Virginia lawmakers are shifting ahead with a proposal that may place the Commonwealth amongst a rising variety of states exploring direct publicity to bitcoin and different digital property by means of public reserves.
Senate Invoice 557, patroned by Senator Reeves, would set up the Commonwealth Strategic Cryptocurrency Reserve Fund, a particular nonreverting fund housed within the state treasury and administered by the Virginia State Treasurer.
The measure superior this week after passing the Senate Normal Legal guidelines and Expertise Committee in a 13–2 vote.
Underneath the laws, Virginia could be approved to take a position state-held funds instantly into bitcoin or different qualifying cryptocurrencies, creating what supporters describe as a strategic reserve designed to modernize treasury administration and place the state for the way forward for bitcoin and digital finance.
The invoice lays out an in depth framework for a way the bitcoin reserve would function. All funds appropriated for the aim, together with any bitcoin or cryptocurrency bought or acquired, could be credited into the reserve.
Notably, the proposal additionally accounts for property which may be generated by means of blockchain occasions akin to forks or distributed by means of airdrops, making certain the state retains possession of any spinoff digital holdings.
Not like many state accounts, the reserve could be nonreverting, that means funds would stay within the reserve on the finish of every fiscal 12 months slightly than returning to the overall fund.
SB557 contains guardrails supposed to restrict speculative publicity. Any cryptocurrency bought utilizing reserve funds should have maintained a median market capitalization of no less than $500 billion over the earlier 24 months, a threshold that successfully limits eligibility primarily to bitcoin.
The Treasurer could be required to handle investments beneath a “prudent particular person” customary, balancing diversification and danger minimization. The invoice additionally permits the usage of derivatives if the Treasurer determines they serve one of the best curiosity of the fund.
To deal with safety considerations, the laws authorizes the Treasurer to contract with third-party entities, together with certified custodians that make use of safe applied sciences akin to chilly storage, in addition to regulated liquidity suppliers to facilitate purchases and asset administration.
The Treasurer may additionally fee unbiased audits by means of licensed public accountants.
As well as, SB557 would set up a five-member Strategic Cryptocurrency Reserve Advisory Committee, together with members with experience in digital asset investments, to supply steerage on valuation strategies and funding coverage.
The invoice mandates transparency by means of biennial reporting. By December 31 of every even-numbered 12 months, the Treasurer would publish and submit a report detailing the quantity and estimated worth of bitcoin and different cryptocurrencies held, modifications over time, and administration actions taken.
U.S. States embracing bitcoin
The proposal comes amid rising curiosity from U.S. states and municipalities in incorporating digital property into public portfolios, reflecting broader traits in cryptocurrency adoption and monetary innovation.
South Dakota just lately launched Home Invoice 1155, which might enable the state to take a position as much as 10% of public funds in Bitcoin.
Earlier this 12 months, Rhode Island lawmakers launched Senate Invoice S2021 to briefly exempt small Bitcoin transactions from state revenue and capital positive factors taxes, with a $5,000 month-to-month and $20,000 annual cap.
The invoice treats Bitcoin as a “digital, decentralized foreign money” and permits residents and Rhode Island–primarily based companies to self-certify eligibility whereas maintaining easy information.
The exemption would take impact January 1, 2027, and expire January 1, 2028, as a pilot program to cut back tax friction on on a regular basis Bitcoin use.
New Hampshire is one other state actively championing Bitcoin. In Could 2025, New Hampshire grew to become the primary U.S. state to permit its treasury to spend money on Bitcoin and different large-cap digital property, authorizing as much as 5% of sure public funds to be allotted into crypto beneath Home Invoice 302. BTC at present qualifies beneath the market-cap rule.
