Virginia lawmakers are shifting ahead with a proposal that will place the Commonwealth amongst a rising variety of states exploring direct publicity to bitcoin and different digital belongings by way of public reserves.
Senate Invoice 557, patroned by Senator Reeves, would set up the Commonwealth Strategic Cryptocurrency Reserve Fund, a particular nonreverting fund housed within the state treasury and administered by the Virginia State Treasurer.
The measure superior this week after passing the Senate Normal Legal guidelines and Expertise Committee in a 13–2 vote.
Beneath the laws, Virginia could be licensed to speculate state-held funds straight into bitcoin or different qualifying cryptocurrencies, creating what supporters describe as a strategic reserve designed to modernize treasury administration and place the state for the way forward for bitcoin and digital finance.
The invoice lays out an in depth framework for a way the bitcoin reserve would function. All funds appropriated for the aim, together with any bitcoin or cryptocurrency bought or obtained, could be credited into the reserve.
Notably, the proposal additionally accounts for belongings that could be generated by way of blockchain occasions comparable to forks or distributed by way of airdrops, guaranteeing the state retains possession of any by-product digital holdings.
Not like many state accounts, the reserve could be nonreverting, which means funds would stay within the reserve on the finish of every fiscal 12 months quite than returning to the overall fund.
SB557 consists of guardrails meant to restrict speculative publicity. Any cryptocurrency bought utilizing reserve funds should have maintained a median market capitalization of at the very least $500 billion over the earlier 24 months, a threshold that successfully limits eligibility primarily to bitcoin.
The Treasurer could be required to handle investments underneath a “prudent individual” normal, balancing diversification and threat minimization. The invoice additionally permits the usage of derivatives if the Treasurer determines they serve one of the best curiosity of the fund.
To deal with safety considerations, the laws authorizes the Treasurer to contract with third-party entities, together with certified custodians that make use of safe applied sciences comparable to chilly storage, in addition to regulated liquidity suppliers to facilitate purchases and asset administration.
The Treasurer may additionally fee unbiased audits by way of licensed public accountants.
As well as, SB557 would set up a five-member Strategic Cryptocurrency Reserve Advisory Committee, together with members with experience in digital asset investments, to offer steering on valuation strategies and funding coverage.
The invoice mandates transparency by way of biennial reporting. By December 31 of every even-numbered 12 months, the Treasurer would publish and submit a report detailing the quantity and estimated worth of bitcoin and different cryptocurrencies held, modifications over time, and administration actions taken.
U.S. States embracing bitcoin
The proposal comes amid rising curiosity from U.S. states and municipalities in incorporating digital belongings into public portfolios, reflecting broader developments in cryptocurrency adoption and monetary innovation.
South Dakota lately launched Home Invoice 1155, which might permit the state to speculate as much as 10% of public funds in Bitcoin.
Earlier this 12 months, Rhode Island lawmakers launched Senate Invoice S2021 to quickly exempt small Bitcoin transactions from state revenue and capital good points taxes, with a $5,000 month-to-month and $20,000 annual cap.
The invoice treats Bitcoin as a “digital, decentralized forex” and permits residents and Rhode Island–primarily based companies to self-certify eligibility whereas maintaining easy data.
The exemption would take impact January 1, 2027, and expire January 1, 2028, as a pilot program to scale back tax friction on on a regular basis Bitcoin use.
New Hampshire is one other state actively championing Bitcoin. In Could 2025, New Hampshire grew to become the primary U.S. state to permit its treasury to put money into Bitcoin and different large-cap digital belongings, authorizing as much as 5% of sure public funds to be allotted into crypto underneath Home Invoice 302. BTC at present qualifies underneath the market-cap rule.