Why Did Utah Remove Its Bitcoin Reserve Plan?

Utah state Senate passed HB230, the Blockchain and Digital Innovation Amendments, on March 7, paving the way for greater blockchain adoption. However, the bill’s most groundbreaking provision—a state-run Bitcoin reserve—was removed before final approval

HB230 was designed to set regulatory frameworks for digital asset custody, management, and compliance in Utah. One of its most ambitious proposals was to allow the state treasurer to invest up to 5% of public funds in eligible digital assets, provided they had a market cap above $500 billion.

However, the removal of the Bitcoin reserve clause marks a missed opportunity for Utah to become the first U.S. state to officially hold Bitcoin on its balance sheet.

Why Was the Bitcoin Reserve Removed?

The proposal initially gained momentum, passing Utah’s House Committee on Economic Development and clearing the Senate’s second reading. However, resistance grew as the bill moved closer to law.

According to Senator Kirk A. Cullimore, there was hesitation regarding state-level crypto investments, with some lawmakers preferring a more cautious approach. While Utah has embraced blockchain innovation, the idea of allocating state funds to Bitcoin remains controversial.

Despite the setback, the bill’s sponsor, Representative Jordan Teuscher, remained optimistic. He stated on Twitter:

"Thrilled to announce HB230, which will allow the state to invest in digital assets. While Utah is the 11th state to introduce similar legislation, we will be the first to pass it. Utah continues to lead the nation in blockchain and digital innovation!"

What Does HB230 Mean for Utah’s Crypto Future?

Even without the Bitcoin reserve, HB230 introduces several key provisions that push Utah toward becoming a crypto-friendly state.

The bill grants:

• Custody protections for digital asset holders.
• The right to mine Bitcoin, operate nodes, and participate in staking.
• A framework for state treasurers to allocate public funds into eligible digital assets (excluding Bitcoin for now).
• With Governor Spencer Cox expected to sign the bill, Utah aims to establish itself as a leader in blockchain policy. This follows
• Cox’s earlier support for blockchain innovation, including signing a bill to create a statewide blockchain task force.

Other U.S. States Are Moving Toward Bitcoin Reserves

Utah’s decision to drop the Bitcoin reserve from its bill doesn’t mean the idea is dead. Several other states, including Texas, Arizona, and New Hampshire, are advancing similar legislation.

Texas Takes the Lead

Texas recently passed SB 21, a bill allowing the state to invest public money in Bitcoin and other digital assets. Senator Charles Schwertner, a key proponent, argued that Bitcoin is a strong reserve asset in times of economic uncertainty.

Arizona and New Hampshire’s Bitcoin Push

Arizona has introduced two Bitcoin reserve bills that have cleared Senate committees and await final approval.
New Hampshire passed House Bill 302 through committee with a 16-1 vote, moving it closer to law. The bill would allow the state to allocate 5% of public funds into Bitcoin and precious metals.

Federal-Level Bitcoin Adoption Gains Momentum

While states debate their approach to Bitcoin, the federal government has moved forward. On March 7, U.S. President Donald Trump signed an executive order establishing a Strategic Bitcoin Reserve.

The initiative will be funded with Bitcoin seized from criminal forfeitures, with federal agencies tasked with developing budget-neutral strategies to increase holdings. This move is expected to drive further institutional and governmental Bitcoin adoption, setting a precedent for state-level Bitcoin reserves in the future.