Another U.S. State Proposes Bitcoin and Digital Assets Reserve

Source: Coindoo Original Title: Another U.S. State Proposes Bitcoin and Digital Assets Reserve Original Link: Kansas lawmakers are testing how far state governments can go in adapting old financial rules to a crypto-native world, without turning public treasuries into speculative investors.

A newly introduced bill in the state Senate would quietly place Bitcoin and other digital assets inside Kansas’ financial architecture – not by authorizing purchases, but by redefining how the state handles crypto it already controls. The proposal, Senate Bill 352, was introduced on January 21 by state Senator Craig Bowser and centers on rewriting unclaimed property law for the digital age.

Key Takeaways

• Kansas lawmakers introduced a bill to create a Bitcoin and digital assets reserve managed by the state treasury.
• The proposal focuses on digital assets classified as unclaimed property, not on state purchases of crypto.
• Staking rewards and airdrops from abandoned assets could be retained by the state under the new framework.

From Lost Property to State-Controlled Crypto

Rather than framing the initiative as a Bitcoin reserve in the traditional sense, the bill treats digital assets as a modern form of unclaimed property. Cryptocurrencies that have gone untouched for years – with no owner activity or communication – would fall under the same legal umbrella as dormant bank accounts or forgotten securities.

Once classified as abandoned, those assets would be transferred into a newly created Bitcoin and digital assets reserve within the Kansas state treasury. The fund would be overseen by the state treasurer and would exist separately from the general fund, insulating the assets from being automatically spent or liquidated.

What makes the proposal notable is how it handles crypto-specific behavior. Unlike traditional assets, digital tokens can generate new value through mechanisms like staking or airdrops. The bill explicitly allows the state to receive and retain those rewards once ownership claims expire, acknowledging that crypto does not remain static while in custody.

How the State Would Benefit Financially

Although Bitcoin itself would stay locked inside the reserve, the bill does carve out a limited revenue stream for Kansas. Ten percent of each digital asset deposit would be directed to the state’s general fund, subject to legislative approval, while the remaining portion stays in the reserve.

Any staking rewards or airdropped tokens earned after assets are deemed fully abandoned would belong to the state. By laying out these rules in statute, lawmakers appear intent on avoiding future disputes over whether such rewards constitute new property or part of the original asset.

Legal Definitions Catch Up With Technology

Much of Senate Bill 352 is less about crypto enthusiasm and more about legal housekeeping. The proposal introduces formal definitions for terms like digital asset, staking, and airdrop, giving Kansas courts and regulators a clearer framework for dealing with crypto-related cases.

Under the bill, most digital assets would be considered abandoned after three years of inactivity, mirroring existing timelines for traditional unclaimed property. If those assets are transferred to a state-approved custodian and remain unclaimed, any additional value generated over time would flow into the reserve fund.

Kansas Joins a Growing State-Level Experiment

The proposal places Kansas among a small but growing group of US states attempting to normalize crypto within public finance systems. States such as New Hampshire and Arizona have already taken steps allowing treasurers to hold or manage digital assets under certain conditions.

Kansas’ approach is more conservative. It does not permit the state to buy Bitcoin or trade digital assets proactively. Instead, it focuses on custody, legal clarity, and limited monetization of assets that enter state hands through existing processes.

The legislation has not yet been voted into law, but it reflects a broader shift in how state governments are approaching crypto – not as a novelty, but as something that needs rules, definitions, and guardrails similar to any other financial instrument.