Montana Bitcoin reserve fund voted down, making it the 5th state to consider, reject it

A proposal in the Montana House of Representatives to introduce a state Bitcoin reserve fund has failed. The Inflation Protection Act, as it was called, was passed by the House Business and Labor Committee, but voted down by the full House on its second reading on Feb. 22. 

The bill would have established a special revenue account for the state’s Board of Investments to invest in precious metals and digital assets. It was introduced by Republican representative Curtis Schomer on Feb. 7 without Democratic support.

The fund received a nonpartisan rejection

The final vote was not along party lines, however, with 16 Republicans opposing it and one Democrat voting yea. The final vote was 41 for and 59 against.

The bill was two pages long. It would have allowed transfers from the state’s general fund into the state’s Inflation Protection Act special fund by the legislature with a maximum of $50 million. The bill would have left revenue from the account in the account and given the state legislature control over the money in the account.

Digital assets would have to have a market cap of $750 billion to be eligible for investment under the bill. In other words, the bill would authorize investment in Bitcoin, as it is the only qualifying digital asset. 

The debate over the bill focused on whether or not the fund was a worthy use of taxpayers’ money, with proponents saying it was a way to optimize state funds. Opponents called the bill speculative and risky.

“I am not signing on to that stuff [cryptocurrency] and I can’t imagine a majority of your constituents want you to,” Republican Bill Mercer told the assembly.

There is another law affecting cryptocurrency currently before the Montana legislature. An Act Revising Cryptocurrency Laws would prohibit the state from participating in testing a central bank digital currency and legalize the payment of taxes in cryptocurrency. It also protects mining and staking and exempts certain tokens from state security laws.

Montana passed a law in 2023 to protect crypto mining in the state. The law prohibits discriminatory utility rates for crypto miners and prevents local governments from “exercising powers related to digital asset mining.” It also defines digital assets as personal property and prohibits taxation of cryptocurrency used as a method of payment.

Federal digital asset fund may be created

The so-called White House crypto czar, David Sacks, has confirmed in a press conference that a national Bitcoin reserve would be considered. Many states have pulled far ahead of the federal government. According to Bitcoinlaws.com, 18 states currently have cryptocurrency reserve fund proposals.

Utah is the furthest ahead. Its Blockchain and Digital Innovation Amendments bill has made it through the House and is up for its second reading in the Senate.

Montana joins North Dakota, Pennsylvania, South Dakota and Wyoming as states that have voted down cryptocurrency reserves. Montana’s four federal legislators are all strong supporters of crypto.

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