New Hampshire has become the first US state to officially create a reserve fund utilizing Bitcoin, signaling its intent to integrate cryptocurrency into its financial system.
Reasons for New Hampshire's Embrace of Bitcoin
The decision to establish a reserve fund followed the signing of HB 302, a bill that outlines the creation of a Bitcoin and Digital Assets Reserve Fund. This law reflects a model proposed by the Satoshi Action Fund, an organization led by Dennis Porter that advocates for Bitcoin integration into state policies. The bill explicitly allows the investment of public funds in cryptocurrencies and precious metals with a market cap exceeding $500 billion. Currently, Bitcoin qualifies, while Ethereum may be added during favorable market conditions.
How New Hampshire's Bitcoin Reserve Will Work
Under this framework, up to 10% of New Hampshire’s general funds may be allocated to cryptocurrency investments. This initiative aims to inspire national treasurers to adopt a similar approach. Porter emphasizes that other states can benefit from a clear blueprint to protect resources and diversify reserves. This action marks not only a legislative success, but also a significant step towards mainstream adoption of Bitcoin in government reserves.
Reactions to New Hampshire's Strategy
The US federal stance on retaining rather than liquidating existing digital currencies indicates an environment more receptive to crypto assets. This approach, combined with ongoing negotiations to form Bitcoin reserves across the country, shows a growing interest at both state and federal levels. Key points from New Hampshire's strategy include: implementation of HB 302 allowing cryptocurrency reserve funds; ability for public entities to invest in Bitcoin with Ethereum as a possible future candidate; allocation of up to 10% of its treasury to crypto and precious metals; and the model developed by the Satoshi Action Fund serving as a nationwide template.
New Hampshire's decision to become the first state with a Bitcoin-based reserve fund highlights the relevance of cryptocurrency in modern financial systems. This initiative may influence other states looking to integrate digital assets into their financial frameworks.
