The end of 2024 and the beginning of 2025 have ushered in a notably optimistic period for the digital currency industry.
While conversations regarding Donald Trump’s Strategic Bitcoin [BTC] Reserve plan grow in momentum, various states are moving forward to incorporate Bitcoin into their financial structures.
Montana Takes Action
Montana is at the forefront of the Bitcoin Reserve movement. Recently, the House Business and Labor Committee in Montana approved a proposal that enables the state to possess Bitcoin and other digital currencies as reserve assets.
The passing of House Bill No. 429 occurred on February 19th with a 12-8 vote, split along party lines. Republican members unanimously supported the bill, while Democratic members opposed it. This legislation places Montana in the group of states that are exploring reserves backed by cryptocurrencies.
Being the fourth of its kind to reach a state legislature in the U.S., this bill introduces a dedicated revenue account.
This account is designated for investments in valuable metals, stablecoins, and virtual assets with a market capitalization surpassing $750 billion over the previous year.
Anticipated Outcomes
Montana’s Bitcoin Reserve Bill is making progress towards the state’s House, joining the ranks of Utah, Arizona, and Oklahoma in enacting legislation related to crypto reserves.
If approved, the bill will establish a distinct revenue account for investments in precious metals, stablecoins, and digital assets with high market capitalization.
An essential amendment eliminated the necessity for holdings to be overseen by a qualified custodian or channelled through an exchange-traded fund (ETF).
In the event of the bill’s passage, it will come into effect on July 1st. By mid-July, the state treasurer will be permitted to allocate up to $50 million into the account, expanding Montana’s financial diversification strategy.
Other States Engaged in the Bitcoin Reserve Competition
The trend towards state-supported Bitcoin Reserves is gaining momentum across the U.S. States such as Illinois, Kentucky, Maryland, and others are introducing similar proposals.
Utah has achieved significant legislative headway in this realm. Analysts suggest that Utah might be the initial state to enact a Bitcoin Reserve given its effective legislative processes and favorable political environment.
Efforts at the federal level persist, with Senator Cynthia Lummis advocating for nationwide acceptance.
Current market sentiment remains cautious, with Polymarket approximating a mere 10% probability of Donald Trump establishing a BTC Reserve in the initial hundred days.
Despite the uncertainty, Mathew Sigel, VanEck’s Head of Research, forecasts that approval of 20 state-led Bitcoin Reserve bills could drive demand for BTC to exceed $23 billion, reinforcing Bitcoin’s place in institutional finance.