Alabama committee debates allowing treasurer to buy crypto, advances virtual-currency tax exemption

The House Ways and Means General Fund Committee on Oct. 26 considered three bills by Representative Shaw that would change how the state treats cryptocurrencies and blockchain technology. The committee carried over bills that would authorize the state treasurer to acquire certain crypto assets and that would require additional study of putting public records on a blockchain, and it advanced a separate bill exempting virtual currency from ad valorem tax.

The measures matter because they would change how the state manages investments, tax treatment of digital assets and how public records might be published. Representative Shaw described HB 482 as a “strategic reserve” measure to give the treasurer authority to purchase cryptocurrencies or funds that hold them. He said the bill would permit the treasurer to “purchase strategically, cryptocurrencies and cryptoassets,” but would not require any purchase.

Supporters framed the bill set as offering legal clarity and modernization. Representative Shaw told the committee the virtual-currency preemption bill would “codify what’s already taking place” and give regulatory certainty to asset holders and businesses. He said about 20% of Alabamians own crypto assets, and that the preemption measure would clarify that virtual currency is not treated as tangible property for the state’s ad valorem tax.

Opponents and cautious members urged limits and more study. Representative Witt said he worried about exposing state funds to volatile markets and told the committee he believed “10% is too high” if the treasurer is given discretion to put that share of a fund into crypto. Representative Sales asked whether the bill would permit holdings in ETFs or require custody of coins; Shaw said lawmakers could narrow the bill to limit holdings to regulated funds or lower the percentage cap.

After debate, the committee voted to carry over HB 482, the bill authorizing the state treasurer to acquire crypto assets, to a later meeting so members could draft tighter guardrails. The committee advanced the preemption and tax-exemption bill for virtual currency (listed on the calendar as House bill 4 80 30) with a favorable report. Lawmakers also carried over HB 484, a measure to require use or study of a public blockchain for some state expenditures and records, and asked staff and an existing blockchain work group to continue study.

Representative Shaw and members repeatedly said the bills were intended to provide statutory clarity and not to compel the treasurer to buy crypto. Committee members asked for limits such as narrower asset classes (for example, ETFs/ETPs), lower percentage caps, and restrictions on lending or custody that could increase risk. Several members said they prefer carrying the measures over while staff and the Office of Information Technology (OIT) complete a strategic plan and work-group review.

The committee’s actions leave the virtual-currency ad valorem exemption moving forward while the investment-authority and public-blockchain bills remain under study. The sponsor and members said they will continue negotiations on percent limits, custodial safeguards and whether to confine holdings to regulated funds before returning the bills to the calendar.