Connecticut Blocks State Crypto Reserve While Other U.S. States Push Forward

TL;DR:

• Connecticut becomes the first U.S. state to ban its government from holding or investing in crypto.
  
• The bill also prohibits crypto payment acceptance and tightens state money-transmitter rules.
  
• This decision bucks a growing national trend, as states like New Hampshire, Texas, and Arizona move forward with crypto reserve plans.
  
• The ban comes despite President Trump’s federal push to establish a bitcoin reserve.
  
• Advocates like Dennis Porter remain hopeful Connecticut will reconsider in the future.
  

Connecticut Legislators Block Crypto Reserve Amid National Movement

In a sharp deviation from emerging trends across the U.S., the Connecticut General Assembly has passed legislation banning the state from holding or investing in cryptocurrencies, effectively closing the door on any form of digital asset reserve. The bill was unanimously approved in both the House and Senate, reflecting a strong bipartisan consensus.

This legislative move positions Connecticut as a holdout against the state-led push for crypto integration into fiscal strategies—just as states like New Hampshire, Texas, and Arizona take steps in the opposite direction.

The new law bars any state entity from the ability to “purchase, hold, invest in, or establish a reserve of virtual currency,” and also prohibits accepting cryptocurrency payments for state services.

The Data

State Resistance Despite National Shift

The Connecticut decision comes as a counterpoint to recent momentum among other states. Since President Donald Trump’s executive order in March, multiple state governments have sought to follow suit by creating crypto-based financial reserves, leveraging digital assets such as Bitcoin (BTC).

Connecticut’s legislative response is one of caution—opting to place a hard stop on crypto integration at the state level, even as it adjusts compliance frameworks for crypto companies operating under its money-transmitter license.

Momentum in Pro-Crypto States

The move contrasts sharply with developments in other jurisdictions:

• New Hampshire became the first state to officially approve a digital assets reserve, aligning directly with federal priorities.
  
• Texas passed a similar bill, currently awaiting Governor Greg Abbott’s signature.
  
• Arizona adopted a modest proposal to set aside unclaimed digital assets as a form of reserve, signaling a low-risk pathway to crypto inclusion.
  

These state-led efforts have been encouraged by the Satoshi Action Fund, a pro-crypto policy group advocating for state-level adoption of Bitcoin and other digital assets.

Advocates See Connecticut Ban as Temporary Setback

Dennis Porter, founder of the Satoshi Action Fund, expressed disappointment with Connecticut’s decision but remained optimistic. He emphasized that other states are embracing innovation, and that real-world benefits will eventually sway Connecticut’s stance.

“Unfortunately, Connecticut has chosen to reject this opportunity—for now,” said Porter. “But we remain optimistic. As more states embrace Bitcoin and see the benefits firsthand, we’re confident Connecticut will follow suit.”

Porter also noted that North Carolina and Ohio are still actively considering legislation to establish reserves before the end of 2025.

Federal Government: Reserve In Progress

While Connecticut is opting out, the federal government is continuing work on the first national bitcoin reserve. Agencies, led by the Department of the Treasury, are still auditing digital asset holdings from past civil and criminal cases.

Per Trump’s order, no taxpayer money will be spent acquiring crypto; instead, existing seized assets will be set aside as long-term investments. At Consensus 2025, senior crypto adviser Bo Hines noted that the administration is considering budget-neutral methods to expand holdings—though final strategies are still under discussion.

Other Legislative Developments

Connecticut’s hardline stance is just one side of a broader national debate. In California, lawmakers have taken a progressive approach by exploring a state-run digital payment pilot program. The bill passed the state House unanimously and is currently under Senate review.

This dual-speed trend among U.S. states—some aggressively adopting crypto policies, others rejecting them outright—could lead to a fragmented policy landscape, making federal coordination even more essential moving forward.

What It Means for Crypto Regulation Nationwide

Connecticut’s ban signals that not all states are ready to engage with digital assets in their financial infrastructure. The ban also increases regulatory friction for crypto companies in Connecticut, now facing stricter compliance obligations under revised licensing frameworks.

However, with pro-crypto forces gaining traction in multiple states—and with the White House backing a federal reserve model—Connecticut may eventually feel political and financial pressure to revisit its policy.

As legislative sessions wind down in 2025, the battle lines are being drawn between crypto-forward states and those choosing regulatory conservatism.