The US state of Kansas is discussing a bill that would allow its public retirement fund to invest in Bitcoin exchange-traded products (ETPs).
On January 23, Kansas State Senator Craig Browser presented a draft bill to the Kansas State Senate, which, if approved, will allow the Kansas Public Employees Retirement System (KPERS) to invest in spot Bitcoin ETFs.
According to the bill, KPERS will be able to allocate a maximum of 10% of its funds to Bitcoin-backed products alongside traditional investments, such as stocks, bonds, real estate, and alternative assets like private equity and hedge funds, as part of a diversified portfolio.
However, the ETFs must be offered by investment companies registered in Kansas and traded on US-regulated exchanges.
Board of trustees to oversee fund
As a part of the bill, a board of trustees, usually appointed by the governor, legislative leaders, and representatives elected by KPERS members, will be responsible for overseeing the management and investment activities of the KPERS fund.
The board would ensure that all investments made are “solely in the interests of the members and beneficiaries of the system,” a section of Senate Bill 34 reads.
Aligning with this, the board would also decide whether to sell Bitcoin exchange-traded products if their value exceeds 10% of the fund, but only if such action is in the best interests of the beneficiaries.
Among other duties, the board will monitor the performance of the funds and provide yearly reviews of all investments.
These reviews will assess compliance with the fund’s objectives and recommend necessary adjustments to ensure alignment with fiduciary responsibilities.
The board will include a summary of these evaluations in its annual report to the governor.
The bill was officially introduced on January 16 and passed to the Committee on Financial Institutions and Insurance the following day, where it currently sits.
Before being signed into law by the governor, it must pass through both chambers of the Kansas Legislature, including committee reviews, debates, and votes, followed by approval from the House of Representatives.
State-backed Bitcoin investments gain momentum
Bill 34 comes not long after Kansas regulators debated legislation that would put a cap on political crypto donations.
It proposed limiting crypto political donations to $100 and mandated complete disclosure on the donor’s part, which critics argue invalidates the core ethos of the decentralised space.
The latest move comes as a welcome change for cryptocurrency enthusiasts in Kansas and marks a shift in the state’s approach and aligns it with the recent trend of other US states exploring Bitcoin exposure.
Besides the strategic Bitcoin reserve bill introduced by Senator Cynthia Lummis in August last year, other US states, like Oklahoma, New Hampshire, Ohio, Texas, Pennsylvania, and North Dakota, have moved to adopt a similar strategy at a state level.
USA SBR Update: In the US, now 12 States have introduced strategic #Bitcoin reserve legislation.
With the addition of Arizona (2023 GDP = $522.8Bn), the States that proposed SBR legislation total GDP $8.4Tn, 30.3% of total US GDP, and 7.9% of global GDP.
@invest_answers
Meanwhile, other US-based state pension funds that have made Bitcoin investments include the State of Michigan Retirement System, which allocated $6.6 million in ARK 21Shares’ ARKB spot Bitcoin ETF last year.
Elsewhere, the Virginia Pension Fund and Flordia State Pension fund have also mulled similar investments.
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