New Hampshire State Representative Keith Ammon introduced legislation to create a strategic reserve of digital assets with an average yearly market cap of over $500 billion and US-pegged stablecoins to the state treasury, according to a bill introduced on Jan. 9. 

The bill caps investments in these alternative assets at 10% of the total public funds, roughly $360 million, according to the treasury ending balance as of June 30.

Additionally, the bill highlights that these assets must be held through “secure custody solutions,” which ensure exclusive access to cryptographic private keys, qualified custodians, and registered exchange-traded products (ETP).

ETPs must be approved by regulatory bodies such as the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC).

Only Bitcoin meets the requirements

According to CryptoSlate data, only Bitcoin (BTC) meets the market cap requirement in the proposed legislation for cryptocurrencies. The state treasury can also add stablecoins like Tether USD (USDT) and USD Coin (USDC).

The bill also allows the state to invest in traditional precious metals like gold, silver, and platinum in addition to crypto.

The proposal also opens the door for New Hampshire to engage in staking, even though Bitcoin is the only crypto making the cut and is not based on a proof of stake consensus mechanism.

By integrating staking, New Hampshire would be ready to add crypto such as Ethereum (ETH) and Solana (SOL) in a scenario where their market caps meet the criteria, and earn passive revenue based on their holdings.

Additionally, the bill proposes lending digital assets as another option, provided the state retains legal ownership and works with third-party providers in both cases.

Not sneaky

Satoshi Action Fund CEO and co-founder Dennis Porter welcomed the bill and stated that it added the high market cap requirement to limit state investment in Bitcoin. He explained that calling the asset by name in the bill is impossible in some US states. 

In response to comments that this was a “sneaky way” to add Bitcoin to state treasuries, Porter explained:

“It’s not a ‘sneaky’ way. Some states will require us to develop tech neutral bills which is very common in policy. It’s a way to reduce political friction. Some bills will be Bitcoin exclusive, some will be based on market cap. We work with lawmakers to ensure they have confidence in the bill passing.”

New Hampshire is the latest state to initiate legislation to establish a Bitcoin strategic reserve. Porter said that 10 more US states are ready to introduce similar bills focused on a Bitcoin strategic reserve in the coming weeks and months.

Representative Mike Cabell introduced similar legislation in Pennsylvania on Nov. 14, 2024, and Representative Giovanni Capriglione followed with similar legislation in Texas less than one month later.

Meanwhile, Alabama’s State Auditor Andrew Sorrell recently proposed creating a BTC strategic reserve, and Florida Chief Financial Officer Jimmy Patronis advocated for the same decision.

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