States Poised to Adopt Bitcoin Reserves Before the US Federal Government, Says Senator Cynthia Lummis

At the Bitcoin Investor Week conference in New York on February 28, U.S. Senator Cynthia Lummis, a Republican from Wyoming, suggested that individual states in the U.S. are likely to establish Bitcoin reserves ahead of any action from the federal government. According to a report from Bloomberg, Lummis, an outspoken advocate for cryptocurrency, shared her belief that state-level Bitcoin reserves would precede federal involvement in the Bitcoin space.

"My bets are that you’ll see a state have a Bitcoin strategic reserve before the federal government," Lummis said during her remarks.

The BITCOIN Act: A Federal Push for Bitcoin Reserves

Lummis has long been a proponent of Bitcoin adoption at the federal level. In July 2024, she introduced the BITCOIN Act, a piece of legislation calling for the U.S. government to establish a national Bitcoin stockpile. Under this proposal, the U.S. Treasury Department would gradually accumulate 1 million Bitcoin (BTC), ultimately amassing about 5% of the total Bitcoin supply, a scale comparable to the U.S. gold reserves.

Despite her efforts, Lummis conceded that progress on this front might be slow at the federal level. This is due in part to the complexities of government bureaucracy and political divisions surrounding cryptocurrency regulation. However, she remains optimistic that states, with more flexible legislative processes, could be the first to implement Bitcoin reserve strategies.

Federal Efforts to Explore a Bitcoin Reserve

Lummis is not alone in her interest in Bitcoin at the federal level. In January 2024, President Donald Trump signed an executive order to study the feasibility of creating a national Bitcoin stockpile. This executive order marked one of the initial steps in the second term of Trump’s presidency. The president followed up in February with another order, calling for the creation of a sovereign wealth fund, which could serve as a vehicle for acquiring Bitcoin as part of the U.S. government’s reserves.

While these steps show that federal officials are actively exploring Bitcoin’s potential as a reserve asset, Lummis emphasized that countries with more centralized governance structures, such as the United Arab Emirates, have already moved forward with significant Bitcoin purchases. This suggests that countries with fewer political constraints may be able to act faster than democratic republics like the U.S., where such decisions often face more extensive legislative scrutiny.

States Taking the Lead

At the state level, 18 U.S. states currently have crypto reserve bills pending Senate votes, with two—Arizona and Utah—nearing the final stages of approval. These bills aim to explore the possibility of state-level Bitcoin reserves, signaling growing interest in the cryptocurrency as a strategic asset. However, not all states are on board. Legislative efforts to invest in crypto have been rejected in states such as Montana, Wyoming, North Dakota, South Dakota, and Pennsylvania.

Despite political divides, there is significant bipartisan support for cryptocurrency in certain states. According to Ashley Gunn, Coinbase’s senior manager for U.S. policy, many states are embracing crypto regardless of political affiliation. “There are so many states out there that are pro-crypto, and they don’t necessarily follow blue or red policies,” Gunn said during a panel at the ETHDenver conference in late February.

Impact of State Reserves on Bitcoin’s Adoption

The potential for states to adopt Bitcoin reserves ahead of the federal government could play a crucial role in accelerating the adoption of Bitcoin as a mainstream asset. According to CoinShares, a prominent cryptocurrency research firm, the enactment of the BITCOIN Act at the federal level could have a more profound long-term impact on Bitcoin’s integration into the financial system than the launch of Bitcoin Exchange-Traded Funds (ETFs).

Bitcoin ETFs, which debuted in January 2024, currently hold over $100 billion worth of Bitcoin, marking a significant milestone in Bitcoin’s journey toward mainstream financial acceptance. However, experts believe that the establishment of a national Bitcoin stockpile could provide a much more powerful catalyst for Bitcoin adoption, with the potential to shift global perceptions of Bitcoin as a store of value.

Conclusion

As federal efforts to explore Bitcoin reserves continue to evolve, state-level initiatives are positioning themselves as potential frontrunners in the race to embrace the cryptocurrency. While the federal government faces political and legislative hurdles, individual states are seizing the opportunity to implement forward-thinking policies that could solidify Bitcoin’s place in the U.S. financial landscape. With numerous states already taking steps to adopt Bitcoin reserves, the stage is set for a more decentralized approach to Bitcoin’s integration into the financial system, with the potential to shape the future of both the cryptocurrency market and the broader economy.