- Florida’s SB 550 bill aims to invest in Bitcoin to combat inflation and strengthen state finances.
- The bill limits Bitcoin investments to 10% of state funds and focuses on security measures like multi-party transaction approval.
- Bitcoin adoption rises globally, with states exploring crypto reserves, though volatility remains a concern.
Florida’s bill to include Bitcoin as part of its financial strategy is set for legislative deliberation on April 10. If the pitch passes a successful hearing, the state will officially adopt BTC as a financial hedge in a bid to strengthen its financial coffers and guard against inflation.
SB 550 Bill Proposes Bitcoin Investment to Combat Inflation
On February 10, Florida Senator Joe Gruters proposed a new bill granting the state the right to invest in Bitcoin. The measure, named SB 550, argues that inflation has weakened the purchasing power of the state’s assets, which are held and managed by Florida’s Chief Financial Officer (CFO).
Gruters’ bill urges the CFO to invest the state’s Funds into Bitcoin and other unspecified options as a hedge against inflation. The pitch also proposes funding the investment with money from the General Revenue Fund, Budget Stabilization Fund, and many others. However, it stresses that the maximum amount of public funds invested in BTC should not exceed 10%.
SB 550 highlighted that several nations now boast of Bitcoin holdings. It also contends that Bitcoin’s value and widespread adoption make it an ideal investment choice. As a security measure, Gruters’ pitch outlined the necessary criteria for choosing a custody solution. First, a government agency will oversee the wallet’s cryptographic private keys. In addition, the key must be encrypted, inaccessible on a smartphone, and stored in “at least two geographically diverse” safe data locations.
Per SB 550, the custody service provider must ensure a multi-party mode for authorizing transactions and provide a protocol that will grant uninterrupted access in case of a disaster. Likewise, the custody solution must undergo routine pen testing and code audits to guard against potential cyber attacks.
Bitcoin Sees Rising Adoption as States and Nations Eye Crypto Reserves
Bitcoin is witnessing increased adoption among top industry players and even countries. Several countries have shored up their financial holdings with BTC in the past few years. In light of this growing visibility, legislators across several US states are proposing crypto-focused bills, particularly that of a reserve.
Over the last two months, nine US states have passed some crypto-related rulings to improve digital asset oversight. Experts suggest the Bitcoin reserve trend could continue, given its government neutrality and lack of centralized control. However, some market commentators have cited Bitcoin’s fiscal policies and volatility as a possible cautionary tale.
Bitwise CEO Hunter Horsley contended that countries may soon move away from US assets in favor of Bitcoin. He added that BTC’s preference is fueled by its decentralization and ease of access. However, Block CEO Jack Dorsey warned that Bitcoin could lose its value if restricted to a digital store of value. He maintained that BTC’s original goal is to serve as a medium of transaction, as outlined in its whitepaper. At the time of writing, Bitcoin trades at $76,968 following a modest intraday slip, per CoinMarketCap data.
