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HOUSE DOCKET, NO. 3762 FILED ON: 1/17/2025
HOUSE . . . . . . . . . . . . . . . No. 3279
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
Christopher J. Worrell
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act allowing for fiscal resilience through strategic investment in stable digital financial
assets.
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PETITION OF:
NAME:DISTRICT/ADDRESS :DATE ADDED:Christopher J. Worrell5th Suffolk1/17/2025 1 of 6
HOUSE DOCKET, NO. 3762 FILED ON: 1/17/2025
HOUSE . . . . . . . . . . . . . . . No. 3279
By Representative Worrell of Boston, a petition (accompanied by bill, House, No. 3279) of
Christopher J. Worrell relative to taxation and investment in digital financial assets. Revenue.
The Commonwealth of Massachusetts
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In the One Hundred and Ninety-Fourth General Court
(2025-2026)
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An Act allowing for fiscal resilience through strategic investment in stable digital financial
assets.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. The General Laws are hereby amended by inserting after chapter 64N the
2following new chapter:-
3 CHAPTER 64O. Taxation and Investment in Digital Financial Assets
4 Section 1. Intent
5 (a) It shall be the intent of the General Court to authorize the state treasurer and public
6pension funds to:
7 (i) permit the inclusion of bitcoin and other stable digital financial assets to serve as
8stores of value and provide a hedge against inflation, thereby protecting the purchasing power of
9state funds; 2 of 6
10 (ii) ensure that the investment strategies employed by the state treasurer and public
11pension funds are aligned with the goal of enhancing the economic security and financial
12resilience of the commonwealth; and
13 (ii) allow flexibility in investment decisions to respond to changing economic conditions
14and emerging opportunities that may offer better protection or returns on state funds.
15 Section 2. Definitions
16 As used in this chapter, the following terms shall have the following meanings unless the
17context clearly requires otherwise:
18 "Bitcoin", the decentralized digital currency launched in 2009, a digital asset which is the
19basis of the Bitcoin exchange traded product which is regulated by the federal securities and
20exchange commission.
21 "Digital financial asset", any digital representation of value that is recorded on a
22cryptographically secured distributed ledger of virtual currency, cryptocurrencies, natively
23electronic assets including stablecoins and non-fungible tokens or other exclusively digital assets
24that confer economic, proprietary or access rights or powers that are not cash; provided,
25however, that for the purposes of taxation pursuant to sections 58 to 65C, inclusive, digital assets
26shall be considered a cash equivalent.
27 "Exchange-traded product”, any financial instrument that is approved by the federal
28securities and exchange commission, the federal commodities future trading commission,or the
29division of banks that is traded on a United States regulated exchange and derives its value from
30an underlying pool of assets, such as stocks, bonds, commodities or indexes. 3 of 6
31 “Private key”, a unique element of cryptographic data used for signing transactions on a
32blockchain, which is known to the owner of the private key.
33 “Qualified custodian”, any federal or state-chartered bank, trust company or special
34purpose depository institution or a company regulated by the state which custodies digital assets
35for an approved exchange-raded product.
36 “Secure custody solution”, a technological product or blended product and service which
37has the following characteristics:
38 (1) The cryptographic private keys that secure digital assets are exclusively known by
39and accessible by a government entity;
40 (2) the cryptographic private keys that secure digital assets are exclusively contained
41within an encrypted environment and accessible exclusivelyt via end-to-end encrypted channels;
42 (3) The cryptographic private keys that secure digital assets are never contained by,
43accessible by, or controllable via a smartphone;
44 (4) Any hardware that contains the cryptographic private keys that secure digital assets is
45maintained in at least 2 geographically diversified and specially designated secure data centers;
46 (5) The secure custody solution enforces a multi-party governance structure for
47authorizing transactions, enforces user access controls and logs all user-initiated actions;
48 (6) The provider of the secure custody solution has implemented a disaster recovery
49protocol that ensures customer access to assets in the event the provider becomes unavailable;
50and 4 of 6
51 (7) The secure custody solution undergoes regular code audits and penetration testing
52from audit firms; provided, however, that any identified vulnerabilities shall be promptly
53remedied.
54 Section 3. Imposition; rate; time of payment
55 (a) Except as otherwise provided in this chapter or any other general law to the contrary,
56an excise is hereby imposed upon digital mediums of exchange at the rate of 5 per cent of the
57total amount of digital gross revenues in digital currency obtained by a taxpayer. The excise shall
58be paid by the taxpayer to the commissioner at the time provided for filing the returns required
59by section 16 of chapter 62C.
60 (b) If a taxpayer received any digital asset as compensation for services or disposed of
61any digital asset that was held for sale to customers in a trade or business, the taxpayer shall
62report the income as a taxpayer would be required to report other income of the same type.
63 (c) If a digital financial asset may be loaned without increasing the financial risk of the
64state, the state treasurer shall be allowed to loan the digital asset to bring further return to the
65state through regulations, rules or guidelines established by the state treasurer.The state treasurer
66may, if they deem such action necessary for the protection of the revenue of the commonwealth,
67recommend to the commissioner additional regulations for the taxation rate of digital financial
68assets, which the commissioner may promulgate.
69 (d) All sums received by the commissioner under this section shall be distributed,
70credited and paid by the state treasurer upon certification of the commissioner to the amount of
71the sums received from the sales of digital currency by that taxpayer. A taxpayer seeking to 5 of 6
72dispute the commissioner's calculation of its distribution under this subsection shall notify the
73commissioner, in writing, not later than 1 year from the date the tax was distributed.
74 (e) Any state retirement fund may invest in exchange traded products that have been duly
75registered by the federal securities and exchange commission, the federal commodity future
76trading commission or the securities division of the office of the state secretary.
77 Section 4. Application and investment of tax revenue
78 (a) The state treasurer shall deposit revenue collected pursuant to this chapter, other than
79revenue collected pursuant to section 2 of chapter 64H, in the General Fund and it shall be
80subject to appropriation. The General Fund shall reimburse whatever fund the qualifying digital
81asset was designated to with United States currency.
82 (b) The state treasurer may invest public funds in Bitcoin from the following funds:
83 (1) The General Fund;
84 (2) The Commonwealth Stabilization Fund established pursuant to section 2H of chapter
8529;
86 (3) The State Retiree Benefits Trust Fund established pursuant to section 24 of chapter
8732A; or
88 (4) Any other state fund deemed appropriate as requested by the state treasurer and
89approved by the General Court.
90 (c) The amount of public funds that the state treasurer may invest in Bitcoin shall not
91exceed 10 per cent of the total amount of public funds in the applicable account. 6 of 6
92 (d) Any digital assets acquired by any of the funds listed in subsection (b) shall be held:
93(i) directly by the state treasurer through the use of a secure custody solution; (ii) on behalf of the
94state by a qualified custodian; or (iii) in the form of an exchange-traded product issued by a
95registered investment company.
96 SECTION 2. Section 1 shall take effect upon enactment.