Virginia Senate Panel Approves Bill to Launch Strategic Bitcoin Reserve

TLDR

• Virginia lawmakers have advanced Senate Bill 557 through a Senate committee with a 13–2 vote.
• The bill proposes the creation of the Commonwealth Strategic Cryptocurrency Reserve Fund.
• The fund would allow the state to directly invest in Bitcoin and other qualifying digital assets.
• Only cryptocurrencies with a $500 billion average market cap over 24 months would be eligible.
• The state treasurer would manage the fund following a prudent person investment standard.

Virginia moved a step closer to creating a state-managed cryptocurrency reserve after a committee vote cleared Senate Bill 557, which proposes a special fund allowing direct investment in Bitcoin. The bill passed the Senate General Laws and Technology Committee with a 13–2 vote, marking early legislative progress. Sponsored by Senator Bryce Reeves, the bill aims to modernize treasury management and explore digital assets within state reserves.

Bitcoin Reserve Framework Approved by Committee

Senate Bill 557 would create the Commonwealth Strategic Cryptocurrency Reserve Fund, administered by the State Treasurer of Virginia. The fund would be nonreverting, which means unspent money would not return to the general fund each fiscal year. All funds, including any purchased or received cryptocurrencies, would remain within the reserve account.

Supporters believe the reserve could help Virginia prepare for future digital finance trends and improve diversification. The bill requires all cryptocurrency in the fund to meet a strict market cap threshold of $500 billion over 24 months. This rule ensures the fund limits exposure to well-established assets, primarily Bitcoin.

The bill also addresses how to handle events like blockchain forks and airdrops. Under the proposal, the state would retain ownership of any digital assets generated. It lays out a clear structure for the inclusion of such assets into the reserve.

Virginia to Authorize Secure Management and Oversight

The Treasurer would follow a “prudent person” standard to manage the cryptocurrency fund and reduce financial risk. The legislation permits derivatives trading if considered beneficial for fund operations and long-term stability. It also authorizes contracts with regulated custodians and liquidity providers to ensure secure asset management.

Third-party services must use secure solutions such as cold storage to protect cryptocurrency holdings. To ensure transparency, independent audits by certified public accountants would be allowed. Reports will be required every two years, including details of holdings and changes in valuation.

The law establishes a five-member advisory committee with cryptocurrency investment experience. This group would help define policy and valuation strategies for the fund. Members would include both public finance professionals and digital asset specialists.

Other U.S. States Join Bitcoin Legislation Wave

South Dakota lawmakers introduced House Bill 1155 to permit public funds to invest up to 10% in Bitcoin. The proposal represents a growing legislative interest in digital currency investments by state governments. It remains under consideration in the South Dakota House.

Rhode Island introduced Senate Bill S2021 to offer a tax exemption for small Bitcoin transactions starting in 2027. The bill sets monthly and annual limits of $5,000 and $20,000, respectively. Businesses and residents would self-certify eligibility while maintaining simple records.

New Hampshire passed House Bill 302 in 2025, allowing up to 5% of certain public funds in Bitcoin. The legislation set the framework for treasury-level crypto investments. Bitcoin currently qualifies based on the market-cap rule in place.

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