Illinois Proposes State-Run Bitcoin Reserve

Illinois Bill HB1844 Proposes State-Run Bitcoin Reserve with Five-Year Holding Period for Potential Financial Innovation

Illinois is poised to become the first U.S. state to hold Bitcoin in its fiscal reserves, as State Representative John Cabello has introduced the Strategic Bitcoin Reserve proposal. The bill, referred to the Rules Committee on January 29, 2025, outlines a comprehensive framework for managing state-held Bitcoin. If approved, the Strategic Bitcoin Reserve Act would take effect immediately, positioning Illinois as a pioneer in state-level cryptocurrency adoption.

The proposed legislation grants the Illinois State Treasurer the authority to oversee the fund and accept Bitcoin donations from both state residents and government entities. A key aspect of the proposal involves a mandatory holding period: once Bitcoin enters state custody, it must be retained for at least five years before any transfers, sales, or conversions to other cryptocurrencies can occur. This provision reflects a long-term investment strategy rather than a speculative trading approach.

The bill includes provisions for fund management and security measures, as well as reporting requirements to ensure transparency in the fund’s operations. Illinois residents would have the opportunity to make voluntary Bitcoin donations to the state’s reserve. The proposal grants the State Treasurer the authority to establish and enforce rules for administering the reserve, including the ability to hire personnel specifically for managing the Bitcoin holdings and implementing necessary security protocols.

The initiative has drawn attention from prominent cryptocurrency advocates in Congress. Senator Cynthia Lummis, who has previously advocated for a national Strategic Bitcoin Reserve, announced her intention to hold public hearings on the concept of Bitcoin reserves. Support for Bitcoin reserves extends beyond U.S. borders, with the Czech National Bank considering allocating up to 5% of its €140 billion (approximately $145.6 billion) reserves to Bitcoin.

Meanwhile, in Texas, Governor Dan Patrick has declared the establishment of a “Texas Bitcoin Reserve” as one of his primary legislative goals for the 2025 session. This announcement indicates growing interest in state-level Bitcoin adoption across different regions of the United States. The Illinois proposal specifically addresses the logistics of accepting cryptocurrency contributions, outlining procedures for handling Bitcoin gifts from both private citizens and government entities, and establishing a clear framework for growing the reserve through donations.

Security considerations form a crucial component of the legislation. The proposal includes detailed provisions for protecting the state’s Bitcoin holdings, recognizing