Kansas Joins State-Level Push for Bitcoin Reserves with Senate Bill 352

TLDR

• Kansas Senate Bill 352 proposes creating a Bitcoin reserve funded by unclaimed digital assets like staking rewards and airdrops.
• The bill mandates that digital assets are deemed abandoned after three years if the owner doesn’t engage with them.
• 10% of digital assets’ deposits will go to the general fund, but bitcoin will not be deposited there.
• Kansas joins New Hampshire, Texas, and Arizona in creating state-level bitcoin reserves as part of public finance strategies.
• Senator Bowser also introduced Senate Bill 310 to regulate cryptocurrency donations for political campaigns, requiring KYC compliance.

Kansas Senate Bill 352, which seeks to create a state-level Bitcoin reserve, has advanced to the Senate Financial Institutions and Insurance Committee. The bill proposes that proceeds from unclaimed digital assets be used to fund the reserve. The legislation was referred to the committee on Thursday, one day after its introduction by Republican Senator Craig Bowser.

Details of Senate Bill 352

Senate Bill 352 aims to create a “Bitcoin and digital assets reserve fund” within the state treasury. Unlike other state proposals, this fund would not involve purchasing Bitcoin directly but would be funded by staking rewards and airdrops from unclaimed digital assets.

According to the bill, digital assets are deemed abandoned after three years if the owner fails to respond to written communications or engage with the asset. Once digital assets are reported as unclaimed, a designated custodian will hold them and may stake the assets to earn rewards.

These rewards, along with any airdrops generated from the assets, will be transferred to the Bitcoin reserve fund. The legislation explicitly prohibits the state treasurer from depositing Bitcoin into the state general fund, directing only 10% of other digital assets to the general fund.

Kansas Joins State-Level Bitcoin Reserve Movement

Kansas’s move to create a Bitcoin reserve fund aligns with broader state-level efforts to incorporate Bitcoin into public finance. Other states like New Hampshire, Texas, and Arizona have already passed similar laws. New Hampshire’s Strategic Bitcoin Reserve law, for example, authorizes the state to hold Bitcoin in its reserve, subject to a market cap limit.

Texas and Arizona have also introduced bills allowing the retention of unclaimed cryptocurrency as part of their state reserves. As states like Florida and West Virginia propose similar legislation, the trend of incorporating bitcoin into state-level financial strategies is gaining traction. In addition to Senate Bill 352, Senator Bowser introduced Senate Bill 310, which regulates cryptocurrency contributions for political campaigns.

This bill requires that all crypto donations be processed through a U.S.-based registered payment processor. The funds must be converted to U.S. dollars within 3 business days and deposited into a campaign account. This bill aims to ensure that political campaigns comply with know-your-customer (KYC) protocols when accepting cryptocurrency.

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