Connecticut Governor Ned Lamont has signed House Bill 7082 into law, officially regulating the “Bitcoin Reserve Ban” in the state. Now, Connecticut is prohibited from accepting, holding, or investing in digital assets. This marks a contrast from the US trend in the evolution of virtual digital currency.
Connecticut Officially Bans Bitcoin Reserve
The legislation titled “An Act Concerning the Prohibition of State Government Entities from Holding or Investing in Cryptocurrencies” was initially introduced in response to growing concerns regarding volatilities and uncertainties in digital currencies in February 2025 before finalizing the enactment on June 30.
The enactment provides clarity that the state prioritizes risk mitigation and consumer protection over speculative investment.
Legislation on the Prohibition of Cryptocurrency
Settling the long-standing debate, Connecticut finalizes the ban on cryptocurrency and other virtual currencies to prevent the state from associated risks. The law ensures that Connecticut remains protected from the threats associated with the digital assets market.
“Neither the state nor any political subdivision of the state shall (1) accept or require payment in the form of virtual currency for an amount due to the state or the political subdivision, or (2) purchase, hold, invest in or establish a reserve of virtual currency,” HB 7082 reads.
Key Highlights of Crypto Ban Legislation
- It introduces comprehensive consumer protection measures, ensuring that businesses engaging in virtual asset transactions disclose potential risks.
- Provisions aimed at enhancing transparency and security in virtual currency transactions.
- Crypto businesses must disclose critical risks– irreversibility of transactions, absence of government insurance, and potential for unrecoverable losses.
- Introduced new daily transaction limits for virtual currency kiosk – $2,000 for new customers and $5,000 for existing ones.
- Virtual currency kiosk operators face stricter regulations– provide live customer support and employ a full-time compliance officer to oversee adherence.
The enactment sets Connecticut apart from other US states like Texas, Arizona, and New Hampshire, which continue to adopt digital currency reserves. As the bill contrasts with the majority of US states, it has been met with mixed reactions from industry experts and policymakers. Some argue that the bill is crucial for precautions, while others say it stifles innovation in the nation.
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FAQs
Connecticut’s ban on state entities holding or investing in crypto contrasts sharply with states like Texas, Arizona, and New Hampshire, which are moving to establish digital asset reserves. This highlights a growing divergence in state-level approaches, with Connecticut prioritizing risk aversion while others embrace crypto innovation.
While the ban aims to protect public funds from volatility, critics argue it could stifle innovation within Connecticut’s digital economy. It might deter blockchain-based startups and investment, potentially causing them to gravitate towards more crypto-friendly states that encourage digital asset development and integration.
Connecticut’s cautious approach could influence other risk-averse legislatures to consider similar bans or stricter regulations on state crypto involvement. It adds to the ongoing national debate about crypto’s role in public finance, potentially encouraging a more conservative stance in states prioritizing financial stability over speculative gains.
