Connecticut Bans State Government from Accepting or Investing in Virtual Currency
Connecticut has officially passed a law that restricts the state government from accepting, holding, or investing in virtual currency, effectively banning the creation of a cryptocurrency reserve.
On June 30, Governor Ned Lamont signed House Bill 7082 into law, following unanimous approval by both chambers of the state legislature. The legislation, now enacted as Public Act 25-66, is scheduled to take effect on October 1, 2025.
The bill, introduced in February by Representative Jason Doucette, advanced swiftly through the legislative process. It passed the House and Senate without a single opposing vote, which confirms a strong bipartisan consensus on limiting state involvement with digital assets such as Bitcoin.
The new law prohibits Connecticut and its political subdivisions from accepting virtual currencies for payments or from purchasing, holding, or establishing any form of digital asset reserve. The statute adopts a broad definition of “virtual currency” under section 36a-596 of the state’s general statutes, encompassing most cryptocurrencies in circulation today.
Further, it implements extensive regulatory updates to the state’s money transmission framework and mandates that crypto businesses operating under the state’s jurisdiction maintain a 1:1 reserve backing for all customer-held digital assets.
The law also introduces mandatory risk disclosures, fraud protection measures, and strict transaction limits for virtual currency kiosks commonly known as crypto ATMs.
Connecticut Takes a Stand Against Cryptocurrency Reserves
The legislation effectively removes Connecticut from ongoing state-level efforts to integrate Bitcoin into public treasury strategies. While some states have moved to adopt strategic reserves as part of broader digital asset initiatives, Connecticut’s blanket prohibition makes it one of the most restrictive jurisdictions in the country regarding cryptocurrency adoption by state institutions.
By contrast, at least 17 U.S. states are currently reviewing legislation focused on creating state-managed Bitcoin or digital asset reserves. Among them, New Hampshire and Arizona have fully enacted such frameworks, while Texas has cleared similar legislation through both chambers.
However, not all efforts have succeeded. On July 1, Arizona Governor Katie Hobbs vetoed House Bill 2324, which sought to establish a Bitcoin reserve fund using cryptocurrencies seized by the government.
Hobbs argued that the proposal could discourage local law enforcement from engaging in digital asset investigations by redirecting forfeited assets away from local agencies.