Illinois and Indiana Introduce Bills to Establish Strategic Bitcoin Reserves

They join a growing list of US states exploring Bitcoin as a financial asset.

Several US states are exploring the integration of Bitcoin into their financial strategies. Among them, Illinois and Indiana have introduced bills that aim to establish a Strategic Bitcoin Reserve.

Illinois Proposes Bitcoin Reserve Fund

Illinois State Representative John M. Cabello has proposed House Bill 1844 (HB1844), also known as the Strategic Bitcoin Reserve Act. The bill highlights Bitcoin’s potential as a decentralized, finite digital asset that could serve as a hedge against inflation and economic volatility.

“A strategic bitcoin reserve aligns with Illinois’ commitment to fostering innovation in digital assets and providing Illinoisans with enhanced financial security,” the bill reads.

The proposed bill seeks to establish the Strategic Bitcoin Reserve Fund, which would be overseen by the State Treasurer. It includes provisions for accepting Bitcoin donations from residents and government entities.

Moreover, the bill specifies a minimum holding period of five years for any Bitcoin added to the fund. This means that the state would not be able to sell, transfer, or convert any Bitcoin in the fund into another cryptocurrency before the specified time.

The bill also outlines guidelines for securing and managing the fund, including measures to ensure transparency through regular reports. Additionally, it grants the State Treasurer the authority to establish necessary rules for the fund.

Indiana's Multi-Faceted Bitcoin Approach

In Indiana, House Bill 1322, authored by state Representative Jake Teshka and co-authored by Representatives Shane Lindauer and Cory Criswell, takes a broader approach. It encompasses both blockchain adoption and Bitcoin investment strategies.

The bill directs the Department of Administration to explore how blockchain technology could improve government efficiency, data security, and consumer experience in various domains, including licensing, permitting, and record-keeping.

“The department of administration (department) shall issue a request for information for purposes of exploring how the use of blockchain technology could be used by a state agency to: (1) achieve greater cost efficiency and cost effectiveness; and (2) improve consumer convenience, experience, data security, and data privacy,” HB1322 states.

Furthermore, the bill paves the way for state-managed investment in Bitcoin. It permits funds from the public employees’ retirement fund, state teachers’ retirement fund, and public officers' funds to be invested in approved Bitcoin exchange-traded funds (ETFs).

This includes both spot Bitcoin ETFs, which hold Bitcoin directly, and Bitcoin futures ETFs, which track Bitcoin's price movements through derivatives.

These initiatives follow recent developments in Utah and Arizona, where legislation has been introduced to allow the investment of public funds in digital assets. Additionally, Texas Lieutenant Governor Dan Patrick has highlighted the establishment of a Bitcoin Reserve as a top priority for 2025.

Similar proposals are expected to emerge in South Dakota and Kentucky, where state representatives are preparing to introduce bills that would create a Strategic Bitcoin Reserve, expanding the footprint of Bitcoin integration in US states.