America’s states are racing Washington to adopt crypto.
In capitols from Phoenix to Harrisburg, lawmakers are exploring creation of digital reserves.
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Twenty-one American states have now either adopted or formally considered various forms of public investment in crypto, according to Bitcoin Reserve Monitor, a new site tracking such proposals.
In particular, a race is heating up to see who will become the first to create a strategic crypto reserve. North Dakota has already rejected the idea. But such proposals are still pending in more than a dozen other state legislatures, with Maryland and Kentucky joining the fray last week.
Why it matters: Strategic crypto reserves could help states manage pension obligations and other financial challenges. Meanwhile, any buying by such deep-pocketed entities to build new reserves from scratch could bolster the broader token market, creating a boon for private-sector investors.
The state-level bills in the U.S. have garnered less press fanfare than possibile creation of a federal strategic bitcoin reserve — an idea floated by Republicans in Washington. But they could ultimately prove more fruitful.
Three factors that may make the states more apt than Washington to adopt crypto in 2025:
- Constitutional/Political Dynamics: The U.S. Constitution clearly stipulates that Congress is responsible for all spending. That should inevitably affect the federal government’s ability to build and maintain a strategic crypto reserve, regardless of President Trump’s stated support for the industry. If even a few members of Congress disagree, especially in the fractious House of Representatives, a national crypto reserve could quickly die on the vine.
- Monetary Policy: Washington already holds (and frequently uses) the power to print more of its own dollars to cover its expenses. The states can’t do this. Hence they arguably have greater economic incentives to get creative and, perhaps, adopt alternative stores of value like crypto.
- Fiscal Requirements: States have to balance their budgets; Washington famously doesn’t. Hence any windfall from a gain like bitcoin’s 122% price jump in 2024, for example, would be felt more tangibly at the state level than it would in Washington. So would any steep losses in the future, of course. But for now, as long as crypto remains in a bull market — and continues to beat traditional investment yardsticks like the S&P 500 in particular — the sector should continue to pique the states’ curiosity.
Political junkies might also take note of the bipartisanship of the states’ recent crypto push. A quick cross-referencing of Bitcoin Reserve Monitor and the election data site 270toWin shows that 14 states that have considered investment in digital assets so far are “red states” that were forecast to go for Trump ahead of November’s presidential election. But five were Harris-leaning “blue states,” and two (Pennsylvania and Arizona) were considered presidential swing states.
Also intriguing: The crypto-curious cohort includes Iowa and New Hampshire — two states famous for their early presidential primaries.
Is it too early to start speculating about the ’28 race?
