Connecticut has drawn a clear line in the sand on digital asset investment by passing House Bill 7082, which formally prohibits the state from investing in cryptocurrencies such as Bitcoin.
The new law, enacted on Tuesday without a single opposing vote in either the House or Senate, also prevents the creation of a state-held Bitcoin reserve.
With the bill now in effect, Connecticut becomes the latest state to harden its stance on crypto amid a wave of divergent strategies emerging across the United States.
Crypto risk disclosures and money transmission laws get a revamp
As part of the newly adopted legislation, Connecticut has also revised its money transmission framework to reflect the evolving digital finance landscape.
Under the updated rules, crypto firms involved in money transmission must disclose all material risks associated with using crypto assets.
This move is designed to ensure that both individual and institutional users are fully aware of the speculative and volatile nature of digital currencies before engaging with these platforms.
In addition, the law introduces mandatory verification of legal guardians for users under the age of 18.
This provision seeks to add a layer of protection for minors interacting with crypto services, reflecting a growing push in various jurisdictions to implement age-specific safeguards.
The bill’s passage underscores a broader commitment by state lawmakers to shield public finances from the risks of highly volatile assets.
The law also signals that crypto regulations in the state will likely become more stringent going forward, especially in the areas of consumer protection and institutional oversight.
Connecticut breaks away from Bitcoin reserve trend
Over the past year, 27 US states have explored or proposed legislation to create strategic Bitcoin reserves, with the idea gaining traction in some quarters as a hedge against inflation or as a long-term investment.
Texas, New Hampshire, and Arizona have all passed state-level Bitcoin reserve measures, making Connecticut’s outright rejection a notable departure from the trend.
Texas, in particular, has been vocal about its strategy. With a sizeable budget surplus, it sees Bitcoin as a “forward-thinking” addition to a diversified investment portfolio.
The Texas Blockchain Council has promoted the idea that Bitcoin could serve as a modern-day store of value, aligning with the state’s investment philosophy.
The move has drawn attention from crypto advocates and policy watchers alike, especially as it diverges from the federal government’s more measured approach.
By contrast, Connecticut’s new law draws a definitive line against using taxpayer funds to bet on what some lawmakers continue to view as an unpredictable and unproven asset class.
This legislative stance may influence other risk-averse states still weighing their options amid volatile market behaviour.
Federal stance adds complexity to state-level divide
At the federal level, President Donald Trump recently signed an executive order aimed at establishing a strategic Bitcoin reserve for the United States.
However, the order has yet to be followed by detailed implementation plans, and traders have shown little enthusiasm so far.
While the move was meant to signal support for digital assets at a national level, the lack of clarity has left markets unmoved and raised questions about the coherence of US crypto policy.
Meanwhile, several states that initially showed interest in Bitcoin reserves have since walked back their proposals.
Florida, Wyoming, South Dakota, Pennsylvania, Montana, North Dakota, and Oklahoma have all shelved or abandoned similar crypto bills this year.
Their withdrawal reflects mounting concerns over Bitcoin’s price swings, regulatory uncertainty, and its suitability as a reserve asset within government portfolios.
Connecticut’s decision to legislate a ban rather than merely opt out may indicate a shift toward firmer policy boundaries in states with cautious fiscal outlooks.
As national and sub-national governments continue to diverge on digital asset strategy, investors, companies, and residents will need to navigate an increasingly fragmented regulatory map.
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