Ohio’s move towards embracing crypto investments signals a shift in state-level monetary strategies.
Key Takeaways
- Ohio’s strategic crypto reserve bill allows up to 10% investment of state funds in digital assets.
- Only Bitcoin meets the bill’s market cap threshold, ensuring limited initial investment options.
Former presidential candidate Vivek Ramaswamy praised Ohio’s new strategic crypto reserve bill as powerful and thoughtful.
Introduced by State Representative Steve Demetriou and backed by six co-sponsors, the bill, known as House Bill No. 18, would allow the state treasurer to invest up to 10% of the state’s general fund, budget stabilization fund, and prizes trust fund into a reserve of digital assets, including Bitcoin.
Demetriou said that the move is necessary to protect the state’s funds from the eroding effects of inflation. Investing in digital assets like Bitcoin would enable Ohio to diversify its holdings and hedge against economic uncertainty.
“By allowing an option to invest in a strategic Bitcoin reserve we can hedge against inflation and keep Ohio on the cutting edge of monetary and technological innovation,” Demetriou wrote on X.
Instead of explicitly mentioning “Bitcoin,” Ohio’s new proposed legislation adopts the term “digital asset.” According to Dennis Porter, CEO and co-founder of the Satoshi Action Fund, this approach allows Ohio to maintain technological neutrality and avoid potential political friction.
The legislation sets strict criteria for crypto investments, requiring them to be exchange-traded products with an average market capitalization of at least $750 billion over the preceding 12 months.
With a current market cap of around $2 trillion, only Bitcoin meets this requirement. However, the bill’s language allows for other digital assets to qualify if they reach this market cap threshold in the future.
“The average market capitalization of the digital assets over the preceding twelve months is at least seven hundred fifty billion dollars, as determined by the treasurer of state using a commercially reasonable method,” the bill’s text says.
The bill also sets strict requirements for secure custody solutions if the state chooses to hold digital assets directly. Alternatively, the state can utilize qualified custodians, such as banks or trust companies, or invest through regulated investment companies.
If passed, this bill would represent a major step for Ohio in embracing digital assets as a potential investment vehicle for state funds and retirement systems.
This marks Ohio’s second attempt at a Bitcoin reserve bill, following House Bill 703 introduced last month by House Republican leader Derek Merrin, a bid to establish an “Ohio Bitcoin Reserve.” According to Porter, eleven states have joined the Bitcoin reserve race as of Jan. 23.
The latest state-level initiative came after President Donald Trump signed a crypto-focused executive order, which mandates the creation of a working group tasked with developing a federal regulatory framework for digital assets, including stablecoins, and evaluating the establishment of a national digital asset reserve.
Ramaswamy, who recently stepped down as co-head of the Department of Government Efficiency (D.O.G.E), is expected to announce a bid for Ohio governor next week, a source familiar with the matter told Politico.