Minnesota is in the news with a new proposal that could bring bitcoin into state investments, tax payments, and even retirement plans.
State Senator Jeremy Miller introduced the “Minnesota Bitcoin Act,” a bill that would allow the state to invest in bitcoin just like traditional assets.
Senator Miller’s journey with Bitcoin has been a wild one. He was skeptical at first but after research and constituent engagement, he changed his mind. He stated:
“As I do more research on cryptocurrency and hear from more and more constituents, I’ve gone from being highly skeptical to learning more about it, to believing in Bitcoin and other cryptocurrencies.”
Although Senator Millers’ mention of “other cryptocurrencies” in his statement has Bitcoiners worried to some extent. Bitcoin advocates believe Bitcoin possesses features that no other “cryptocurrency” has, and they should not be viewed as the same.
He wants to “promote prosperity” for Minnesota by not being left behind in the digital finance space. The Minnesota Bitcoin Act (SF2661) aims to modernize finance and expand investment opportunities. If passed, the bill would:
- Allow the Minnesota State Board of Investment to invest in bitcoin and other digital assets along with traditional assets like stocks and bonds.
- Give Minnesota state employees the option to include bitcoin in their retirement plans.
- Allow residents to pay state taxes and fees in bitcoin.
- Exempt tax on bitcoin investment gains reducing the burden on bitcoin investors.
This bill puts Minnesota in the company of a growing number of states looking to integrate bitcoin into their economies.
Minnesota is not the only state looking at Bitcoin-friendly policies. Several states including Texas, New Hampshire, Colorado, and Utah have taken steps to integrate bitcoin into their economies.
Colorado and Utah already accept bitcoin for tax payments, Louisiana allows bitcoin transactions for state services, and Texas is considering creating a bitcoin reserve while New Hampshire lawmakers are debating a similar measure.
On the federal level, Senator Cynthia Lummis has been pushing for a national bitcoin reserve. Her Strategic Bitcoin Reserve Act proposes the U.S. government buy 200,000 bitcoin a year for 5 years, totaling 1 million bitcoin.
She recently re-introduced the BITCOIN Act which would allow the government to hold even more bitcoin.
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Bitcoin has been one of the best-performing assets of the last decade. According to financial data, bitcoin has had a compound annual growth rate of 102.36% since 2011 compared to the S&P 500’s 14.83%.
Backers of the Minnesota Bitcoin Act say investing in bitcoin will diversify the state’s portfolio and create an inflation hedge.
“I believe global digital currencies are here to stay and it’s inevitable that they become more and more mainstream,” Miller said.
But opponents warn of bitcoin’s volatility and regulatory risks. The bitcoin market is known for wild price swings and government policies on digital assets are still evolving. Some lawmakers are concerned it will be a financial risk.
The Minnesota Bitcoin Act Bill has been introduced in the state Senate and will go to the State and Local Government Committee. If it passes, it will go into effect in late 2025 or early 2026.
