Note: According to Dennis Porter, CEO of the Satoshi Action Fund, the organization has publicly released its Bitcoin strategic reserve bill. Reportedly, the "Bitcoin Rights" bill passed by the Pennsylvania House of Representatives on October 25 was drafted by the Bitcoin advocacy group Satoshi Action Fund, which is the latest initiative to help lawmakers understand the nuances of blockchain technology and Bitcoin.

Strategic Bitcoin reserves are secure Bitcoin funds held by governments, aimed at protecting wealth and financial stability. Similar to gold reserves, Bitcoin reserves can hedge against currency devaluation and economic uncertainty. It provides flexibility in times of crisis, as Bitcoin's decentralized nature and limited supply allow it to withstand inflation and geopolitical risks. By holding a portion of state or national reserves in Bitcoin, governments can diversify their assets, reduce reliance on fiat currencies, and position themselves at the forefront of financial innovation - ensuring they are prepared for the development of the digital economy.

2025 Bitcoin Strategic Reserve Act

Section 1. Legislative Findings

The state legislature finds that:

• Inflation has eroded the purchasing power of assets in state-managed state funds and state pension funds. This erosion has diminished the value of state reserves, impacting the financial stability and economic security of the state, taxpayers, and residents.
• While the state government cannot directly control the national money supply or influence inflationary policies, the state has a responsibility to safeguard its financial resources from the effects of inflation and other economic uncertainties.
• Over the past 16 years, Bitcoin has seen significant value appreciation, with a market capitalization exceeding $1 trillion.
• Bitcoin is increasingly being accepted as an international medium of exchange, with treasury departments of countries around the world, including the United States, holding Bitcoin.
• Bitcoin is viewed as an anti-inflationary asset by sovereign nations and investment advisors like Blackrock, Fidelity, and Franklin Templeton.
• The [State Name] should have tools like Bitcoin to combat inflation.

Section 2. Legislative Purpose

The legislature intends to authorize the state treasury and pension funds to:

1. Allow the inclusion of Bitcoin and other potential digital assets as a store of value and provide protection against inflation, thereby preserving the purchasing power of state funds.
2. Ensure that the investment strategies of state treasury and pension funds are aligned with the goal of enhancing the state's economic security and financial resilience.
3. Maintain investment flexibility: allow for nimble investment decisions based on changing economic conditions and emerging opportunities that may provide better protection or returns.

Section 3. Definitions

In this chapter, the following terms have the following meanings:

1. "Exchange-Traded Product (ETP)": Any financial instrument traded on a U.S. regulated exchange, approved by the Securities and Exchange Commission, Commodity Futures Trading Commission, or state banking and securities departments, whose value is derived from an underlying pool of assets, including stocks, bonds, commodities, or indices.
2. "Bitcoin": The decentralized digital currency introduced in 2009 based on the white paper "Bitcoin: A Peer-to-Peer Electronic Cash System" by Satoshi Nakamoto. Bitcoin also refers to Bitcoin-based exchange-traded products regulated by the Securities and Exchange Commission.
3. "Digital Asset": Virtual currencies, cryptocurrencies, native digital assets, including stablecoins and Non-Fungible Tokens (NFTs), that confer economic, ownership, or access rights or privileges solely in digital form.
4. "Private Key": The unique cryptographic data element used to sign transactions on the blockchain, known only to the private key holder.
5. "Secure Custody Solution": A technology product or hybrid product and service with all of the following characteristics:

• Cryptographic private keys are known and accessible only by the governmental entity.
• Cryptographic private keys are accessed only in an encrypted environment and through end-to-end encrypted channels.
• Cryptographic private keys are never held, accessed, or controlled by any smart device.
• Any hardware storing the cryptographic private keys is located in a minimum of two geographically dispersed, specially designated secure data centers.
• The secure custody solution enforces a multi-party governance structure to authorize transactions, implement user access controls, and log all user-initiated operations.
• The secure custody solution provider implements disaster recovery protocols to ensure client access to assets in the event the provider becomes unavailable.
• The secure custody solution undergoes regular code audits and penetration testing, with any vulnerabilities promptly remediated.
1. "Qualified Custodian": Any federally or state-chartered bank, trust company, special-purpose custodian, or state-regulated company that custodies digital assets for approved exchange-traded products.

Section 4

1. The state treasurer may invest in Bitcoin using the following funds:
• The state general fund
• Budget stabilization reserve fund
• State investment fund
• Any other state fund deemed appropriate by the legislature
1. The state treasurer's investment in Bitcoin for public funds shall not exceed 10% of the total public funds in that account.
2. Any digital assets acquired by the funds listed in Section 4.1 shall be held:
• Directly by the state treasurer through a secure custody solution;
• By a qualified custodian on behalf of the state; or
• In the form of an exchange-traded product issued by a registered investment company.
1. The treasurer may lend such digital assets, if the lending does not increase the state's financial risk, under rules established to generate additional returns for the state.

Section 5

All tax payments made in Bitcoin shall be deposited into the state's general fund. The state general fund shall compensate in U.S. dollars any designated fund used for qualified digital assets.

Section 6

Any state pension fund may invest in exchange-traded products that have been formally registered with the Securities and Exchange Commission, Commodity Futures Trading Commission, or state securities office.