Kentucky Introduces Bitcoin Reserve Bill, Becoming the 16th US State to Consider Such Legislation

Kentucky has become the 16th US state to introduce legislation aimed at establishing a Bitcoin reserve, highlighting the growing adoption of digital assets at the state level.

Kentucky has joined the growing list of US states seeking to establish a Bitcoin reserve, with a new bill aiming to allocate a portion of excess state funds to digital assets.

Kentucky State Representative Theodore Joseph Roberts introduced bill KY HB376 on Feb. 6, which could authorize the State Investment Commission to place up to 10% of excess state reserves in digital assets, such as Bitcoin (BTC).

The bill doesn’t specify any particular cryptocurrencies but outlines criteria that could apply to digital assets other than stablecoins with a market capitalization of over $750 billion, averaged over the previous calendar year.

Bitcoin is the only cryptocurrency that fits this description, given its roughly $1.9 trillion market value. For comparison, Ether (ETH) has a market capitalization of around $420 billion.

Kentucky is now the 16th US state to introduce legislation for a Bitcoin reserve, following Arizona, Alabama, Florida, Massachusets, Missouri, New Hampshire, North Dakota, South Dakota, Ohio, Oklahoma, Pennsylvania, Texas, Utah, Kansas and Wyoming.

As the 16th state to introduce such a bill, Kentucky’s move could pave the way for a strategic Bitcoin reserve at the federal level, according to Anndy Lian, an author and intergovernmental blockchain expert.

“If Kentucky advances this, it creates a blueprint for others to follow,” Lian told Cointelegraph, adding:

“Let’s not forget the consumer protection angle: if Bitcoin’s volatility tanks, taxpayers could be on the hook, which raises serious governance questions.”

Bitcoin’s volatility could pose challenges for a state-led initiative, Lian noted, adding that the bill’s language and the implementation strategy will be crucial.

Despite the volatility concerns, Kentucky’s bill is a “massive vote of confidence in Bitcoin,” which could inspire more adoption, according to Lian. He added:

“This bill also comes a week after the state of Illinois announced plans for a Bitcoin reserve bill that proposed a minimum BTC holding strategy of five years.”

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