Alabama 2025 Regular Session

Alabama Senate Bill SB283 Compare Versions

Only one version of the bill is available at this time.

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1	1	SB283INTRODUCED
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3	3	SB283
4	4	PSI4FGE-1
5	5	By Senator Barfoot
6	6	RFD: Banking and Insurance
7	7	First Read: 01-Apr-25
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12	12	5 PSI4FGE-1 04/01/2025 HL (F)HL 2025-1068
13	13	Page 1
14	14	First Read: 01-Apr-25
15	15	SYNOPSIS:
16	16	This bill would authorize the State Treasurer to
17	17	invest certain monies in digital assets.
18	18	A BILL
19	19	TO BE ENTITLED
20	20	AN ACT
21	21	Relating to the State Treasurer; to permit the
22	22	investment of certain funds in digital assets.
23	23	BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
24	24	Section 1. For the purpose of this act, the following
25	25	words and phrases have the meanings respectively ascribed to
26	26	them by this section.
27	27	(1) BLOCKCHAIN. Data that is shared across a network to
28	28	create a ledger of verified transactions or information among
29	29	network participants linked using cryptography, to maintain
30	30	the integrity of the ledger, and to execute other functions
31	31	and distributed among network participants in an automated
32	32	fashion to concurrently update network participants on the
33	33	state of the ledger and any other functions.
34	34	(2) DIGITAL ASSET. A virtual currency, cryptocurrency,
35	35	native electronic asset, stablecoin, non-fungible token, or
36	36	any other digital-only asset that confers economic, propriety,
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66	66	any other digital-only asset that confers economic, propriety,
67	67	or access rights or powers.
68	68	(3) EXCHANGE-TRADED PRODUCT (ETP). Any financial
69	69	instrument that is approved by the United States Securities
70	70	and Exchange Commission, or the Commodities Future Trading
71	71	Commission, that is traded on an American regulated exchange
72	72	and derives its value from an underlying pool of assets, such
73	73	as stocks, bonds, commodities, or indexes.
74	74	(4) PRIVATE KEY. A unique element of cryptographic data
75	75	used for signing transactions on a blockchain that is known to
76	76	the owner of the unique element.
77	77	(5) QUALIFIED CUSTODIAN. Any federal or state chartered
78	78	bank, trust company, or a company regulated by the state that
79	79	has custody of a digital asset for an exchange-traded product.
80	80	(6) SECURE CUSTODY SOLUTION. A technological product or
81	81	blended product and service that has all of the following
82	82	characteristics:
83	83	a. The private keys that secure digital assets are
84	84	exclusively known and accessible by the governmental entity.
85	85	b. The private keys that secure digital assets are
86	86	exclusively contained within an encrypted environment and are
87	87	accessible only via end-to-end encrypted channels.
88	88	c. The private keys that secure digital assets are
89	89	never contained by, accessible by, or controllable via a
90	90	smartphone.
91	91	d. Any hardware that contains the private keys that
92	92	secure digital assets is maintained in at least two
93	93	geographically diversified specially designated secure data
94	94	centers.
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124	124	centers.
125	125	e. The secure custody solution enforces a multi-party
126	126	governance structure for authorizing transactions, enforces
127	127	user access controls, and logs all user-initiated actions.
128	128	f. The provider of the secure custody solution has
129	129	implemented a disaster recovery protocol that ensures customer
130	130	access to digital assets in the event the provider becomes
131	131	unavailable.
132	132	g. The secure custody solution undergoes regular code
133	133	audits and penetration testing from audit firms, and any
134	134	identified vulnerabilities are promptly remedied.
135	135	Section 2. (a) Subject to the requirements of this
136	136	section, the State Treasurer may invest any monies otherwise
137	137	available to the State Treasurer for investment in digital
138	138	assets.
139	139	(b) The investment in digital assets from any of the
140	140	funds described in this section shall not exceed, in
141	141	aggregate, 10 percent of the balance of the fund at the time
142	142	of the investment.
143	143	(c) The State Treasurer may invest in digital assets
144	144	that meet either of the following:
145	145	(1) The digital assets are an exchange-traded product.
146	146	(2) The average market capitalization of the digital
147	147	assets over the preceding 12 months is at least seven hundred
148	148	fifty billion dollars ($750,000,000,000), as determined by the
149	149	State Treasurer using a commercially reasonable method.
150	150	(d) Any digital asset acquired as an investment under
151	151	this section must be held in one of the following ways:
152	152	(1) Directly by the State Treasurer through the use of
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182	182	(1) Directly by the State Treasurer through the use of
183	183	a secure custody solution.
184	184	(2) On behalf of the state by a qualified custodian.
185	185	(3) In the form of an exchange-traded product issued by
186	186	a person registered pursuant to Chapter 6 of Title 8, Code of
187	187	Alabama 1975.
188	188	(e) The State Treasurer may loan the digital assets
189	189	acquired as an investment under this section to bring further
190	190	returns to the applicable fund if the State Treasurer
191	191	determines that the loan does not increase the financial risk
192	192	of the investment.
193	193	(f) The State Treasurer may adopt rules to implement
194	194	this section.
195	195	Section 3. This act shall become effective on October
196	196	1, 2025.
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