Connecticut Says No to Government Crypto Holdings
In a clear divergence from the growing pro-crypto trend, Connecticut has enacted a new law that bans state and local governments from engaging with cryptocurrencies in any official capacity. The bill, H.B. 7082, passed unanimously in both the House and Senate, and has now been codified as Public Act No. 25-66, according to the Connecticut General Assembly.
This sweeping legislation prohibits state agencies, municipalities, and other public entities from buying, holding, investing in, or even accepting cryptocurrency. It also bars the creation of any virtual currency reserve on behalf of the state.
The law states that public agencies may not “establish a reserve of virtual currency” or engage in “the purchase, holding, or investment in any crypto assets.”
Disclosure Rules and Age Protections for Crypto Firms
The new law doesn’t just restrict the state—it also targets crypto businesses operating within Connecticut. Any crypto firm engaged in money transmission must now provide “clear, conspicuous, and legible” disclosures in English, detailing all material risks associated with using crypto.
Additionally, the legislation introduces protections for minors, requiring platforms to verify legal guardianship for any users under the age of 18. These consumer-focused rules suggest that Connecticut is taking a conservative regulatory stance, framing crypto as a potentially risky financial tool requiring stronger oversight.
A Sharp Contrast to Pro-Bitcoin State Moves
While Connecticut is taking a restrictive approach, other U.S. states are heading in the opposite direction. Just last month, New Hampshire became the first state to pass a law establishing a strategic Bitcoin reserve, signaling confidence in Bitcoin as a state-level asset. Arizona quickly followed, introducing similar legislation to position the state for future crypto integration.
These states argue that Bitcoin can serve as a hedge against monetary debasement, and may eventually become a strategic treasury reserve akin to gold.
Connecticut’s legislation, however, reflects a different philosophy—one rooted in risk-aversion, especially at the governmental level.
Broader National Divide on Crypto Governance
The move by Connecticut illustrates the deepening divide in how U.S. states are approaching crypto regulation. While some are crafting laws to embrace blockchain technology, others are choosing to avoid exposure altogether, especially in the public sector.
The decision to enact Public Act No. 25-66 may reflect broader concerns about market volatility, regulatory uncertainty, and security risks. By prohibiting public sector involvement, Connecticut is effectively telling local agencies to steer clear of digital assets until further notice.
Whether this stance will be adopted by other states or reversed in the future remains to be seen—but for now, Connecticut stands firmly in the camp of crypto caution.
