Key Takeaways
- Florida's SB 550 bill would allow up to 10% of public funds to be invested in Bitcoin.
- The state's CFO would oversee secure custody and potential Bitcoin loans to generate returns.
- If passed, the bill would take effect on July 1, 2025.
Senate Bill 550, filed by Sarasota Republican Sen. Joe Gruters, aims to provide Florida’s Chief Financial Officer (CFO) with the authority to invest public funds in Bitcoin.
The bill cites Bitcoin’s historical value growth and its acceptance as an international medium of exchange.
Inflation protection
The bill states:
Inflation has eroded the purchasing power of assets held in state funds.
It adds:
Although the state does not have direct control over the national money supply or the policies that influence inflation, it has a responsibility to safeguard Florida’s financial resources against the impacts of inflation and other economic uncertainties.
Investment allocation
The legislation proposes that up to 10% of total public funds, including those in the General Revenue Fund, the Budget Stabilization Fund, and various trust funds, could be allocated to Bitcoin investments.
Secure custody requirements
The bill outlines strict security measures for storing Bitcoin, requiring holdings to be kept either directly by the CFO using a “secure custody solution,” through a “qualified custodian,” or within an exchange-traded product regulated by the SEC.
Bitcoin lending provisions
Additionally, the CFO would have the ability to loan Bitcoin held in state funds, as long as it…
… does not increase financial risk.
Rules will be established for such transactions.
Implementation timeline
If approved, the bill would take effect on July 1, 2025.
Taxes or fees paid in Bitcoin would be transferred to the General Revenue Fund and then converted to U.S. dollars.
