tl;dr
Connecticut has enacted Public Act No. 25-66, a comprehensive law banning government entities from establishing virtual currency reserves or accepting crypto payments. The legislation includes strict consumer protection measures requiring crypto businesses to disclose risks, display warnings about i...
Connecticut has enacted the strictest ban on government cryptocurrency investments in the nation, prohibiting state entities from holding virtual currency reserves or accepting crypto payments. This comprehensive law, Public Act No. 25-66, explicitly bars government bodies from establishing virtual currency reserves and forbids accepting cryptocurrency as payment for any amounts due to the state or its subdivisions.
The legislation imposes rigorous consumer protection rules on crypto businesses, requiring mandatory risk disclosures, bold warnings about the irreversibility of virtual currency transactions, and verification of users under 18. It also introduces new definitions and compliance requirements for crypto service providers, enhancing regulatory oversight through strengthened money transmission statutes and stricter compliance frameworks for licensed firms.
Connecticut’s approach stands in stark contrast with other states that are adopting Bitcoin reserves as strategic assets. While 16 states are moving forward with crypto reserve proposals and 31 related bills remain in progress, 8 states have rejected such measures. Notably, New Hampshire and Arizona recently established strategic Bitcoin reserves, reflecting a national divide over the role of cryptocurrencies in public finance.
The state's ban highlights concerns over cryptocurrency’s notorious volatility and the fiduciary responsibilities tied to managing public funds. Connecticut’s General Assembly unanimously passed House Bill 7082, ensuring the state’s government entities will not engage in digital asset initiatives, marking one of the most restrictive state-level policies on crypto to date.