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Kansas Senate Bill 352 proposes a Bitcoin reserve and digital assets managed by the state treasurer.
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The fund will hold abandoned crypto assets including airdrops and staking rewards.
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Bitcoin cannot be transferred to the general fund but 10% of other deposits may.
Kansas lawmakers have introduced legislation to create a Bitcoin reserve fund and digital assets, marking a first step for a US state in managing cryptocurrencies under the public finance rules.
Senate Bill 352, introduced by state senator Craig Bowser on 21 January, focuses on updating Kansas laws on unclaimed property to include digital assets like cryptocurrencies.
How Reserves Would Work
The bill would create a Bitcoin and digital asset reserve fund within the Kansas State Treasury, which would be administered by the Kansas State treasurer. The fund would collect digital asset that are considered abandoned by state law, such as cryptocurrencies.
The law allows the treasurer of the company to manage these assets. This includes receiving rewards for airdrops and staking once the assets are unclaimed for a specified period.
The bill makes it clear that Bitcoins themselves will not be transferred into the general fund of the state.
Airdrops, Staking and Revenue Rules
The bill stipulates that while Bitcoin would remain in reserve, 10% of each digital assets deposit must be credited to Kansas general fund, subjected to legislative appropriations. The remaining assets will remain in the reserve fund.
The bill also defines crypto-related terminology such as “digital asset”, “airdrop” and “staking”, providing legal clarity about how these mechanisms are dealt with under state law.
Once ownership claims expire, the state will hold any stake rewards or airdrops that are earned from abandoned digital assets.
Update Unclaimed Property Laws
Senate Bill 352 amends Kansas unclaimed property laws to include digital assets along with traditional financial instruments. Digital assets are generally considered abandoned after a period of three years with no owner activity or communication.
If assets are not claimed after being transferred to a state approved custodian for three years, any staking or airdrop rewards generated would be placed in the reserve fund.
Context in a broader sense
Kansas is one of a growing number US states that are examining the management of cryptocurrencies received by government agencies through legal processes or held by them. The bill does not allow the state to directly purchase Bitcoin, but it does create a framework that allows the state to hold, manage, and benefit from digital assets under state control.
Other states, such as New Hampshire and Arizona have passed laws that allow their treasurers the ability to manage or store digital assets.
The Kansas legislature is currently reviewing the legislation and it has not yet been passed into law.
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