Bill seeking to allow NM investments in Bitcoin tabled

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A Senate committee Thursday voted to table legislation that encouraged state fund managers to invest savings into Bitcoin, the volatile digital currency that has dropped 20% in value since Jan. 30.

Newly elected state Sen. Ant Thornton (R-East Mountains) sponsored Senate Bill 275, the Strategic Bitcoin Reserve Act, which sought to allow state investment agencies to invest up to 5% of their assets in Bitcoin. For the state’s Land Grant Permanent Fund, currently estimated to hold $31.9 billion, that would mean up to $1.6 billion invested in Bitcoin.

Thornton’s bill is model legislation that the Satoshi Action Fund produced in partnership with Thornton, said Eric Peterson, the fund’s policy director, at the Thursday hearing before the Senate Tax, Business and Transportation Committee. 

Thornton noted that multiple states invest in Bitcoin, and other states are planning to do so, including Arizona. During the 2024 legislative session, at least 35 states introduced or had pending legislation related to cryptocurrency, digital or virtual currencies, according to a National Conference of State Legislators report.

Some states, like Indiana, Georgia and South Dakota, ban their government agencies from using digital currencies. Other states permit the technology, but may be placing frameworks around how it’s used, like in New Hampshire, which has a law to establish regulations and a framework for digital currencies, and Connecticut, which put more requirements on who may deal with digital currency transactions.

“This legislation grants, does not compel, certain New Mexico public funds, especially those with longer investment horizons, the option to diversify into Bitcoin by modernizing our investment toolkit,” Thornton said. 

His proposal received a lukewarm reception at its first committee meeting Thursday. Lawmakers, citing a fiscal impact report, noted that investment agencies are already free to invest in Bitcoin. They’ve just chosen not to. 

The bill also would require that fees and taxes paid in Bitcoin be transferred to the state’s general fund within 60 days, but the state does not currently accept taxes to be paid with the digital currency. That also gave senators pause.  

State Treasurer Laura Montoya also spoke briefly at the meeting, saying she would need resources she doesn’t have to prepare for a transition to Bitcoin by July 1, when the law goes into effect. 

The committee voted to table over Republican opposition. Committee Chair Sen. Carrie Hamblen (D-Las Cruces) offered Thornton her apologies. He said he would reintroduce the bill at future sessions.

“I was hoping that this legislation struck the right balance between innovation and prudence. I believe this is the right investment tool for the future of New Mexico,” he said. “As you can tell, there is a race going on between other states. And I do believe that in the future, nation-states are going to be taking this on as well.”

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