Connecticut Bans State Crypto Use, Investments by 2025

Connecticut has enacted a significant law that prohibits the state and its local governments from using or investing in cryptocurrencies. The legislation, known as HB 7082 and formally titled Public Act 25-66, will come into effect on October 1, 2025. This law not only bans the state from accepting virtual currencies as payment but also prevents it from possessing any crypto assets, effectively ending any future plans for a state-owned Bitcoin reserve.

The new law introduces a comprehensive definition of virtual currency, which includes most cryptocurrencies such as Bitcoin and Ethereum. This broad definition ensures that the legislation covers a wide range of digital assets, leaving no room for ambiguity. The bill was unanimously approved by the Connecticut legislature, reflecting a strong bipartisan consensus against state-sponsored crypto activities. Connecticut's approach contrasts with other states that are actively exploring the use of digital assets, opting instead for a cautious and restrictive stance.

In addition to prohibiting crypto investments, the law imposes new regulations on companies involved in cryptocurrency transactions. These regulations aim to enhance user protection and transparency. Companies must provide clear and understandable disclosures about the risks associated with using crypto, including price volatility, lack of insurance, and fraud risks. These warnings must be displayed prominently in English to ensure users are fully informed.

Furthermore, the law mandates that companies provide receipts for all transactions and disclose who is holding the customer's assets. If a company uses another business to store crypto, this information must be disclosed to the customer. The legislation also includes additional safeguards for minors, requiring parental or legal guardian consent before anyone under the age of 18 can create a crypto account. This is a first for state law and underscores Connecticut's commitment to protecting vulnerable users.

The law also clarifies the ownership of digital assets, stating that virtual currencies held by licensed companies belong to the customer. This provision ensures that customers' rights are protected even if the company faces financial or legal issues. By implementing these regulations, Connecticut aims to bring crypto transactions under the same level of scrutiny and protection as conventional financial activities, thereby enhancing transparency and consumer safety.

While Connecticut has taken a strict stance on cryptocurrencies, other states in the U.S. are exploring different approaches. For instance, New Hampshire has enacted a bill allowing the establishment of a state Bitcoin reserve, and Texas has shown interest in using Bitcoin to diversify its financial portfolio. Arizona is also considering similar initiatives. However, not all states are embracing these ideas. In 2025, states such as Florida, Wyoming, South Dakota, and North Dakota have either stopped or withdrawn their crypto-related plans due to concerns about price volatility and regulatory uncertainty.