Committee advances blockchain bill allowing limited state treasurer investments and zoning parity for mining

The Senate Revenue and Taxation Committee gave a favorable recommendation to second substitute House Bill 230, the Blockchain Digital Innovation Amendments, sending the bill toward the Senate floor by a 4–2 margin after extended discussion and public comment.

Representative Tuscher, sponsor of the measure, said the bill grows out of a three‑year Blockchain and Digital Innovation Task Force intended to modernize Utah law for digital‑asset businesses. The bill has three primary components: clarifying state treatment of digital assets, ensuring zoning parity so digital‑asset mining in industrial areas is treated the same as other industrial uses, and allowing the state treasurer limited authority to invest certain long‑term portfolios in qualifying digital assets under strict custody requirements.

Representative Tuscher described qualifying investments as those in digital assets with a market capitalization threshold and limited to particular funds identified as long‑term portfolios. She said the bill limits investments to assets “only those with a market cap of over $500,000,000,000,” and restricts which state funds could be used (the sponsor referenced the rainy‑day portfolios listed in the bill). The bill also includes custody language that names banks, credit unions and trust companies as acceptable qualified custodians.

State Treasurer Marlo Oakes explained current practice: the treasurer’s rainy‑day portfolios prioritize safety of principal and liquidity and are invested primarily in the Public Treasurers’ Investment Fund, which behaves like a money market with short‑duration fixed income. Oakes said that the treasurer already has authority under existing law to invest in digital assets in longer‑term portfolios that are exempt from the Money Management Act, but the bill would explicitly permit limited investment in specified rainy‑day funds and set prudential safeguards.

Committee members pressed on liquidity, custody and whether the rainy‑day funds’ objectives align with volatile digital assets. Senator Brammer and others expressed concern that cryptocurrency liquidity and custody differ from traditional ETFs and equities and that rainy‑day funds’ need for liquidity may make crypto an unsuitable fit. Representative Tuscher and proponents said the language narrows permissible assets to more established tokens and requires qualified custodians.

Public commenters included Eric Peterson of Satoshi Action Fund, who supported the bill and said the model mirrors 20 states’ efforts; and Catherine Austin Fitts, who advised against the provisions, arguing rainy‑day funds are designed for highly liquid, stable investments and that stablecoins and Bitcoin present liquidity and regulatory concerns.

Senator Colomar moved the favorable recommendation. After brief further discussion, the committee passed the bill 4–2. Committee members said they expect the sponsor and treasurer to continue refining custody and portfolio‑policy details on the bill’s path to the floor.

Because the bill changes portfolio authorization and local zoning parity for mining, the treasurer’s office and local governments will need to review implementation guidance if the bill becomes law.