Fiscal Note - 25LSO-0488

State funds-investment in Bitcoin.

25LSO-0488, 1.2

FISCAL NOTE

The fiscal impact, in the form of changes in investment revenues, is indeterminable.

This bill would permit the State Treasurer’s Office (STO) to invest funds from the General Fund, the Permanent Wyoming Mineral Trust Fund (PWMTF) and the Permanent Land Fund in Bitcoin. The investments in Bitcoin would not be permitted to exceed 3 percent of the respective fund.

Based on the market values reported as of November 30, 2024, 3 percent of the PWMTF would be approximately $353.5 million, and 3 percent of the Permanent Land Fund would be approximately $182.0 million.

Assuming these maximum amounts were invested in Bitcoin, the State could see a significant impact on returns, but the precise impact is not known. Bitcoin has historically seen relatively high volatility. The STO currently looks to balance the functions of each fund with the overarching goal of achieving the highest risk-adjusted rate of return.

The STO projects yields in FY26 through FY28 to be 2.98%, 3.07%, and 3.02% respectively for permanent funds and 4.28%, 4.12%, and 4.02% respectively for State Agency Pool funds. Yield is defined as the interest and dividend income from the investment.

Over the long term, total returns for permanent funds are expected to be 6.75%, while total returns for State Agency Pool funds are expected to be 4.05%. Total return is defined as growth in the value of the investment, including both yield and realized & unrealized gains.

The STO would acquire and hold Bitcoin in one or more of the following methods:

directly through the use of a secure custody solution;
through a qualified custodian; or
through ownership or holding of an exchange-traded product issued by a registered investment company or manager.

According to the STO, acquiring and holding Bitcoin would generate additional expense including the costs of finding and retaining the appropriate custodial safeguards required in the bill.

Prepared by: Dean Temte, LSO Phone: 777-7881

(Information provided by Samantha Dailey, State Treasurer's Office, 307-777-7408)

HB0201

2025

STATE OF WYOMING

25LSO-0488

Introduced

2.0

HOUSE BILL NO. HB0201

State funds-investment in Bitcoin.

Sponsored by: Representative(s) Wasserburger, Brown, G, Filer, Lucas and Singh and Senator(s) Smith, D

A BILL

for

AN ACT relating to public funds; authorizing the investment of state funds and permanent funds in Bitcoin; specifying requirements for the investment in Bitcoin; requiring rulemaking; requiring reports; providing definitions; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1. W.S. 9‑4‑722 is created to read:

9‑4‑722. Investment of state funds in Bitcoin.

(a) As used in this section:

(i) \"Bitcoin\" means the decentralized digital currency launched in 2009, based on Satoshi Nakamoto's paper titled Bitcoin: A Peer‑to‑Peer Electronic Cash System. \"Bitcoin\" also includes the digital asset that is the basis of the Bitcoin exchange‑traded product that is regulated by the United States securities and exchange commission;

(ii) \"Exchange‑traded product\" means any financial instrument that:

(A) Is approved by the United States securities and exchange commission, the federal commodity futures trading commission or the division of banking;

(B) Is traded on an exchange regulated under state or federal law; and

(iii) \"Private key\" means as defined by W.S. 34‑29‑101(a)(v);

(iv) \"Qualified custodian\" means any special purpose depository institution, a state chartered trust company or a company regulated under state or federal law that custodies digital assets for an approved exchange‑traded product;

(v) \"Secure custody solution\" means a technological product or blended product or service that has all of the following:

(A) The cryptographic private keys that secure digital assets are:

(I) Exclusively known and accessible by the state treasurer;

(II) Exclusively contained within an encrypted environment and accessible only through end‑to‑end encrypted channels;

(III) Never contained by, accessible by or controllable with a mobile or cellular phone.

(B) Any hardware that contains the cryptographic private keys that secure digital assets is maintained in at least two (2) geographically diversified and specially designated secure data centers;

(C) A multi‑party governance structure is enforced for authorizing transactions and for user access and all user‑initiated actions are logged;

(D) The implementation of a disaster recovery protocol that ensures customer access to assets if the provider becomes unavailable;

(E) The completion of regular code audits and penetration testing from audit firms and the remediation of any identified vulnerabilities.

(b) The state treasurer may invest the following funds in Bitcoin:

(i) The general fund, provided that no more than three percent (3%) of the general fund shall be invested in Bitcoin at any one (1) time;

(ii) The permanent Wyoming mineral trust fund, subject to subsection (c) of this section;

(iii) The permanent land fund, subject to subsection (c) of this section.

(c) The state treasurer may invest the permanent Wyoming mineral trust fund and the permanent land fund in Bitcoin, provided that investments under this subsection shall not exceed three percent (3%) of each fund.

(d) The state treasurer shall acquire and hold Bitcoin invested under this section using one (1) or more of the following methods:

(i) Directly by the state treasurer through the use of a secure custody solution;

(ii) Through a qualified custodian;

(iii) Through ownership or holding of an exchange‑traded product issued by an investment company or manager registered under the federal Investment Advisor's Act of 1940, as amended.

(e) If at any time the total market value of investments in Bitcoin under this section exceeds the percentage limits established in subsections (b) and (c) of this section due to market appreciation, the state treasurer shall not be required to sell or otherwise reduce the investments to comply with the limits of this section. The state treasurer shall not make any additional deposits or investments in Bitcoin until the percentage of Bitcoin holdings is within the limits specified in this section. If the value of investments under this section are at or fall below the limits specified in this section, the state treasurer may resume the investment of funds in Bitcoin in accordance with this section.

(f) The state treasurer shall promulgate all rules necessary to implement this act.

(g) Not later than October 1 of each year, the state treasurer shall report to the joint appropriations committee and the select committee on capital financing and investments on:

(i) The amount and performance of investments in Bitcoin under this section;

(ii) The custody and security arrangements taken for investments made under this section, including actions taken to comply with secure custody requirements;

(iii) The cost basis and current market value of the Bitcoin held under this section;

(iv) The amount of payments received by the state in Bitcoin and the amounts of Bitcoin converted and reimbursed under this section.

Section 2. W.S. 9‑4‑714(a)(viii) is amended to read:

9‑4‑714. Definitions.

(a) As used in this act:

(viii) \"This act\" means W.S. 9‑4‑714 through 9‑4‑721 9‑4‑722.

Section 3. The state treasurer shall promulgate all rules necessary to implement this act.

Section 4. This act is effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(END)

HB0201