TL;DR
- Kentucky proposes a bill to establish a Bitcoin reserve, making it the 16th state to consider such legislation amid growing interest in cryptocurrencies as financial safeguards.
- The Kentucky Bitcoin Strategic Reserve Act aims to allocate up to 10% of the state’s public funds into Bitcoin and other high-market-cap cryptocurrencies, alongside eliminating sales taxes on gold and silver.
- This move is part of a national trend, with multiple states considering similar legislation, driven by inflation concerns and the increasing adoption of cryptocurrencies at both state and federal levels.
Kentucky became the 16th U.S. state to propose legislation establishing a strategic Bitcoin reserve this week, signaling a rapid shift in how governments view cryptocurrency as a financial safeguard. Representative TJ Roberts (R-KY) announced the bill on social media, framing it as a way to “shield Kentuckians from economic instability” caused by inflation and federal monetary policies.
The move aligns with a broader trend: At least 16 states are now actively considering or advancing bills to allocate public funds—including pensions and treasury reserves—into Bitcoin, with Arizona leading the charge after its Senate Finance Committee approved a similar proposal in January46.
Key Provisions of Kentucky’s Bitcoin Reserve Bill
The Kentucky Bitcoin Strategic Reserve Act aims to allocate up to 10% of the state’s public funds—mirroring proposals in Arizona, Pennsylvania, and Ohio—into Bitcoin and other cryptocurrencies meeting a $500 billion market cap threshold.
The bill also seeks to eliminate sales taxes on gold and silver and bans CBDCs, which Roberts argues threaten financial privacy. Backed by bipartisan lawmakers, including Representatives Steve Doan and Candy Massaroni, the proposal positions Kentucky as a contender to rival Wyoming’s crypto-friendly regulatory environment.
A National Movement Fueled by Inflation Concerns
States are racing to adopt Bitcoin reserves amid rising skepticism of federal fiscal policies. Dennis Porter, CEO of the Satoshi Action Fund, predicts 15 states will pursue such legislation in 2025, driven by inflation fears and former President Donald Trump’s endorsement of a national Bitcoin reserve.
Arizona’s recently approved bill allows investments in Bitcoin through pension systems, while Texas and Florida have explored accepting taxes and fees in cryptocurrency. Critics, however, warn of risks. Dennis Kelleher of Better Markets called state-level crypto investments “disastrous for tens of millions of retirees” if market volatility erodes pension funds.
Federal Parallels and Global Implications
The state-level surge mirrors federal efforts led by Senator Cynthia Lummis (R-WY), whose BITCOIN Act proposes a national reserve of 1 million BTC over five years. While her bill stalled in 2024, the political landscape shifted after crypto PACs spent $40 million to unseat opposition lawmakers, paving the way for renewed momentum in 2025.
