Pennsylvania Republicans Want to Make the State a Pioneer of Digital Investments by Buying Bitcoin Directly

With reinvigorated interest in cryptocurrency, Republican House legislators are vying to make Pennsylvania a pioneer of digital investments

As interest in cryptocurrency reignites, Republican lawmakers in the Pennsylvania House are vying to position the state at the forefront of digital investments—a move that skeptics say could pose significant risks to state coffers.

Rep. Mike Cabell, R-Dallas, introduced House Bill 2664 last week that would make Pennsylvania one of the first states to purchase Bitcoin directly. The Strategic Bitcoin Reserve Act would permit the state treasurer to allocate up to 10% of the general fund, emergency savings account and state investment fund in cryptocurrency.

According to Cabell, investing in Bitcoin serves as a hedge “against inflation.” The cryptocurrency operates on a decentralized system called blockchain, rendering its value independent of traditional market fluctuations.

However, despite currently riding a wave of enthusiasm following Donald Trump’s victory on a pro-crypto platform, Bitcoin and other cryptocurrencies have a history of volatility that some investors find off-putting. Trump himself stated he was “not a fan” of cryptocurrencies, which he claimed were “based on thin air” in a 2019 tweet, before ultimately shifting his stance on the issue.

At the time of this report, a single coin is valued at $92,406.06, and it has enjoyed a consistently upward trend, though day-to-day volatility is currently about double that of gold.

There is already precedent for a Bitcoin reserve at the federal level. The U.S. government currently holds an estimated 210,000 Bitcoin, valued at over $19 billion at the time of this writing, which amounts to about 1% of the total Bitcoin in circulation worldwide.

One major distinction between this stash and the investment being proposed in Pennsylvania is that the federal Bitcoin supply was largely confiscated in the course of prosecuting crime. Cryptocurrency enthusiasts are optimistic about the coin's future prospects under Trump. At the Bitcoin Conference in Nashville in July, the president-elect pledged his support for cryptocurrency, including a plan to create a Bitcoin and Crypto Presidential Advisory Council, build a strategic national Bitcoin stockpile around the existing supply and fire Securities and Exchange Commission Chair Gary Gensler “on day one.”

“I will appoint a new SEC chairman who believes America should build the future, not block the future, which is what they’re doing,” Trump said at the event. Gensler has become a target of crypto enthusiasts following several commission lawsuits against major crypto exchanges. Under Gensler's leadership, the commission has maintained the stance that most cryptocurrencies – with the notable exception of Bitcoin itself – are securities, which are heavily regulated.

“We are not afraid to litigate matters, whether against the best-resourced founders, the oldest firms, the newest industries, and yes, the largest crypto exchanges,” Gensler said in a speech last year. Cabell's legislation follows a bill proposed in May, House Bill 2481, that would create a framework for using blockchain and digital assets and bar the state from levying additional taxes on transactions conducted with crypto.

A lobbying group called the Satoshi Action Fund has been working with lawmakers across the country to advance Bitcoin-friendly agendas at the state level. The group anticipates that Cabell's legislation will be mirrored in several other states in the coming months, highlighting the economic and environmental benefits of Bitcoin mining.

Historically, the heavy energy use required by the computer systems used to mine Bitcoin, along with their production of electronic waste, has made it an environmentally costly currency, raising red flags and even leading to mining bans from state and national governments.

According to Satoshi, Bitcoin's decentralized nature allows mining operations to be set up anywhere, including locations where miners can capture methane gas to power their work. Advocates see this as an opportunity to partially address emissions from agriculture and the 300,000-700,000 orphan wells across the western half of the state.