Quick Takes
- Florida Senator Joe Gruters has introduced a bill permitting the state’s chief financial officer to use public trust funds to invest in Bitcoin. He argued that holding BTC is important for the state to counter rising inflation, which has eroded its purchasing power.
- As per the proposal, Florida’s CFO will invest 10% of the state’s general reserve fund, the budget stabilization fund, and other trust funds into BTC and other crypto-related investment products.
- Late last year, Florida CFO Jimmy Patronis urged the Florida State Board of Administration (SBA) to add Bitcoin to its retirement fund investments. Wisconsin and Michigan are the only two states that have allocated a portion of their pension funds into crypto investment products – namely the GBTC, IBIT, and ARKB Bitcoin ETFs.
- Florida’s Bitcoin bill comes only a day after Rep. Theodore Joseph Roberts introduced a bill in the Kentucky House to establish a strategic Bitcoin reserve, becoming the 16th US state to propose similar legislation.
Republican Senator Joe Gruters has introduced a bill in the Florida Senate proposing that part of the state’s funds be invested in Bitcoin (BTC) and other crypto assets. The legislation follows a string of similar filings made by other US states to counter rising inflation.
In the bill submitted on February 7, Gruters states that inflation has eroded the purchasing power of assets held in state funds, and the state should have access to tools such as Bitcoin to protect against inflation.
Senator Joe Gruters Urges Florida To Invest 10% of State Funds In Bitcoin To Counter Inflation
The senator highlighted that major asset management firms such as BlackRock, Fidelity, and Franklin Templeton have already adopted Bitcoin and view it as a “hedge against inflation”. He argued that Florida should consider investing state funds in the asset class because its value has risen greatly and is becoming more widely accepted as an international medium of exchange.
Gruters proposed that Florida’s chief financial officer Jimmy Patronis be allowed to purchase Bitcoin using public funds and invest it in the state’s general reserve fund, the budget stabilization fund, trust funds, and all state agency and judicial branch funds. He noted that the CFO’s Bitcoin investments may not exceed 10% of the total funds in any state government accounts.
The bill also proposes authorizing the Trustees of the State Board of Administration to invest and reinvest available funds of the System Trust Fund in BTC, providing that these investments of public funds “are exempt from certain security requirements”.
Florida CFO Recommends Adding Bitcoin To State Retirement Funds
Sen. Gruters’ Bitcoin policy recommendation comes just months after Patronis wrote a letter urging the Florida State Board of Administration’s (SBA) executive director to consider adding Bitcoin to the state’s retirement funds investments. He said the flagship crypto asset could help diversify the state’s portfolio and provide a “secure” hedge against the volatility of other major asset classes.
In the letter, the Florida CFO asked the SBA to provide a report on the feasibility, risk, and potential benefits of allocating a portion of state retirement system monies into crypto assets, urging them to do so before the next legislation session, scheduled for March 4, 2025.
The Florida SBA manages over 30 state funds, including the Florida Retirement System Trust Fund, and reportedly has about $205 billion in assets under management (AUM).
Patronis proposed that the SBA establish a “Digital Currency Investment Pilot Program” as part of the Florida Growth Fund, and it will be allowed to utilize up to 1.5% of the Florida Retirement System Trust Fund to invest in digital assets. According to a recent report, the fund has invested $998 million into high-growth investments between 2022 and 2023.
He emphasized the need to prioritize the best return on investments for Floridians while managing state pensions for firefighters, teachers, and police officers, which is where the potential of investing in crypto assets like Bitcoin becomes a “compelling” prospect.
Late last year, the CFO revealed that Florida holds about $800 million worth of crypto-related investments. He also stated that the amount of state funds invested in crypto assets could grow as the Trump administration implements pro-crypto policies.
If Florida decides to use its pension funds to purchase Bitcoin, it would join other states like Wisconsin and Michigan, which have added crypto assets to their respective state retirement funds.
Last May, The State of Wisconsin Investment Board (SWIB) reported that it had invested $164 million in Grayscale’s GBTC and BlackRock’s IBIT spot Bitcoin exchange-traded funds (ETFs), which amounted to about 0.1% of its total AUM. A few months later, the State of Michigan Retirement System disclosed Bitcoin investments through ARK 21Shares’ Bitcoin ETF, allocating 0.003% of its total AUM.
Kentucky Becomes 16th US State To Propose Establishing Strategic Bitcoin Reserve
Senator Gruters’ recommendation comes just a day after Kentucky became the 16th US state to introduce legislation to establish a strategic Bitcoin reserve.
The House Bill (HB) 376, proposed by Representative Theodore Joseph Roberts on February 6, would authorize the State Investment Commission to allocate 10% of excess state reserves into crypto assets with a market capitalization of more than $750 billion, averaged over the previous calendar year. Presently, Bitcoin, with its $1.9 trillion market cap, is the only cryptocurrency that qualifies under the criteria.
Kentucky now joins Arizona, Alabama, Florida, Massachusetts, Missouri, New Hampshire, North Dakota, South Dakota, Ohio, Oklahoma, Pennsylvania, Texas, Utah, Kansas, and Wyoming to introduce legislation aiming to establish a Bitcoin stockpile.
Blockchain expert Anndy Lian stated that despite its recent volatility the Kentucky bill is a “massive vote of confidence” in Bitcoin that could drive institutional interest “through the roof”, and set the precedent for the federal government and even other countries to follow suit.
At the time of writing, Bitcoin (BTC) is trading at $96,335 – down 1.04% in the last 24 hours.
