State Governments Dive Into Crypto Regulation Amid Bitcoin Reserve Launch

The creation of the US Strategic Bitcoin Reserve has ignited a wave of legislative and regulatory action across the nation. States like Massachusetts and Nebraska are exploring new measures to regulate and protect cryptocurrency users.

As state governments look to expand their involvement in the space—whether by adopting Bitcoin as a store of value or adopting blockchain technology—these regulatory moves signal the growing influence of governments in the crypto space.

US Strategic Bitcoin Reserve Launch Prompts Enhanced Crypto Regulations

Last week, President Donald Trump signed an executive order to establish a US Strategic Bitcoin Reserve and a digital asset stockpile. The move marked a significant shift in the federal government’s stance toward cryptocurrency.

Notably, at the state level, at least 18 states are pursuing legislation to create a Bitcoin reserve. Beyond this, state governments have started exploring crypto laws to regulate the industry and protect consumers.

In Nebraska, Governor Jim Pillen signed the Controllable Electronic Record Fraud Prevention Act (LB609) into law. This bill regulates transactions involving digital assets like cryptocurrencies. 

It mandates that operators of controllable electronic record kiosks be licensed and disclose risks, fees, and fraud warnings to customers. LB609 also requires the use of blockchain analytics to detect fraud and sets refund policies for customers defrauded within 30 days.

“Cryptocurrency is an important, emerging industry, and we’ve been working hard to build Nebraska into a cryptocurrency leader,” Governor Pillen stated.

He further emphasized that a key aspect of these efforts is ensuring protections to prevent criminals from exploiting Nebraskans.

Meanwhile, in Massachusetts, State Representative Kate Lipper-Garabedian has proposed legislation to establish a commission to explore the impact of blockchain technology and cryptocurrency on the state. 

The H88 bill is titled “An Act establishing a special commission on blockchain and cryptocurrency.”

“A special commission is hereby established for the purposes of making an investigation relative to blockchain technology to develop a master plan of recommendations for fostering the appropriate expansion of blockchain technology in the Commonwealth,” the bill reads.

It outlines the formation of a commission comprising 25 members, including lawmakers, business representatives, and blockchain experts. Key areas of focus include evaluating the feasibility and risks of blockchain adoption in government and business.

It will also assess the impact of cryptocurrency on state revenues and taxation and explore the possibility of regulating the energy consumption linked to cryptocurrency mining. Another important focus will be consumer protection and enhancing technological literacy around blockchain and cryptocurrency. Lastly, the commission will identify best practices to ensure that blockchain technology can benefit the state and its residents.

Massachusetts is also considering a separate bill to establish its Strategic Bitcoin Reserve. This would allow the State Treasurer to invest up to 10% of the funds in the Commonwealth Stabilization Fund into Bitcoin or other digital assets. In contrast, Nebraska currently has no such legislation.

As legislative efforts gain traction, governments are increasingly collaborating with cryptocurrency exchanges to navigate this new frontier. Coinbase CEO Brian Armstrong recently highlighted the increasing engagement between crypto firms and government bodies.

“In the wake of the US Strategic Bitcoin Reserve launching, we’re seeing many more take an interest,” Armstrong posted.

He shared that the company has partnered with 145 government entities in the US, covering federal, state, and local levels. Additionally, it works with 29 international government bodies.