Texas is moving forward with plans to introduce a strategic Bitcoin reserve. State Rep. Giovanni Capriglione announced yesterday that he has submitted a bill that will enable the state to accept donations, fees, and taxes in the form of bitcoin, with the condition that it be held for a minimum of five years.
“Probably the biggest enemy of our investments is inflation,” said Capriglione. “A strategic bitcoin reserve, investing in bitcoin, would be a win-win for the state.”
Texas is the second US state to consider incorporating Bitcoin into its financial strategy. In November this year, legislation to form the Pennsylvania Bitcoin Strategic Reserve was introduced, with plans to allocate up to 10% of its treasury reserves to Bitcoin.
This came after the Pennsylvania House of Representatives passed what is informally called the Bitcoin Rights Bill in October, giving Pennsylvania residents the option of Bitcoin as a potential payment method while safeguarding their rights to manage their own cryptocurrency.
“By enacting this legislation, we can make the Commonwealth a friendly place for blockchain innovation and provide our citizens with the tools to engage in the digital economy safely,” according to Rep. Mike Cabell, who sponsored House Bill 2481 – or the Digital Assets Authorization Act – as it is formally known.
The moves to establish strategic Bitcoin reserves by both Texas and Pennsylvania are positive news for the cryptocurrency economy, albeit at state-level, not yet federal. However, Dennis Porter – CEO of NPO Satoshi Action Fund, who worked with Capriglione on the draft legislation – is optimistic.
“The state level, in our opinion, is the best place to create political momentum for bitcoin,” he said in an interview on CNBC New York. “The very best thing that we can be doing is passing this legislation at the state level, providing political momentum for federal legislation.”
Bitcoin, which has been experiencing a post-US election boom – reaching the $100k milestone – continued to rally following yesterday’s announcement of Texas’ Strategic Bitcoin Reserve, although at the time of writing, it had dipped slightly.
“Over its short history, Bitcoin has seen both major surges and sell-offs,” asset manager BlackRock noted in a report released earlier this week. BlackRock’s iShares Bitcoin Trust ETF currently manages some $53.8bn in assets.
The Black Rock report adds that this volatility, “plus Bitcoin’s unique characteristics, raises the question of what role it should play in portfolios.” The financial giant advises that investors place a maximum of 2% of Bitcoin in their portfolio.
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