Simply put
- Connecticut has enacted the strictest cryptocurrency law in the U.S., which forbids all state and local governments from buying, holding, or investing in any cryptocurrency.
- This law requires crypto companies to disclose “all material risks,” while also reforming the state’s existing gold transmission laws.
- The ban in Connecticut stands in sharp contrast to the national trend, with 31 Bitcoin-related bills currently active across 16 states.
Connecticut has essentially closed its doors to cryptocurrency, even as numerous states strive to establish Bitcoin reserves.
The state legislature passed House Bill 7082 unanimously on Tuesday, now referred to as Official Law No. 25-66. This legislation represents the nation’s most significant embargo on government engagement with cryptocurrencies.
The law explicitly states that government agencies cannot “establish a reserve for cryptocurrency” or accept crypto as payment, effectively blocking any future state-sponsored initiatives in this arena.
In addition to the investment ban, the law introduces strong consumer protection measures, obliging crypto companies to disclose “all significant risks associated with cryptocurrencies.”
The legislation mandates that crypto service providers present a prominent warning that losses from fraud or mistakes in transactions may be unrecoverable, emphasizing that cryptocurrency transactions are irreversible.
Additional safeguards include verification processes for users under 18 and comprehensive disclosure for all cryptocurrency transactions.
The law not only restricts public cryptocurrency accounts but also updates definitions related to money transmission, digital wallets, and kiosks, requiring state-licensed firms to adopt rigorous compliance protocols.
Bitcoin reserves in the US
Connecticut’s tough position is increasingly out of sync with states that are embracing crypto as a potential strategic asset.
Different legislation indicates a growing divide regarding the role of cryptocurrency in state finances; supporters highlight portfolio diversification, while opponents worry about volatility and fiduciary risks.
There are currently 31 bills concerning state Bitcoin reserves still pending, with 16 states pushing forward, though eight others have rejected similar proposals in line with the Tracker Bitcoin Act.
Despite the firm stance, some lawmakers expressed intentions to revisit the issue in the future.
New Hampshire recently became the first state to successfully create a strategic Bitcoin Reserve, while Arizona has opted for a more cautious approach, focusing on non-tax revenues.
