TLDR
- Kansas lawmakers have introduced a bill to establish a state-managed Bitcoin and Digital Assets Reserve Fund.
- The bill aims to recognize digital assets, including Bitcoin, as unclaimed property under state laws.
- If passed, the legislation would place oversight of the reserve under the Kansas State Treasurer’s office.
- Unclaimed digital assets would be transferred to the state after three years of inactivity.
- The bill specifies that only custodial digital assets held by licensed entities would be affected, not self-custodied wallets.
Kansas lawmakers have introduced a bill that aims to create a state-managed Bitcoin and Digital Assets Reserve Fund. This legislation, led by State Senator Craig Bowser, seeks to amend the state’s unclaimed property laws to explicitly include digital assets like Bitcoin and other cryptocurrencies. If passed, the bill would place oversight of the reserve under the Kansas State Treasurer’s office, potentially marking a shift in how public finances handle digital assets.
Kansas Bill Defines Unclaimed Digital Assets
The bill proposes that unclaimed digital assets, including Bitcoin, be transferred to the state after three years of inactivity. This would occur only after efforts to contact the asset owner fail. Under the legislation, these assets would be taken from custodial holders like exchanges, banks, and trust companies, rather than from individual self-custodied wallets.
The proposed law defines an “unclaimed digital asset” as one that has not seen any activity for three years. The clock for this period would only start once undeliverable communication is returned, either written or electronic. Importantly, the bill emphasizes that the three-year countdown halts if the owner shows any sign of activity, such as logging into an account or accessing assets with the same custodian.
Kansas to Establish Strategic Bitcoin Reserve
A central aspect of the bill is the creation of a Bitcoin and Digital Assets Reserve Fund, aimed at retaining digital assets in their native form. The bill prevents Bitcoin from being liquidated immediately, unlike traditional unclaimed property. Instead, it permits the state to keep Bitcoin as part of its strategic reserve while directing 10% of non-Bitcoin digital asset deposits to the general fund.
The bill also introduces a framework allowing the state’s designated custodian to stake Bitcoin and other assets. The custodian could earn staking rewards or airdropped assets. These generated rewards would be transferred into the reserve fund after three years, helping Kansas build its digital assets portfolio over time.
Digital Asset Management and Sales Guidelines
The bill outlines clear rules for how the state would handle the sale of digital assets. Cryptocurrencies with established market prices would be sold at those rates. For assets that lack active exchange listings, the state could use commercially reasonable methods to sell them.
The goal of these regulations is to minimize market disruption while ensuring proper management of digital assets. The bill aims to provide a structured, predictable approach to how Kansas handles its growing digital asset reserve. If passed, this legislation would put Kansas on the map as one of the few states experimenting with Bitcoin and digital asset reserves in public finance.
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