Virginia lawmakers are transferring ahead with a proposal that might place the Commonwealth amongst a rising variety of states exploring direct publicity to bitcoin and different digital belongings by means 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 Basic Legal guidelines and Know-how Committee in a 13–2 vote.
Beneath the laws, Virginia could be approved to take a position state-held funds instantly 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 the way the bitcoin reserve would function. All funds appropriated for the aim, together with any bitcoin or cryptocurrency bought or acquired, could be credited into the reserve.
Notably, the proposal additionally accounts for belongings that could be generated by means of blockchain occasions reminiscent of forks or distributed by means of airdrops, making certain the state retains possession of any spinoff digital holdings.
In contrast to many state accounts, the reserve could be nonreverting, that means funds would stay within the reserve on the finish of every fiscal yr quite than returning to the overall fund.
SB557 consists of guardrails supposed to restrict speculative publicity. Any cryptocurrency bought utilizing reserve funds should have maintained a mean market capitalization of no less than $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 particular person” commonplace, balancing diversification and threat minimization. The invoice additionally permits the usage of derivatives if the Treasurer determines they serve the most effective curiosity of the fund.
To handle safety issues, the laws authorizes the Treasurer to contract with third-party entities, together with certified custodians that make use of safe applied sciences reminiscent of chilly storage, in addition to regulated liquidity suppliers to facilitate purchases and asset administration.
The Treasurer may fee unbiased audits by means 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 supply steerage on valuation strategies and funding coverage.
The invoice mandates transparency by means of biennial reporting. By December 31 of every even-numbered yr, 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 tendencies in cryptocurrency adoption and monetary innovation.
South Dakota lately launched Home Invoice 1155, which might permit the state to take a position as much as 10% of public funds in Bitcoin.
Earlier this yr, Rhode Island lawmakers launched Senate Invoice S2021 to briefly exempt small Bitcoin transactions from state revenue and capital positive aspects 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–based mostly companies to self-certify eligibility whereas holding easy information.
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 turned the primary U.S. state to permit its treasury to spend money on 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 the moment qualifies underneath the market-cap rule.
