Florida Senate - 2025 SB 550 By Senator Gruters 22-01202-25 2025550__ 1 A bill to be entitled 2 An act relating to investments of public funds in 3 Bitcoin; creating s. 17.573, F.S.; defining terms; 4 authorizing the Chief Financial Officer to make 5 investments in Bitcoin and other digital assets for a 6 certain purpose; requiring the Chief Financial Officer 7 to ensure his or her investment strategies align with 8 a certain goal; requiring the Chief Financial Officer 9 to maintain flexibility in certain investment 10 decisions; authorizing the Chief Financial Officer to 11 invest money in Bitcoin from certain public funds; 12 providing limits to such investments; providing 13 requirements for holding acquired Bitcoin; authorizing 14 the Chief Financial Officer and other parties to loan 15 Bitcoin under specified circumstances; requiring the 16 Chief Financial Officer to adopt rules governing such 17 loans; requiring taxes and fees paid in Bitcoin to be 18 transferred to the General Revenue Fund; requiring the 19 General Revenue Fund to reimburse designated funds in 20 United States currency for such payments; amending ss. 21 17.57 and 17.61, F.S.; conforming provisions to 22 changes made by the act; amending s. 121.151, F.S.; 23 authorizing the Trustees of the State Board of 24 Administration to invest and reinvest available funds 25 of the System Trust Fund in Bitcoin; providing 26 requirements for such investments; defining terms; 27 amending s. 280.03, F.S.; providing that investments 28 of public funds in Bitcoin are exempt from certain 29 security requirements; providing an effective date. 30 31 WHEREAS, inflation has eroded the purchasing power of 32 assets held in state funds managed by the Chief Financial 33 Officer, and this erosion diminishes the value of the states 34 reserves, affecting the financial stability and economic 35 security of this state, its taxpayers, and its residents, and 36 WHEREAS, although the state does not have direct control 37 over the national money supply or the policies that influence 38 inflation, it has a responsibility to safeguard Floridas 39 financial resources against the impacts of inflation and other 40 economic uncertainties, and 41 WHEREAS, throughout its history, Bitcoin has greatly risen 42 in value and is becoming more widely accepted as an 43 international medium of exchange, and countries around the 44 world, including the United States, hold Bitcoin within their 45 treasury departments, and 46 WHEREAS, Bitcoin is viewed as a hedge against inflation by 47 sovereign nations and prominent investment advisors, including 48 BlackRock, Fidelity, and Franklin Templeton, and 49 WHEREAS, the state should have access to tools such as 50 Bitcoin to protect against inflation, NOW, THEREFORE, 51 52 Be It Enacted by the Legislature of the State of Florida: 53 54 Section 1.Section 17.573, Florida Statutes, is created to 55 read: 56 17.573Investments in Bitcoin. 57 (1)As used in this section, the term: 58 (a)Bitcoin means the decentralized digital currency 59 launched in 2009, which allows online payments to be sent 60 directly from one party to another without going through a 61 financial institution. The term includes the digital assets 62 underlying Bitcoin exchange-traded products regulated by the 63 Securities and Exchange Commission. 64 (b)Exchange-traded product means a financial instrument 65 approved by the Securities and Exchange Commission, the 66 Commodity Futures Trading Commission, or the Department of 67 Financial Services which is traded on a national stock exchange 68 and derives its value from an underlying pool of assets, 69 including stocks, bonds, commodities, and indexes. 70 (c)Private key means a unique element of cryptographic 71 data used for signing transactions on a blockchain, known only 72 to the owner. 73 (d)Qualified custodian means a federal bank, a Florida 74 state-chartered bank, a trust company, a special-purpose 75 depository institution, or a company regulated by the state 76 which provides custody services for Bitcoin as part of an 77 approved exchange-traded product. 78 (e)Secure custody solution means a technological product 79 or blended product and service meeting all of the following 80 criteria: 81 1.The cryptographic private keys are: 82 a.Exclusively known by and accessible to the governmental 83 entity. 84 b.Contained within an encrypted environment and accessible 85 only through end-to-end encrypted channels. 86 c.Never stored on or accessible through a smartphone. 87 2.The hardware containing the cryptographic private keys 88 is maintained in at least two geographically diverse, secure 89 data centers. 90 3.A multiparty governance structure for authorizing 91 transactions is implemented, user access control is enforced, 92 and all user-initiated actions are logged. 93 4.The provider of the technological product or blended 94 product and service has implemented a disaster recovery protocol 95 ensuring access to assets if the provider becomes unavailable. 96 5.The technological product or blended product and service 97 undergoes regular code audits and penetration testing, with 98 identified vulnerabilities promptly addressed. 99 (2)The Chief Financial Officer: 100 (a)May include Bitcoin and other digital assets to serve 101 as stores of value and provide a hedge against inflation, 102 thereby protecting the purchasing power of state funds. 103 (b)Must ensure that the investment strategies he or she 104 employs align with the goal of enhancing this states economic 105 security and financial resilience. 106 (c)Must maintain flexibility in investment decisions to 107 respond to changing economic conditions and emerging 108 opportunities that may offer better protection or returns on 109 state funds. 110 (3)(a)1.The Chief Financial Officer may invest money in 111 Bitcoin from the following funds: 112 a.The General Revenue Fund. 113 b.The Budget Stabilization Fund. 114 c.All the trust funds and all agency funds of each state 115 agency and of the judicial branch, as those terms are defined in 116 s. 216.011. 117 d.Funds of any board, association, or entity created by 118 the State Constitution or by law, upon request of such board, 119 association, or entity. 120 e.Any other state fund deemed appropriate by the 121 Legislature. 122 2.The amount of public funds that the Chief Financial 123 Officer may invest in Bitcoin may not exceed 10 percent of the 124 total funds in any account. 125 (b)1.The Bitcoin acquired under paragraph (a) must be 126 held: 127 a.Directly by the Chief Financial Officer through the use 128 of a secure custody solution; 129 b.On behalf of the state by a qualified custodian; or 130 c.In the form of an exchange-traded product issued by an 131 investment company registered with the Securities and Exchange 132 Commission under the Investment Company Act of 1940, as amended. 133 2.The Chief Financial Officer, and other parties with the 134 permission of the Chief Financial Officer, may loan the Bitcoin 135 in state funds to generate additional returns for this state if 136 such loans do not increase financial risk. The Chief Financial 137 Officer shall adopt rules governing such loans. 138 (4)Taxes or fees paid to the state in Bitcoin must be 139 transferred to the General Revenue Fund. The General Revenue 140 Fund shall reimburse the designated fund for the value of the 141 Bitcoin payment in United States currency for such taxes or 142 fees. 143 Section 2.Paragraph (b) of subsection (1) and subsections 144 (2) and (7) of section 17.57, Florida Statutes, are amended to 145 read: 146 17.57Deposits and investments of state money. 147 (1) 148 (b)The Chief Financial Officer, or other parties with the 149 permission of the Chief Financial Officer, shall: 150 1.Deposit the money of the state or any money in the State 151 Treasury in such qualified public depositories of the state as 152 will offer satisfactory collateral security for such deposits, 153 pursuant to chapter 280; or 154 2.Invest the money of the state or any money in the State 155 Treasury in Bitcoin pursuant to s. 17.573 and deposit the 156 remainder of such money in the qualified public depositories 157 described in subparagraph 1. 158 159 It is the duty of the Chief Financial Officer, consistent with 160 the cash requirements of the state, to keep such money fully 161 invested or deposited as provided herein in order that the state 162 may realize maximum earnings and benefits. Nothing in this 163 section precludes shall preclude credit unions designated as 164 public depositories from participation. 165 (2)(a)The Chief Financial Officer shall make funds 166 available to meet the disbursement needs of the state. Funds 167 which are not needed for this purpose must shall be: 168 1.Placed in qualified public depositories that will pay 169 rates established by the Chief Financial Officer at levels not 170 less than the prevailing rate for United States Treasury 171 securities with a corresponding maturity; or 172 2.Invested in Bitcoin pursuant to s. 17.573, and the 173 remainder of such funds placed in the qualified public 174 depositories described in subparagraph 1. 175 (b)In the event money is available for interest-bearing 176 time deposits or savings accounts as provided herein and 177 qualified public depositories are unwilling to accept such money 178 and pay thereon the rates established above, the then such money 179 which qualified public depositories are unwilling to accept must 180 shall be invested in: 181 1.(a)Direct United States Treasury obligations. 182 2.(b)Obligations of the Federal Farm Credit Banks. 183 3.(c)Obligations of the Federal Home Loan Bank and its 184 district banks. 185 4.(d)Obligations of the Federal Home Loan Mortgage 186 Corporation, including participation certificates. 187 5.(e)Obligations guaranteed by the Government National 188 Mortgage Association. 189 6.(f)Obligations of the Federal National Mortgage 190 Association. 191 7.(g)Commercial paper of prime quality of the highest 192 letter and numerical rating as provided for by at least one 193 nationally recognized rating service. 194 8.(h)Time drafts or bills of exchange drawn on and 195 accepted by a commercial bank, otherwise known as bankers 196 acceptances, which are accepted by a member bank of the Federal 197 Reserve System having total deposits of not less than $400 198 million or which are accepted by a commercial bank which is not 199 a member of the Federal Reserve System with deposits of not less 200 than $400 million and which is licensed by a state government or 201 the Federal Government, and whose senior debt issues are rated 202 in one of the two highest rating categories by a nationally 203 recognized rating service and which are held in custody by a 204 domestic bank which is a member of the Federal Reserve System. 205 9.(i)Corporate obligations or corporate master notes of 206 any corporation within the United States, if the long-term 207 obligations of such corporation are rated by at least two 208 nationally recognized rating services in any one of the four 209 highest classifications. However, if such obligations are rated 210 by only one nationally recognized rating service, then the 211 obligations must shall be rated in any one of the two highest 212 classifications. 213 10.(j)Obligations of the Student Loan Marketing 214 Association. 215 11.(k)Obligations of the Resolution Funding Corporation. 216 12.(l)Mortgage-backed securities of the highest credit 217 quality. 218 13.(m)Asset-backed securities rated by at least two 219 nationally recognized rating services in any one of the three 220 highest classifications. However, if such obligations are rated 221 by only one nationally recognized rating service, the 222 obligations must be rated in any one of the two highest 223 classifications. 224 14.(n)Any obligations not previously listed which are 225 guaranteed as to principal and interest by the full faith and 226 credit of the United States Government or are obligations of 227 United States agencies or instrumentalities which are rated in 228 the highest category by a nationally recognized rating service. 229 15.(o)Commingled no-load investment funds or no-load 230 mutual funds in which all securities held by the funds are 231 authorized in this subsection. 232 16.(p)Money market mutual funds as defined and regulated 233 by the Securities and Exchange Commission. 234 17.(q)Obligations of state and local governments rated in 235 any of the four highest classifications by at least two 236 nationally recognized rating services. However, if such 237 obligations are rated by only one nationally recognized rating 238 service, then the obligations must shall be rated in any one of 239 the two highest classifications. 240 18.(r)Covered put and call options on investment 241 instruments authorized in this subsection for the purpose of 242 hedging transactions by investment managers to mitigate risk or 243 to facilitate portfolio management. 244 19.(s)Negotiable certificates of deposit issued by 245 financial institutions whose long-term debt is rated in one of 246 the three highest categories by at least two nationally 247 recognized rating services, the investment in which may shall 248 not be prohibited by any provision of chapter 280. 249 20.(t)Foreign bonds denominated in United States dollars 250 and registered with the Securities and Exchange Commission for 251 sale in the United States, if the long-term obligations of such 252 issuers are rated by at least two nationally recognized rating 253 services in any one of the four highest classifications. 254 However, if such obligations are rated by only one nationally 255 recognized rating service, the obligations must shall be rated 256 in any one of the two highest classifications. 257 21.(u)Convertible debt obligations of any corporation 258 domiciled within the United States, if the convertible debt 259 issue is rated by at least two nationally recognized rating 260 services in any one of the four highest classifications. 261 However, if such obligations are rated by only one nationally 262 recognized rating service, then the obligations must shall be 263 rated in any one of the two highest classifications. 264 22.(v)Securities not otherwise described in this 265 subsection. However, no not more than 3 percent of the funds 266 under the control of the Chief Financial Officer may shall be 267 invested in securities described in this paragraph. 268 23.(w)Derivatives of investment instruments authorized in 269 subparagraphs 1.-22 paragraphs (a)-(v). 270 24.(x)Futures and options on futures, provided the 271 instruments for such purpose are traded on a securities exchange 272 or board of trade regulated by the Securities and Exchange 273 Commission or the Commodity Futures Trading Commission. 274 25.Bitcoin pursuant to s. 17.573. 275 276 These investments may be in varying maturities and may be in 277 book-entry form. Investments made pursuant to this subsection 278 may be under repurchase agreement or reverse repurchase 279 agreement. The Chief Financial Officer may hire registered 280 investment advisers and other consultants to assist in 281 investment management and to pay fees directly from investment 282 earnings. Investment securities, proprietary investment services 283 related to contracts, performance evaluation services, 284 investment-related equipment or software used directly to assist 285 investment trading or investment accounting operations including 286 bond calculators, telerates, Bloombergs, special program 287 calculators, intercom systems, and software used in accounting, 288 communications, and trading, and advisory and consulting 289 contracts made under this section are exempt from the provisions 290 of chapter 287. 291 (7)In addition to the deposits authorized under this 292 section and notwithstanding any other provisions of law, funds 293 that are not needed to meet the disbursement needs of the state 294 may be deposited, or invested under s. 17.573 and the remainder 295 of the funds which is not invested under s. 17.573 deposited, by 296 the Chief Financial Officer in accordance with the following 297 conditions for fund deposits: 298 (a)The funds are initially deposited in a qualified public 299 depository, as defined in s. 280.02, selected by the Chief 300 Financial Officer. 301 (b)The selected depository arranges for depositing the 302 funds in financial deposit instruments insured by: 303 1.The Federal Deposit Insurance Corporation in one or more 304 federally insured banks or savings and loan associations, 305 wherever located, for the account of the state. 306 2.For credit unions designated as qualified public 307 depositories, the National Credit Union Share Insurance Fund. 308 (c)The full amount of the principal and accrued interest 309 of each financial deposit instrument is insured by the Federal 310 Deposit Insurance Corporation or, for credit unions designated 311 as qualified public depositories, the National Credit Union 312 Share Insurance Fund. 313 (d)The selected depository acts as custodian for the state 314 with respect to each financial deposit instrument issued for its 315 account. 316 Section 3.Subsection (1) of section 17.61, Florida 317 Statutes, is amended to read: 318 17.61Chief Financial Officer; powers and duties in the 319 investment of certain funds. 320 (1)The Chief Financial Officer shall invest all general 321 revenue funds and all the trust funds and all agency funds of 322 each state agency, and of the judicial branch, as defined in s. 323 216.011, and may, upon request, invest funds of any board, 324 association, or entity created by the State Constitution or by 325 law, except for the funds required to be invested pursuant to 326 ss. 215.44-215.53, by the procedure and in the authorized 327 securities or in Bitcoin prescribed in s. 17.57; for this 328 purpose, the Chief Financial Officer may open and maintain one 329 or more demand and safekeeping accounts in any bank or savings 330 association for the investment and reinvestment and the 331 purchase, sale, and exchange of funds and securities in the 332 accounts. Funds in such accounts used solely for investments and 333 reinvestments are shall be considered investment funds and not 334 funds on deposit, and such funds are shall be exempt from the 335 provisions of chapter 280. In addition, the securities or 336 investments purchased or held under the provisions of this 337 section and s. 17.57 may be loaned to securities dealers and 338 banks and may be registered by the Chief Financial Officer in 339 the name of a third-party nominee in order to facilitate such 340 loans, provided the loan is collateralized by cash or United 341 States government securities having a market value of at least 342 100 percent of the market value of the securities loaned. The 343 Chief Financial Officer shall keep a separate account, 344 designated by name and number, of each fund. Individual 345 transactions and totals of all investments, or the share 346 belonging to each fund, must shall be recorded in the accounts. 347 Section 4.Section 121.151, Florida Statutes, is amended to 348 read: 349 121.151Investments. 350 (1)The Board of Administration, created by authority of 351 the State Constitution, shall invest and reinvest available 352 funds of the System Trust Fund in accordance with the provisions 353 of ss. 215.44-215.53. 354 (2)(a)The Board of Administration may also invest and 355 reinvest available funds of the System Trust Fund in Bitcoin. 356 The amount of funds that the board may invest and reinvest in 357 Bitcoin may not exceed 10 percent of the total funds. 358 (b)The Bitcoin acquired under paragraph (a) must be held: 359 1.Directly by the board through the use of a secure 360 custody solution; 361 2.On behalf of the board by a qualified custodian; or 362 3.In the form of an exchange-traded product issued by an 363 investment company registered with the Securities and Exchange 364 Commission under the Investment Company Act of 1940, as amended. 365 (c)As used in this subsection, the terms Bitcoin, 366 exchange-traded product, qualified custodian, and secure 367 custody solution have the same meanings as in s. 17.573(1). 368 Section 5.Paragraph (f) of subsection (3) of section 369 280.03, Florida Statutes, is amended to read: 370 280.03Public deposits to be secured; prohibitions; 371 exemptions. 372 (3)The following are exempt from the requirements of, and 373 protection under, this chapter: 374 (f)Public deposits and investments made in accordance with 375 s. 17.57(7), s. 17.573, or s. 218.415(23). 376 Section 6.This act shall take effect July 1, 2025.