Connecticut Bans State Bitcoin Investments Amid Crypto Regulation Trend

Connecticut has enacted a law that prohibits the state from investing in digital assets and bars the state government from establishing a strategic Bitcoin reserve. The legislation, H.B. 7082, was approved by both the state House of Representatives and the Senate without any opposing votes. This move is part of a broader effort to regulate state-level crypto activities and protect public funds from the risks associated with speculative investments.

The new law updates the state’s money transmission regulations, with a significant focus on crypto regulation. It mandates that crypto businesses engaging in money transmissions must disclose all material risks associated with crypto. Additionally, the bill requires legal guardian verification for users under the age of 18, providing protections for minors.

Connecticut’s action comes amidst a broader trend of states considering or implementing regulations around digital assets. While some states, such as New Hampshire, Arizona, and Texas, have approved state-level Bitcoin reserve laws, others like Florida, Wyoming, South Dakota, North Dakota, Pennsylvania, Montana, and Oklahoma have dropped crypto legislation. This hesitation reflects concerns over Bitcoin’s price volatility and its long-term viability as a reserve asset.

On the federal front, President Donald Trump signed an executive order establishing a strategic Bitcoin reserve. However, the order lacked concrete details, failing to generate significant excitement among traders. Connecticut’s decision to ban state investments in Bitcoin underscores the ongoing debate and uncertainty surrounding the role of digital assets in state and federal financial strategies.