Utah Moves to Become First US State to Invest in Bitcoin

The Utah state legislature has advanced a bill that would allow the state to invest in Bitcoin as a reserve asset, potentially making it the first U.S. state to do so. The bill, HB70, was passed by the House of Representatives on February 15 and is now awaiting approval from the Senate.

The bill, sponsored by Representative Marc Roberts, seeks to authorize the Utah State Treasurer to invest up to 20% of the state's permanent funds in Bitcoin. The funds would be managed by a third-party custodian, and the investment would be subject to certain risk management guidelines.

If approved, Utah would join a growing list of countries and institutions that have allocated a portion of their reserves to Bitcoin. Central banks in countries such as El Salvador, the Central African Republic, and Nigeria have already invested in Bitcoin, while private companies like MicroStrategy and Tesla have also added Bitcoin to their balance sheets.

The bill's sponsors argue that investing in Bitcoin can provide Utah with a hedge against inflation and currency devaluation. They also believe that the state can benefit from the potential appreciation of Bitcoin's value over time.

However, the bill has faced criticism from some lawmakers and financial experts who question the wisdom of investing in a volatile asset like Bitcoin. They argue that the state's permanent funds should be invested in more stable and predictable assets to ensure the long-term financial health of the state.

The bill's fate now rests with the Utah Senate, which will consider the measure in the coming weeks. If approved, the bill would then go to Governor Spencer Cox for his signature or veto.