Ohio Bill Proposes Strategic Bitcoin Reserve to Hedge Against Inflation

Spearheaded by Majority Whip Steve Demetriou and supported by six co-sponsors, the legislation seeks to enhance the state's treasury reserves by allowing the allocation of funds into Bitcoin.

Ohio lawmakers have introduced a bill that would establish a Strategic Bitcoin Reserve, allowing the state to allocate a portion of its general fund, budget stabilization fund, and prizes trust fund into the apex cryptocurrency.

Spearheaded by Majority Whip Steve Demetriou (R-District 23), the legislation has garnered support from six co-sponsors, including Reps. Thomas Hall (R-District 90), Brian Stewart (R-District 8), Scott Lipps (R-District 24), Adam Holmes (R-District 77), and Dick Stein (R-District 75).

The bill, designated as House Bill 447, proposes that Ohio can invest up to 10% of its general fund, budget stabilization fund, and prizes trust fund in Bitcoin. This move comes as a response to rising inflation and the need for innovative financial strategies.

Market expert Dennis Porter, founder of the Satoshi Action Fund, expressed strong support for the bill, highlighting its potential to safeguard Ohio residents’ tax dollars.

“This bill will protect Ohio residents’ tax dollars by allowing an option to invest in a strategic Bitcoin reserve, hedging against inflation and keeping Ohio on the cutting-edge of monetary and technological innovation,” Demetriou said in a statement on social media.

The bill adopts a technology-neutral stance by referring to “digital assets,” which could minimize political friction and facilitate quicker action to protect the purchasing power of state funds.

Notably, the proposal stipulates that only Bitcoin qualifies for the reserve, requiring a market capitalization of $750 billion and an average valuation over the preceding 12 months, imposing stringent qualifications.

The legislation also mandates robust custody solutions, either self-custody or a qualified custodian, to ensure the security of the state’s investments.

Trump’s Executive Order

This legislative effort coincides with a broader push for cryptocurrency acceptance at the federal level. Recently, President Donald Trump issued a comprehensive executive order on the protection and promotion of digital assets.

The order aims to ensure that banking services remain accessible to cryptocurrency companies, countering claims that regulators have pressured banks to sever ties with these businesses.

Moreover, the executive order banned the creation of central bank digital currencies (CBDCs) in the US, which could compete with existing cryptocurrencies.

In a another development, the US Securities and Exchange Commission (SEC) has rescinded accounting guidance that had previously hindered companies from safeguarding crypto assets for third parties.

Such regulatory adjustments are expected to promote greater adoption of digital assets by reducing operational complexities for firms involved in the crypto space.

On the campaign trail, Trump positioned himself as a “crypto president,” pledging support for the adoption of digital assets, a stark contrast to the regulatory approach taken by former President Joe Biden’s administration, which has pursued legal actions against major exchanges like Coinbase and Binance for alleged non-compliance with US laws.

At the time of writing, Bitcoin’s price is around $105,690, showing slight decreases of 0.3% over the past 24 hours and 0.7% over the past week.

Featured image from DALL-E, chart from TradingView.com