House Representatives in Pennsylvania have put forward a bill that would see a strategic Bitcoin reserve introduced at the state level. This comes after noise around a potential national Bitcoin reserve were amplified following Donald Trump securing reelection as President of the United States.
The bill would allow the state Treasurer to invest “up to 10%” of the State General Fund, Rainy Day Fund, and the State Investment Fund into Bitcoin. This is a move to protect Pennsylvania's funds against inflation, the legislative memo said, which has eroded the state’s purchasing power in recent years.
For the General Fund alone, this could see Pennsylvania purchase up to $970 million worth of Bitcoin.
“Inflation has impacted Pennsylvania’s purchasing power by nearly 20 percent over the past 4 years, and we need solutions that can offer stability in uncertain economic times,” the memo read. “Bitcoin, which has appreciated significantly over the years, can help Pennsylvania keep pace with inflation and economic change.”
In recent years, inflation peaked at 9.1% in June 2022 and has since fallen to 2.4% in September, according to the U.S. inflation calculator. This means that dollars held by the state during this time have technically decreased in value. Over this same period, Bitcoin (BTC) has climbed from approximately $22,900 to $89,150—a 289% increase.
For now, the bill has simply been introduced to the House with support from Pennsylvania Republican Reps. Mike Cabell and Aaron Kaufer. For it to be enacted, the bill must pass through eight more stages including reviews by the House, introduction to and reviews by the Senate, and finally an executive action.
This state specific Bitcoin move comes as the conversations around a national strategic Bitcoin reserve have heated up, following Trump’s reelection.
The Boosting Innovation, Technology, and Competitiveness Through Optimized Investment Nationwide Act—simply referred to as the Bitcoin Act—was floated by several U.S. politicians in July and early August but it lost steam following Bitcoin’s price plummeting.
The bill is supported by Trump and led by Sen. Cynthia Lummis (R-WY). If it were enacted in its current form, it would see the Department of Treasury purchase 1 million BTC over a five year period. This would total nearly 5% of the total supply of Bitcoin and, at its current price, would cost approximately $89 billion.
Once Trump’s next term was secured, Lummis took to Twitter to boast that the reverse was back on the cards. She told Decrypt, “we are better positioned than ever before to build a brighter economic future by creating a strategic Bitcoin reserve.”
Lummis claims the new strategic Bitcoin reserve would hold the leading cryptocurrency for 20 years before considering if the U.S. should sell. Still, similarly to Pennsylvania's Bitcoin reserve act, the bill is yet to move past being introduced to the Senate.
Skeptics think it’ll still take a long time to convince enough senators and representatives that this is a good idea, while Lummis eyed up the next Congress as the perfect time to get it over the line.
Edited by Stacy Elliott.