, allows local residents to pay taxes and donate cryptocurrency to the state, which will be exchanged for Bitcoin. The accumulated BTC will be stored offline for at least five years.
The Ohio bill, introduced by Rep. Derek Merrin, suggests setting up a Bitcoin fund within the state treasury, allowing the state to invest in Bitcoin as a hedge against USD devaluation.
The Pennsylvania bill proposes investing up to 10% of the State General Fund in Bitcoin to combat inflation, which translates to nearly one billion dollars.
Will These Bills Pass?
While the bills have been introduced, there is no guarantee they will pass. Statistically, only 20% of state-level bills become laws. The success of these bills depends on various factors, including the persistence of lobbyists. However, if the strategic Bitcoin reserve is not created, and state-level reserves are successfully set, they may become leading international cryptocurrency hubs.
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