- Utah proposes a bill to allow state treasurers to invest up to 10 percent of funds in digital assets.
- The bill includes strict rules for digital asset security with advanced encryption and secure storage systems.
- Self-custody rights for digital assets are protected under the proposed Utah legislation.
The state of Utah has introduced a bill that would authorize state treasurers to invest public funds in digital assets. The legislation was introduced by Representative Jordan Teuscher and is known as the “Blockchain and Digital Innovation Amendments” (H.B. 230). The bill outlines provisions for staking, lending, and protecting self-custody rights for digital asset holders.
If passed, the bill would permit up to 10% investment from various state accounts. These include the State Disaster Recovery Restricted Account, General Fund Budget Reserve Account, Income Tax Fund Budget Reserve Account, and Medicaid Growth Reduction and Budget Stabilization Account. The legislation aims to balance innovation with fiscal responsibility.
Investment Criteria for Digital Assets
To qualify for investment, digital assets must meet specific conditions. They must either maintain a 12 month moving average market capitalization above $500 billion or stringent stablecoin requirements. Stablecoins must be backed by U.S. dollars or high quality liquid assets and must be regulated. Such strict criteria are intended to guarantee the stability and the security of investments.
Advanced Security Measures
The proposed bill emphasizes strong encryption standards to protect digital asset investments. It mandates that cryptographic private keys must remain in an encrypted environment.
Access to these keys would be limited to end-to-end encrypted channels. Furthermore, hardware storing private keys must be distributed across at least two secure and geographically diverse data centers.
Protection of Self-Custody Rights
The legislation includes protections for individual rights to self-custody digital assets. It prohibits any state or local government entity from restricting or impairing a person’s ability to use self-hosted or hardware wallets. These measures support individual control over digital assets.
A Broader National Trend
Utah’s bill aligns with similar initiatives in other states. States like Texas and New Hampshire have proposed similar investment frameworks, focusing primarily on Bitcoin. However, differences exist in approach and scope. For example, Texas has proposed limited investments tied to budget surpluses and donations.
While some states have faced setbacks due to political changes, Utah’s proposed framework could set a precedent. If enacted, the legislation would take effect on May 7, 2025, making Utah the eleventh U.S. state to adopt measures for public investment in digital assets.
