Note: Dennis Porter, CEO of Satoshi Action Fund, posted on social media that the agency has made public its Bitcoin Strategic Reserve Act. It is reported that the "Bitcoin Rights" bill passed by the Pennsylvania House of Representatives on October 25 was drafted by the Bitcoin advocacy organization Satoshi Action Fund and is the latest move to help legislators understand the nuances of blockchain technology and Bitcoin.
Strategic Bitcoin reserves are safe Bitcoin funds held by governments to protect wealth and financial stability. Similar to gold reserves, Bitcoin reserves can hedge against currency depreciation and economic uncertainty. It provides flexibility in times of crisis because Bitcoin's decentralized nature and limited supply make it resistant to inflation and geopolitical risks. By holding part of a state or national reserve in Bitcoin, governments can diversify their assets, reduce their reliance on fiat currencies, and position themselves at the forefront of financial innovation - ensuring they are prepared for the development of the digital economy.
The Bitcoin Strategic Reserve Act of 2025
Section 1. Legislative Investigation
The state legislature concluded:
Inflation has eroded the purchasing power of assets held in state funds and state retirement funds managed by state coffers. This erosion has reduced the value of state reserves and has affected the financial stability and economic security of the state, taxpayers, and residents.
Although state governments cannot directly control the nation’s money supply or policies that influence inflation, states have a responsibility to safeguard their financial resources against inflation and other economic uncertainties.
Over its 16-year history, Bitcoin has risen significantly in value, with a market capitalization of more than $1 trillion.
Bitcoin is increasingly being accepted as an international medium of exchange, and is held by treasuries around the world, including the United States.
Bitcoin is seen as an inflation-fighting asset by sovereign nations and investment advisers like Blackrock, Fidelity and Franklin Templeton.
“Insert state name here” states should have tools like Bitcoin to protect against inflation.
Section 2. Purpose of legislation
The Legislature intended to authorize state coffers and pension funds to:
Allowing the inclusion of Bitcoin and possibly other digital assets as a store of value and providing protection against inflation, thereby protecting the purchasing power of the state fund.
Ensure that the investment strategies of state treasury and pension funds are consistent with the goal of improving the state's economic security and financial resilience.
Maintain investment flexibility: Allowing for flexibility in investment decisions based on changing economic conditions and emerging opportunities that may offer better protection or returns.
Section 3. Definitions
In this chapter, the following terms have the following meanings:
"Exchange Traded Product (ETP)" means any financial instrument that is traded on a regulated exchange in the United States and approved by the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state banking and securities department, and that derives its value from a pool of underlying assets including stocks, bonds, commodities, or indices.
"Bitcoin" means the decentralized digital currency launched in 2009 based on Satoshi Nakamoto's white paper (Bitcoin: A Peer-to-Peer Electronic Cash System). Bitcoin also refers to exchange-traded products based on Bitcoin, which are regulated by the Securities and Exchange Commission.
"Digital Assets" refers to virtual currencies, cryptocurrencies, native electronic assets, including stablecoins and non-fungible tokens (NFTs), etc., assets that grant economic, ownership or access rights or permissions only in digital form.
"Private Key" means a unique cryptographic data element used to sign transactions on a blockchain and known only to the holder of the Private Key.
"Secure Hosting Solution" means a technology product or a combination of products and services that has all of the following characteristics:
The encryption private keys are known and accessible only by government entities.
Encrypted private keys are kept in an encrypted environment and can only be accessed through end-to-end encrypted channels.
Cryptographic private keys are never held, accessed or controlled by the smartphone.
Any hardware storing cryptographic private keys must be located in at least two geographically dispersed, specially designated, secure data centers.
The secure custody solution enforces a multi-party governance structure to authorize transactions, enforces user access controls, and logs all user-initiated actions.
Providers of secure hosting solutions implement disaster recovery protocols to ensure that clients continue to have access to assets in the event that the provider becomes unavailable.
Secure hosting solutions are regularly subject to code audits and penetration testing, and any vulnerabilities found are promptly fixed.
"Qualified Custodian" means any federally or state-chartered bank, trust company, special purpose depository, or state-regulated corporation that custody digital assets for approved exchange-traded products.
Section 4
State treasurers can invest in Bitcoin with the following funds:
State General Fund
Budget Stabilization Reserve Fund
State Investment Fund
Any other state fund determined appropriate by the Legislature
The amount of public funds that the state treasurer can invest in Bitcoin may not exceed 10% of the total public funds in the account.
Digital assets acquired by any fund listed in Section 4.1 shall be held in the following manner:
Held directly by the State Treasurer through a secure custody solution;
Held by a qualified custodian on behalf of the State; or
Held in the form of exchange-traded products issued by registered investment companies.
If lending the digital asset does not increase the financial risk to the State, the Secretary of the Treasury may, in accordance with established rules, lend the digital asset to generate further returns to the State.
Section 5
All taxes and fees paid in Bitcoin shall be transferred to the general fund of the State. The general fund of the State shall reimburse in U.S. dollars any fund designated for eligible digital assets.
Section 6
Any state retirement fund may invest in exchange-traded products that have been duly registered with the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities office.
