HB 487

2025

A bill to be entitled

An act relating to investments of public funds in Bitcoin; creating s. 17.573, F.S.; providing definitions; authorizing the Chief Financial Officer to make investments in Bitcoin; authorizing the Chief Financial Officer to invest money from certain public funds; providing limits to such investments; providing requirements for holding acquired Bitcoin; authorizing the Chief Financial Officer and other parties to loan Bitcoin under specified circumstances; requiring rules governing such loans; requiring taxes and fees paid in Bitcoin to be transferred to the General Revenue Fund; requiring the General Revenue Fund to reimburse designated funds in United States currency for such payments; amending ss. 17.57 and 17.61, F.S.; conforming provisions to changes made by the act; amending s. 121.151, F.S.; authorizing the Trustees of the State Board of Administration to invest and reinvest available funds of the System Trust Fund in Bitcoin; providing requirements for such investments; providing definitions; amending s. 280.03, F.S.; providing that investments of public funds in Bitcoin are exempt from certain security requirements; providing an effective date.

WHEREAS, inflation has eroded the purchasing power of assets held in state funds managed by the Chief Financial Officer and this erosion diminishes the value of the state's reserves, affecting the financial stability and economic security of this state, its taxpayers, and its residents, and

WHEREAS, although this state does not have direct control over the national money supply or the policies that influence inflation, it has a responsibility to safeguard Florida's financial resources against the impacts of inflation and other economic uncertainties, and

WHEREAS, throughout its history, Bitcoin has greatly risen in value and is becoming more widely accepted as an international medium of exchange, and countries around the world, including the United States, hold Bitcoin within their treasury departments, and

WHEREAS, Bitcoin is viewed as a hedge against inflation by sovereign nations and prominent investment advisors, including BlackRock, Fidelity, and Franklin Templeton, and

WHEREAS, this state should have access to tools such as Bitcoin to protect against inflation, NOW, THEREFORE,

Be It Enacted by the Legislature of the State of Florida:

Section 1. Section 17.573, Florida Statutes, is created to read:

17.573 Investments in Bitcoin.—

(1) As used in this section, the term:

(a) "Bitcoin" means the decentralized digital currency launched in 2009 which allows online payments to be sent directly from one party to another without going through a financial institution. The term includes the digital asset underlying Bitcoin exchange-traded products regulated by the Securities and Exchange Commission.

(b) "Exchange-traded product" means a financial instrument approved by the Securities and Exchange Commission, the Commodity Futures Trading Commission, or the Department of Financial Services which is traded on a national stock exchange and derives its value from an underlying pool of assets, including stocks, bonds, commodities, and indexes.

(c) "Private key" means a unique element of cryptographic data used for signing transactions on a blockchain, known only to the owner.

(d) "Secure custody solution" means a technological product or blended product and service meeting all of the following criteria:

1. The cryptographic private keys are:

a. Exclusively known by and accessible to the governmental entity.

b. Contained within an encrypted environment and accessible only via end-to-end encrypted channels.

c. Never stored on or accessible via a smartphone.

2. The hardware containing the cryptographic private keys is maintained in at least two geographically diverse, secure data centers.

3. A multiparty governance structure for authorizing transactions is implemented, user access control is enforced, and all user-initiated actions are logged.

4. The provider of the technological product or blended product and service has implemented a disaster recovery protocol ensuring access to assets if the provider becomes unavailable.

5. The technological product or blended product and service undergoes regular code audits and penetration testing, with identified vulnerabilities promptly addressed.

(e) "Qualified custodian" means a federal bank, a Florida state-chartered bank, a trust company, a special-purpose depository institution, or a company regulated by this state which provides custody services for Bitcoin as part of an approved exchange-traded product.

(2) The Chief Financial Officer may:

(a) Include Bitcoin and potentially other digital assets to serve as stores of value and provide a hedge against inflation, thereby protecting the purchasing power of state funds.

(b) Ensure that the investment strategies employed by the Chief Financial Officer align with the goal of enhancing this state's economic security and financial resilience.

(c) Maintain flexibility in investment decisions to respond to changing economic conditions and emerging opportunities that may offer better protection or returns on state funds.

(3)(a)1. The Chief Financial Officer may invest money in Bitcoin from the following funds:

a. The General Revenue Fund.

b. The Budget Stabilization Fund.

c. All the trust funds and all agency funds of each state agency, and of the judicial branch, as defined in s. 216.011.

d. Funds of any board, association, or entity created by the State Constitution or by law upon request of the board, association, or entity.

e. Any other state fund deemed appropriate by the Legislature.

2. The amount of public funds that the Chief Financial Officer may invest in Bitcoin may not exceed 10 percent of the total funds in any account.

(b)1. The Bitcoin acquired under paragraph (a) shall be held:

a. Directly by the Chief Financial Officer through the use of a secure custody solution;

b. On behalf of this state by a qualified custodian; or

c. In the form of an exchange-traded product issued by an investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended.

2. The Chief Financial Officer, and other parties with the permission of the Chief Financial Officer, may loan the Bitcoin in state funds to generate additional returns for this state if such loans do not increase financial risk. The Chief Financial Officer shall adopt rules governing such loans.

(4) Taxes or fees paid to this state in Bitcoin shall be transferred to the General Revenue Fund. The General Revenue Fund shall reimburse the designated fund for the value of the Bitcoin payment in United States currency for such taxes or fees.

Section 2. Paragraph (b) of subsection (1) and subsections (2) and (7) of section 17.57, Florida Statutes, are amended to read:

17.57 Deposits and investments of state money.—

(1)

(b) The Chief Financial Officer, or other parties with the permission of the Chief Financial Officer, shall:

1. Deposit the money of the state or any money in the State Treasury in such qualified public depositories of the state as will offer satisfactory collateral security for such deposits, pursuant to chapter 280; or

2. Invest the money of the state or any money in the State Treasury in Bitcoin pursuant to s. 17.573 and deposit the rest of the money of the state and the State Treasury in the qualified public depositories described in subparagraph 1.

It is the duty of the Chief Financial Officer, consistent with the cash requirements of the state, to keep such money fully invested or deposited as provided herein in order that the state may realize maximum earnings and benefits. Nothing in this section shall preclude credit unions designated as public depositories from participation.

(2)(a) The Chief Financial Officer shall make funds available to meet the disbursement needs of the state. Funds which are not needed for this purpose shall be:

1. Placed in qualified public depositories that will pay rates established by the Chief Financial Officer at levels not less than the prevailing rate for United States Treasury securities with a corresponding maturity; or

2. Invested in Bitcoin pursuant to s. 17.573, and the rest of the funds placed in the qualified public depositories described in subparagraph 1.

(b) In the event money is available for interest-bearing time deposits or savings accounts as provided herein and qualified public depositories are unwilling to accept such money and pay thereon the rates established above, then such money which qualified public depositories are unwilling to accept shall be invested in:

1. ~~(a)~~ Direct United States Treasury obligations.

2. ~~(b)~~ Obligations of the Federal Farm Credit Banks.

3. ~~(c)~~ Obligations of the Federal Home Loan Bank and its district banks.

4. ~~(d)~~ Obligations of the Federal Home Loan Mortgage Corporation, including participation certificates.

5. ~~(e)~~ Obligations guaranteed by the Government National Mortgage Association.

6. ~~(f)~~ Obligations of the Federal National Mortgage Association.

7. ~~(g)~~ Commercial paper of prime quality of the highest letter and numerical rating as provided for by at least one nationally recognized rating service.

8. ~~(h)~~ Time drafts or bills of exchange drawn on and accepted by a commercial bank, otherwise known as "bankers acceptances," which are accepted by a member bank of the Federal Reserve System having total deposits of not less than $400 million or which are accepted by a commercial bank which is not a member of the Federal Reserve System with deposits of not less than $400 million and which is licensed by a state government or the Federal Government, and whose senior debt issues are rated in one of the two highest rating categories by a nationally recognized rating service and which are held in custody by a domestic bank which is a member of the Federal Reserve System.

9. ~~(i)~~ Corporate obligations or corporate master notes of any corporation within the United States, if the long-term obligations of such corporation are rated by at least two nationally recognized rating services in any one of the four highest classifications. However, if such obligations are rated by only one nationally recognized rating service, then the obligations shall be rated in any one of the two highest classifications.

10. ~~(j)~~ Obligations of the Student Loan Marketing Association.

11. ~~(k)~~ Obligations of the Resolution Funding Corporation.

12. ~~(l)~~ Mortgage-backed securities of the highest credit quality.

13. ~~(m)~~ Asset-backed securities rated by at least two nationally recognized rating services in any one of the three highest classifications. However, if such obligations are rated by only one nationally recognized rating service, the obligations must be rated in any one of the two highest classifications.

14. ~~(n)~~ Any obligations not previously listed which are guaranteed as to principal and interest by the full faith and credit of the United States Government or are obligations of United States agencies or instrumentalities which are rated in the highest category by a nationally recognized rating service.

15. ~~(o)~~ Commingled no-load investment funds or no-load mutual funds in which all securities held by the funds are authorized in this subsection.

16. ~~(p)~~ Money market mutual funds as defined and regulated by the Securities and Exchange Commission.

17. ~~(q)~~ Obligations of state and local governments rated in any of the four highest classifications by at least two nationally recognized rating services. However, if such obligations are rated by only one nationally recognized rating service, then the obligations shall be rated in any one of the two highest classifications.

18. ~~(r)~~ Covered put and call options on investment instruments authorized in this subsection for the purpose of hedging transactions by investment managers to mitigate risk or to facilitate portfolio management.

19. ~~(s)~~ Negotiable certificates of deposit issued by financial institutions whose long-term debt is rated in one of the three highest categories by at least two nationally recognized rating services, the investment in which shall not be prohibited by any provision of chapter 280.

20. ~~(t)~~ Foreign bonds denominated in United States dollars and registered with the Securities and Exchange Commission for sale in the United States, if the long-term obligations of such issuers are rated by at least two nationally recognized rating services in any one of the four highest classifications. However, if such obligations are rated by only one nationally recognized rating service, the obligations shall be rated in any one of the two highest classifications.

21. ~~(u)~~ Convertible debt obligations of any corporation domiciled within the United States, if the convertible debt issue is rated by at least two nationally recognized rating services in any one of the four highest classifications. However, if such obligations are rated by only one nationally recognized rating service, then the obligations shall be rated in any one of the two highest classifications.

22. ~~(v)~~ Securities not otherwise described in this subsection. However, not more than 3 percent of the funds under the control of the Chief Financial Officer shall be invested in securities described in this paragraph.

23. ~~(w)~~ Derivatives of investment instruments authorized in subparagraphs 1.-22 ~~paragraphs (a)-(v)~~.

24. ~~(x)~~ Futures and options on futures, provided the instruments for such purpose are traded on a securities exchange or board of trade regulated by the Securities and Exchange Commission or the Commodity Futures Trading Commission.

25. Bitcoin pursuant to s. 17.573.

These investments may be in varying maturities and may be in book-entry form. Investments made pursuant to this subsection may be under repurchase agreement or reverse repurchase agreement. The Chief Financial Officer may hire registered investment advisers and other consultants to assist in investment management and to pay fees directly from investment earnings. Investment securities, proprietary investment services related to contracts, performance evaluation services, investment-related equipment or software used directly to assist investment trading or investment accounting operations including bond calculators, telerates, Bloombergs, special program calculators, intercom systems, and software used in accounting, communications, and trading, and advisory and consulting contracts made under this section are exempt from the provisions of chapter 287.

(7) In addition to the deposits authorized under this section and notwithstanding any other provisions of law, funds that are not needed to meet the disbursement needs of the state may be deposited, or invested under s. 17.573 and the rest of the funds which is not invested under s. 17.573 may be deposited, by the Chief Financial Officer in accordance with the following conditions for fund deposits:

(a) The funds are initially deposited in a qualified public depository, as defined in s. 280.02, selected by the Chief Financial Officer.

(b) The selected depository arranges for depositing the funds in financial deposit instruments insured by:

1. The Federal Deposit Insurance Corporation in one or more federally insured banks or savings and loan associations, wherever located, for the account of the state.

2. For credit unions designated as qualified public depositories, the National Credit Union Share Insurance Fund.

(c) The full amount of the principal and accrued interest of each financial deposit instrument is insured by the Federal Deposit Insurance Corporation or, for credit unions designated as qualified public depositories, the National Credit Union Share Insurance Fund.

(d) The selected depository acts as custodian for the state with respect to each financial deposit instrument issued for its account.

Section 3. Subsection (1) of section 17.61, Florida Statutes, is amended to read:

17.61 Chief Financial Officer; powers and duties in the investment of certain funds.—

(1) The Chief Financial Officer shall invest all general revenue funds and all the trust funds and all agency funds of each state agency, and of the judicial branch, as defined in s. 216.011, and may, upon request, invest funds of any board, association, or entity created by the State Constitution or by law, except for the funds required to be invested pursuant to ss. 215.44-215.53, by the procedure and in the authorized securities or in Bitcoin prescribed in s. 17.57; for this purpose, the Chief Financial Officer may open and maintain one or more demand and safekeeping accounts in any bank or savings association for the investment and reinvestment and the purchase, sale, and exchange of funds and securities in the accounts. Funds in such accounts used solely for investments and reinvestments shall be considered investment funds and not funds on deposit, and such funds shall be exempt from the provisions of chapter 280. In addition, the securities or investments purchased or held under the provisions of this section and s. 17.57 may be loaned to securities dealers and banks and may be registered by the Chief Financial Officer in the name of a third-party nominee in order to facilitate such loans, provided the loan is collateralized by cash or United States government securities having a market value of at least 100 percent of the market value of the securities loaned. The Chief Financial Officer shall keep a separate account, designated by name and number, of each fund. Individual transactions and totals of all investments, or the share belonging to each fund, shall be recorded in the accounts.

Section 4. Section 121.151, Florida Statutes, is amended to read:

121.151 Investments.—

(1) The Board of Administration, created by authority of the State Constitution, shall invest and reinvest available funds of the System Trust Fund in accordance with the provisions of ss. 215.44-215.53.

(2)(a) The Board of Administration may also invest and reinvest available funds of the System Trust Fund in Bitcoin. The amount of funds that the board may invest and reinvest in Bitcoin may not exceed 10 percent of the total funds.

(b) The Bitcoin acquired under paragraph (a) shall be held:

1. Directly by the board through the use of a secure custody solution;

2. On behalf of the board by a qualified custodian; or

3. In the form of an exchange-traded product issued by an investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended.

(c) As used in this subsection, the terms "Bitcoin," "exchange-traded product," "secure custody solution," and "qualified custodian" have the same meanings as in s. 17.573(1).

Section 5. Paragraph (f) of subsection (3) of section 280.03, Florida Statutes, is amended to read:

280.03 Public deposits to be secured; prohibitions; exemptions.—

(3) The following are exempt from the requirements of, and protection under, this chapter:

(f) Public deposits and investments made in accordance with s. 17.57(7), s. 17.573, or s. 218.415(23).

Section 6. This act shall take effect July 1, 2025.

Florida H 487

Investment of Public Funds in Bitcoin

2025 FL H 487

Florida H 487

Investment of Public Funds in Bitcoin

2025 FL H 487