Alabama should establish Bitcoin reserve, says state auditor

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As a seasoned investor with a keen interest in cryptocurrency, I find Andrew Sorrell’s endorsement of a state Bitcoin reserve to be not only forward-thinking but also potentially beneficial for Alabama. Having witnessed the meteoric rise and resilience of cryptocurrencies over the past decade, I can confidently say that crypto is indeed here to stay.

In an interview with a local news outlet, Alabama’s State Auditor, Andrew Sorrell, voiced his support for creating a state-owned Bitcoin reserve.

The many pros of crypto

Previously, Sorrell served as a state legislator and has consistently advocated for cryptocurrencies. In a conversation with 1819 News, he expressed that adopting cryptocurrencies could draw businesses to the state and bolster the financial security of the region.

As a seasoned crypto investor, I firmly believe that digital currencies are not just passing trends but a significant part of our financial future. The battle for which regions will reap the benefits of this technology is now underway.

“The states that are first to adopt a tax and regulatory framework that are friendly to crypto will attract business and investment.”

In the U.S., the availability of Bitcoin (BTC) and Ether (ETH) exchange-traded funds (ETFs) now allows for state investments in these cryptocurrencies, similar to buying shares via a brokerage. While traditional stocks might seem like a safer bet, cryptocurrencies offer a unique value proposition.

“It [cryptocurrency] is also the most rapidly growing asset class (averaging an astounding 55% a year for the last 15 years). […] Investing in Treasuries and bonds certainly has its place, but earning a 4% yield while inflation is 2.7% is barely breaking even.”

According to Sorrell, the proposed Alabama Bitcoin reserve should follow the structure of the Federal Reserve system, as hinted by President-elect Donald Trump. Given that Bitcoin is currently experiencing a bull market, he recommends gradually accumulating the reserve through monthly purchases over a two-year period. He also emphasizes the importance of diversifying away from the US dollar to ensure financial security.

“What happens if the dollar ceases to be the reserve currency of the world? What happens if inflation runs 8% again like it did during the post-pandemic era? Bitcoin’s value is unaffected by what happens to the U.S. dollar.”

Alabama making slow progress on crypto

Alabama hosts numerous politicans who are supportive of cryptocurrencies, both at the state and national level. Among them, US Senator Tommy Tuberville stands out as one of the most engaged advocates for cryptocurrency on the federal stage.

In May, the state enacted legislation to establish the Alabama Crypto and Blockchain Research Commission. This commission is tasked with examining issues related to cryptocurrency regulations, taxation, mining, and other pertinent questions. Once they complete their study and submit a report to the Legislature in 2026, the commission will be disbanded.

This year, a bill sponsored by members from both political parties didn’t get passed. The bill aimed to prevent the state from imposing restrictions on digital asset storage, mining operations, or enacting extra taxes on these assets. Furthermore, it sought to exempt digital asset mining, staking, and node operation from being classified as a security or money transmission activity.

 

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2024-12-11 20:23