Kansas Advances Bitcoin Reserve Legislation as White House Pushes for Bipartisan Crypto Framework

Kansas Proposes State Bitcoin Reserve Framework

Kansas has introduced legislation that would establish a state-managed Bitcoin and Digital Assets Reserve Fund, becoming the latest U.S. state to explore incorporating cryptocurrencies into public finance strategies. State Senator Craig Bowser introduced the bill, which proposes amendments to Kansas' unclaimed property laws to explicitly recognize digital assets and create a framework for their custody and management ^[3].

The legislation would grant oversight authority to the Kansas State Treasurer and allow the state to acquire, hold, and manage digital assets through its treasury ^[2]. Under the proposal, unclaimed digital assets would be transferred to state custody after three years of inactivity following undeliverable communication to the owner ^[3].

A key provision distinguishes Bitcoin from other cryptocurrencies by prohibiting BTC from being deposited into the state's general fund. The bill treats Bitcoin as a long-term reserve asset rather than a short-term revenue source, while directing 10% of non-bitcoin digital asset deposits into the general fund, subject to legislative appropriations ^[3].

The legislation also permits the state's designated custodian to stake digital assets and receive airdrops, with any rewards generated after three years being transferred into the reserve fund, creating a mechanism for gradual asset accumulation ^[3].

Federal Crypto Regulation Faces Partisan Divide

While states advance their own Bitcoin initiatives, federal cryptocurrency regulation remains stalled amid partisan disagreements. White House crypto adviser Patrick Witt has urged Democrats on the Senate Agriculture Committee to support a new crypto market structure bill ahead of its January 27 markup ^[1].

Witt emphasized that the Senate bill shares more than 80% similarity with the House's CLARITY Act, which previously gained support from 17 out of 24 Democrats on the Agriculture Committee and nearly 40% of House Democrats overall, including Nancy Pelosi, Pete Aguilar, and Ted Lieu ^[1].

Despite these similarities, Senate Agriculture Committee Chairman John Boozman confirmed that no Democrats have publicly supported the bill so far. Senator Cory Booker, who led Democratic negotiations for months, has not endorsed the legislation, though his team indicated he will continue working with Boozman ^[1].

Witt stated that the revised bill incorporates changes requested by Booker to increase its appeal to Democrats, and he praised Boozman for maintaining transparency during negotiations ^[1].

Mixed Industry Response to Federal Legislation

The crypto industry has offered varied reactions to the Senate bill. Coinbase Chief Legal Officer Paul Grewal characterized the bill as a good starting point but noted it still requires additional work. Ji Hun Kim of the Crypto Council for Innovation described the legislation as an important step toward clearer regulatory frameworks and enhanced consumer protection ^[1].

However, concerns remain about the bill's complexity and implementation timeline. Bart Mol of the Satoshi Radio Podcast warned that the bill's complexity could lead to delays in its passage ^[1].

President Donald Trump recently expressed hope to sign crypto market structure legislation soon, though no clear timeline exists for when any bill might become law ^[1]. A separate crypto bill from the Senate Banking Committee is also experiencing delays, with a markup unlikely until late next month ^[1].

Growing State-Level Bitcoin Adoption

Kansas joins an expanding roster of U.S. states exploring Bitcoin reserves as part of their financial strategies. Texas established a Bitcoin exposure worth ten million dollars on November 20, allocating five million dollars to the BlackRock ETF IBIT, with an additional five million dollars designated for directly held, self-custodied Bitcoin purchases ^[2].

The Kansas legislation represents a broader trend of states examining whether Bitcoin could serve as an inflation hedge, diversification tool, or means to modernize public finance infrastructure ^[3].