In Montana, lawmakers have put the brakes on House Bill 429 during a recent House floor session. This bill proposed a novel idea: allowing the state to hold Bitcoin (BTC) as an official state asset.

This decision follows the bill’s earlier progress through the Business and Labor Committee, where it had garnered support in a 12-8 vote just last week.

Montana Strategic Bitcoin Reserve Bill Rejected

Interestingly, House Bill 429 wasn’t solely focused on Bitcoin. It also encompassed provisions for investments in precious metals and stablecoins. However, when it came to digital assets, Bitcoin was the only one that qualified under the bill’s criteria, specifically a $750 billion market cap minimum.

Representative Curtis Schomer championed the bill, describing it as a “valuable measure for the state treasury.” He underscored the importance of diversifying state reserves, especially given growing worries about inflation and shifts in federal political landscapes.

“The dollar is not as strong as we think, and we should not be putting all of our eggs in one basket,” he said.

Schomer pointed out that precious metals have historically served as a safety net during times of economic instability, while digital assets represent a forward-looking investment with significant long-term growth prospects. He emphasized the potential for digital assets to deliver substantial returns.

“Montana will have more control over its economic development and not be susceptible to federal political turmoil,” Schomer added.

Schomer further argued that this proactive approach could be a catalyst for the state’s economic expansion, giving Montana more independence in its financial future.

Despite these arguments, when it came to a vote, House Bill 429 faced rejection, failing by a margin of 41 to 59. While the proposal revealed a partisan divide, it’s noteworthy that a number of Republicans sided with Democrats in opposition.

“HB 429 failed in the House, largely due to fiscal conservative opposition,” Bitcoin Laws posted on X (formerly Twitter).

According to insights shared by Bitcoin Laws, fiscal conservatives were not in complete agreement regarding Bitcoin-related legislation. A significant concern raised by some is the perceived risk associated with using taxpayer funds for Bitcoin investments, which they view as speculative.

“It’s still taxpayer money, and we’re responsible for it, and we need to protect it,” State Representative Steven Kelly said.

On the other side of the debate, proponents of the bill argued that taking calculated risks is essential for growing state assets, especially when facing the pressures of inflation. They characterized inflation as a more immediate threat to taxpayers’ finances. Moreover, supporters positioned Bitcoin as a potential solution to safeguard and even enhance the state’s reserve value over the long term.

Even a proposed amendment, which aimed to sidestep the use of general funds by utilizing interest from the American Rescue Plan Act (ARPA) to fund the initiative, failed to gain traction. Lawmakers raised questions about the legality of this approach, further eroding support for the bill.

With the rejection of HB 429, Montana now joins a list of states, including Wyoming, North Dakota, Mississippi, and Pennsylvania, where similar Bitcoin-focused legislative efforts have not succeeded. Interestingly, despite these setbacks, the idea of state-level Bitcoin adoption is still alive and kicking, with around 20 other states actively considering such proposals.