Kansas has emerged as the latest U.S. state to investigate a formal role for Bitcoin and digital assets within public finance, as lawmakers have introduced legislation aimed at creating a state-managed Bitcoin and Digital Assets Reserve Fund.
The bill, proposed by State Senator Craig Bowser, seeks to amend Kansas’ unclaimed property laws to explicitly include digital assets, such as cryptocurrencies and virtual currencies. This legislation will establish a framework for their custody, management, and potential sale.
Should the bill be enacted, the Kansas State Treasurer would oversee the reserve’s operations.
According to the proposal, unclaimed digital assets, including Bitcoin, would be transitioned to state management after three years of inactivity, following undeliverable written or electronic communication with the owner.
While the term ‘unclaimed digital asset’ may have some ambiguity, the bill seemingly pertains only to custodial digital assets managed by legally defined “holders,” such as exchanges, banks, trust companies, and other licensed custodians, rather than self-custodied wallets.
The legislation stipulates that the three-year abandonment period commences only after written or electronic communication to the owner is returned as undeliverable; this clock would pause immediately should the owner exhibit any signs of activity, such as logging in or accessing another account with the same custodian.
In contrast to many traditional forms of unclaimed property, the bill allows these assets to be delivered and retained in their original digital format, rather than being liquidated immediately.
The proposal further permits the state’s designated qualified custodian to stake digital assets and receive airdrops, guided by the treasurer’s directives.
Any staking rewards or airdropped assets generated after three years would be allocated to the BTC and Digital Assets Reserve Fund, thereby creating a mechanism for the state to accumulate digital assets over time.
The overarching objective is to minimize market disruption while establishing clearer guidelines for the management of state-held digital assets.
If enacted, this legislation would position Kansas among a growing number of U.S. states that are exploring the potential integration of Bitcoin and other digital assets into their long-term financial and custodial strategies.
In recent years, legislative bodies across the country have engaged in discussions about the role of Bitcoin as a potential hedge against inflation, a tool for diversification, and a means to modernize public finance infrastructure.
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