Alabama lawmakers introduce legislation to expand, diversify state investment options

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April 9, 2025

Two Alabama lawmakers are leading an effort to bring digital assets like Bitcoin into the state’s investment portfolio through new legislation introduced last week in the House and Senate.

HB482, sponsored by State Rep. Mike Shaw (R-Hoover), and SB284, sponsored by State Sen. Will Barfoot (R-Pike Road), would authorize the state treasurer to invest up to 10% of certain public funds in approved digital assets, including cryptocurrency and exchange-traded product linked to blockchain technology.

The legislation lays the groundwork for the creation of a digital asset reserve in Alabama — a concept that has garnered attention in recent months as financial markets continue to evolve and states explore innovative ways to manage long-term investments.

“The establishment of a digital asset reserve in Alabama is an exciting possibility,” Shaw said. “With the introduction of these bills, the Legislature has taken a first step in that direction. In the weeks ahead, I look forward to working with Treasurer Boozer and other key stakeholders on this effort.”

Barfoot, who serves as the Chairman of the Senate Judiciary committee, said the state needs to be proactive in evaluating emerging financial tools.

“Digital assets, including Bitcoin, are gaining more adoption in financial markets,” Barfoot said. “As this trend continues, states are beginning to examine the benefit of targeted investments in these assets. I believe now is the time to have those same conversations in Alabama.”

The proposed legislation outlines strict guidelines for the custody and management of digital assets, requiring that investments either be held through a secure custody solution, by a qualified custodian, or via an exchange-traded product. All digital asset investments would be limited to those either registered as ETPs or with a minimum average market capitalization of $750 billion over the preceding 12 months.

The state treasurer would also be permitted to loan out digital assets to generate additional returns, so long as doing so does not increase financial risk to the fund. Any rules necessary to implement the act would be adopted by the Treasurer’s Office.

The bills follow increased public discussion around cryptocurrency policy in Alabama. State Auditor Andrew Sorrell has repeatedly called for the establishment of a strategic Bitcoin reserve, citing long-term value and national trends.

If passed, the Alabama legislation would take effect October 1, 2025. Both bills have been assigned to committees for further consideration.

Grace Heim is a state and political reporter for Yellowhammer News. You can follow her on X @graceeheim or email her at [email protected].