Rhode Island 2025 Regular Session

Rhode Island House Bill H6007 Compare Versions

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

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5	5	2025 -- H 6007
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7	7	LC001861
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9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2025
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO PUBLIC FINANCE -- THE RHODE ISLAND DIGITAL ASSET RETENTION
16	16	ACT
17	17	Introduced By: Representative Stephen M. Casey
18	18	Date Introduced: February 28, 2025
19	19	Referred To: House Finance
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22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. Declaration of purpose. 1
24	24	The general assembly finds and declares as follows: 2
25	25	(1) Inflation has eroded the purchasing power of the assets held in state funds managed by 3
26	26	the state treasurer as well as state retirement funds. 4
27	27	(2) This erosion diminishes the value of Rhode Island's reserves, affecting the financial 5
28	28	stability and economic security of the state and its taxpayers and residents. 6
29	29	(3) Although the state does not have direct control over the national money supply or the 7
30	30	policies that influence inflation, the state has a duty to safeguard its financial resources against the 8
31	31	impacts of inflation and other economic uncertainties. 9
32	32	(4) Throughout its sixteen (16) year history, Bitcoin has greatly risen in value, surpassing 10
33	33	a market capitalization of two trillion dollars ($2,000,000,000,000). 11
34	34	(5) Bitcoin is becoming more widely accepted as an international medium of exchange in 12
35	35	countries around the world, including the United States. 13
36	36	(6) Bitcoin is a digital asset that can serve as a hedge against inflation by a sovereign nation 14
37	37	or an investment advisor. 15
38	38	(7) Rhode Island should have access to assets such as Bitcoin to protect against inflation. 16
39	39	(8) The purpose of this act is to authorize the state treasurer, the Rhode Island employees' 17
40	40	retirement system, the Rhode Island public school employees' retirement system, or any other state 18
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44	44	retirement system to: 1
45	45	(i) Permit the inclusion of Bitcoin to serve as an asset of value and provide a hedge against 2
46	46	inflation, thus protecting the purchasing power of state funds; 3
47	47	(ii) Ensure that the investment strategies employed by the state treasurer, the Rhode Island 4
48	48	employees' retirement system, the Rhode Island public school employees' retirement system, or any 5
49	49	other state retirement system are aligned with the goal of enhancing the economic security and 6
50	50	financial resilience of Rhode Island; 7
51	51	(iii) Allow flexibility in investment decisions to respond to changing economic conditions 8
52	52	and emerging opportunities that may offer better protection or returns on state funds. 9
53	53	SECTION 2. Title 35 of the General Laws entitled "PUBLIC FINANCE" is hereby 10
54	54	amended by adding thereto the following chapter: 11
55	55	CHAPTER 4.1 12
56	56	THE RHODE ISLAND DIGITAL ASSET RETENTION ACT 13
57	57	35-4.1-1. Short title. 14
58	58	This act shall be known and may be cited as the "Rhode Island Digital Asset Retention 15
59	59	Act." 16
60	60	35-4.1-2. Definitions. 17
61	61	The following words and phrases, when used in this chapter, shall have the meanings given 18
62	62	to them in this section unless the context clearly indicates otherwise: 19
63	63	(1) "Bitcoin" means the decentralized digital currency launched in 2009, which is based on 20
64	64	Satoshi Nakamoto's white paper entitled "Bitcoin: A Peer-to-Peer Electronic Cash System." The 21
65	65	term includes the digital asset that is the basis of the Bitcoin exchange-traded product and regulated 22
66	66	by the United States Securities and Exchange Commission. 23
67	67	(2) "Digital asset" means a virtual currency, cryptocurrency, or natively electronic asset, 24
68	68	including Bitcoin, a stablecoin, a nonfungible token, or other digital-only asset that confers 25
69	69	economic, proprietary, or access rights or powers. 26
70	70	(3) "Exchange-traded product" means a financial instrument that is approved by the United 27
71	71	States Securities and Exchange Commission, the Commodities Future Trading Commission, or the 28
72	72	department of business regulation, is traded on a United States regulated exchange and derives its 29
73	73	value from an underlying pool of assets, including stocks, bonds, commodities, or indexes. 30
74	74	(4) "Private key" means a unique element of cryptographic data used for signing 31
75	75	transactions on a blockchain, known only to the owner of the unique element. 32
76	76	(5) "Qualified custodian" means a Federal or state chartered bank, trust company, special 33
77	77	purpose depository institution, or a company regulated by Rhode Island that has custody of Bitcoin 34
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81	81	or a digital asset for an approved exchange-traded product. 1
82	82	(6) "Secure custody solution" means a technological product or a blended product and 2
83	83	service that meets the following criteria: 3
84	84	(i) Has a cryptographic private key securing a digital asset, accessible exclusively by a 4
85	85	government entity. 5
86	86	(ii) Has a cryptographic private key securing a digital asset, exclusively contained within 6
87	87	an encrypted environment and accessible only via an end-to-end encrypted channel. 7
88	88	(iii) Has a cryptographic private key securing a digital asset, never contained by, accessible 8
89	89	by, or controllable via a smartphone. 9
90	90	(iv) Has hardware containing a cryptographic private key securing a digital asset, 10
91	91	maintained in at least two (2) geographically diversified specially designated secure data centers. 11
92	92	(v) Enforces a multiparty governance structure for authorizing transactions and user access 12
93	93	controls. 13
94	94	(vi) Logs each user-initiated action. 14
95	95	(vii) Undergoes regular code audits and penetration testing from an auditing firm, promptly 15
96	96	addressing vulnerabilities identified. 16
97	97	(viii) Is provided by an entity that has implemented a disaster recovery protocol ensuring 17
98	98	customer access to digital assets if the entity becomes unavailable. 18
99	99	(7) "State retirement fund" means the Rhode Island employees' retirement fund, the Rhode 19
100	100	Island public school employees' retirement fund, or any other state retirement fund. 20
101	101	(8) "System" means the Rhode Island employees' retirement system, the Rhode Island 21
102	102	public school employees' retirement system, or any other state retirement system that administers 22
103	103	a state retirement fund. 23
104	104	35-4.1-3. Authorization for state treasurer to invest in Bitcoin or digital assets. 24
105	105	(a) Authorization. The state treasurer may invest in Bitcoin or digital assets with money 25
106	106	that is unexpended, unencumbered, or uncommitted and deposited in any of the following funds: 26
107	107	(1) The general fund; 27
108	108	(2) The budget stabilization reserve fund; and 28
109	109	(3) Any other investment fund managed directly by the state treasurer. 29
110	110	(b) Limitations. The amount of money that the state treasurer may invest in Bitcoin or 30
111	111	digital assets from a fund specified under subsection (a) of this section during the course of a 31
112	112	calendar year may not exceed ten percent (10%) of the total amount of money deposited in the fund 32
113	113	at the time of the investment. 33
114	114	(c) Conditions. Bitcoin or digital assets acquired by a fund specified under subsection (a) 34
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118	118	of this section shall be held directly by the state treasurer through the use of a secure custody 1
119	119	solution on behalf of the State of Rhode Island by a qualified custodian or in the form of an 2
120	120	exchange-traded product issued by an investment company registered in Rhode Island. 3
121	121	(d) Loans. If the state treasurer can loan Bitcoin or digital assets without increasing the 4
122	122	financial risk to the state, the state treasurer may loan Bitcoin or digital assets to generate additional 5
123	123	returns for the state. The state treasurer shall promulgate rules and regulations for the purpose of 6
124	124	implementing this subsection. 7
125	125	35-4.1-4. Authorization for systems to invest in exchange-traded products. 8
126	126	A system may invest in an exchange-traded product with money deposited in a state 9
127	127	retirement fund that is unexpended, unencumbered, or uncommitted. 10
128	128	SECTION 3. This act shall take effect on September 1, 2025. 11
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135	135	EXPLANATION
136	136	BY THE LEGISLATIVE COUNCIL
137	137	OF
138	138	A N A C T
139	139	RELATING TO PUBLIC FINANCE -- THE RHODE ISLAND DIGITAL ASSET RETENTION
140	140	ACT
141	141	***
142	142	This act would allow the state treasurer to acquire, hold and have the option to invest 1
143	143	uncommitted funds in digital assets. 2
144	144	This act would take effect on September 1, 2025. 3
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