New Hampshire legislators passed the first state crypto reserve, winning the crypto race to pass the first reserve law amongst US states, beating Arizona, North Carolina, and Texas. Kelly Ayotte, the state governor, celebrated the win, saying New Hampshire was in first place again. The new law was derived from the bill HB 302, which allows the state to invest up to 5% of public funds into precious metals and crypto, which has a market cap of over $500 billion. This would effectively only allow Bitcoin among crypto investments. The crypto can be held with either a secure custody option or as an exchange-traded product. The new crypto bill will become law in 60 days.
“New Hampshire”, wrote Kelly Ayotte on X, “is once again First in the Nation! 🎉 Just signed a new law allowing our state to invest in cryptocurrency and precious metals”.
HB 302 only allows crypto investments that have a market cap of $500 billion, which only includes Bitcoin at this stage, with a market cap of $1.9 trillion. The law also allows for the investment of precious metals like gold. The state could effectively derisk a crypto portfolio by allowing a larger percentage of precious metals, hedging against a possible financial crisis. If the state holds its crypto, it will need a multi-signature lock or a professional third party to hold the tokens. Satoshi Action, a Bitcoin advocacy group, wrote the draft of the bill, and believes that this result will make the process much easier for other states to adopt crypto reserves. Satoshi Action believes that New Hampshire has sparked a new movement, commenting that the state has future-proofed its treasury by investing in the most secure currency in the world.
The bill will become law in 60 days, giving the state enough time to decide how much Bitcoin and Gold they wish to accumulate. The treasurer of New Hampshire will be responsible for purchasing the new assets as long as they conform to the new requirements in the bill. The treasurer can only allocate up to 5% of the public treasury on previous metals and crypto. This represents a quite conservative amount relative to the larger percentages proposed by other states. It is also worth noting that the state has lumped precious metals like gold under the same category as Bitcoin, which further validates the digital asset as a digital form of gold.
Other states, including Texas and North Carolina, have also made progress in the race to pass crypto reserve laws. New Hampshire, however, is the clear winner, having reached a definitive judgment before anyone else. Arizona had two bills passed, but the governor vetoed one of them, and most likely will veto the remaining bill. The two bills included SB 1025 and SB 1373. The first bill, SB 1025, was vetoed by the governor of Arizona. However, there is a chance that the second bill, SB 1373, could pass due to it does not include the state’s retirement funds. Opposition to the crypto reserve bill in Arizona is largely based on groups opposing the idea of investing retirement funds in crypto. Some advocates have even likened the action to gambling pension funds at the casino.
Congress, meanwhile, on the federal stage, is struggling to pass regulations on stablecoins, which could stifle momentum with the growing interest in stablecoin transactions. Senator Cynthia Lummis has further co-sponsored a bill to increase the US Bitcoin treasury by 1 million BTC, which would further promote cryptocurrency in America. A US stablecoin has been suggested as a way to spread US dollar dominance across the globe. A Bitcoin treasury has further been suggested as a way to withstand any financial crises and to deal with a growing debt problem in America. On the state level, moreover, New Hampshire has combined both precious metals like gold and Bitcoin under the same bill, suggesting that public officials are starting to see crypto as having hedging potential like gold.
