US States Embrace Crypto: Kentucky, North Carolina, Arizona, Oklahoma Lead Legislation

In March 2025, several US states are making significant strides in cryptocurrency legislation, shifting their perspective from viewing digital assets as speculative to recognizing their strategic value in financial planning. This trend is evident in various legislative initiatives aimed at enhancing crypto adoption, promoting Bitcoin self-custody, and incentivizing mining activities.

Kentucky has taken a notable step forward with the passage of the “Blockchain Digital Asset Act” (HB701), signed into law by the state governor on March 24. This legislation protects residents' right to self-custody Bitcoin and legalizes crypto mining, positioning Kentucky as a potential blockchain mining hub. The state's abundant energy resources from coal and hydropower give it a competitive edge in attracting crypto-mining companies, contributing to 11% of the US Bitcoin hashrate.

North Carolina is also advancing cryptocurrency integration into its public financial system. Bills H506 and S709 propose allocating up to 5% of the state’s public funds to digital assets, while Bill H92 suggests a 10% allocation for strategic reserves. If enacted, these initiatives could make North Carolina a pioneer in using cryptocurrency to safeguard public funds from inflation and economic volatility. Lawmakers are expediting discussions, with decisions expected in the coming weeks.

Arizona is joining the trend with the approval of two bills by the state’s House Rules Committee. The Digital Assets Strategic Reserve Fund Bill (SB1373) allows for the creation of a digital asset reserve funded by seized assets, with the treasurer able to invest up to 10% annually. The Arizona Bitcoin Strategic Reserve Act (SB1025) permits the state treasury and pension system to invest up to 10% of their funds in Bitcoin. Additionally, Oklahoma has passed the Strategic Bitcoin Reserve Bill (HB1203), allowing the state treasurer to invest public funds in Bitcoin and other large-market digital assets, as well as stablecoins.

This wave of legislative activity is part of a broader trend, with 23 out of 50 US states having introduced Bitcoin reserve bills. If enacted, these bills could drive significant Bitcoin purchases, according to the analyst's forecast. The support from the Trump administration, including the establishment of a Federal Strategic Bitcoin Reserve, has further encouraged states to reshape their financial policies.

This rapid legislative trend across various states marks a critical juncture for cryptocurrency integration into the public sector. States are increasingly recognizing the value of cryptocurrency not just as a speculative asset, but as a resource for economic stability and growth. As proposed bills progress, the focus will undoubtedly be on balancing innovation with regulatory frameworks to protect investors and public funds alike.