Arizona Bill Proposes Bitcoin ETFs for Retirement Plans
A bill currently before the Arizona state senate is seeking to encourage the inclusion of Bitcoin exchange-traded funds (ETFs) in the state’s retirement plans for government workers. The proposed adoption of Bitcoin as a digital asset is outlined in Senate Concurrent Resolution 1016, which was introduced by state Sens. Jake Hoffman and Warren Petersen, along with Rep. Joseph Chaplik.
The resolution, although non-binding, highlights the increasing market interest in Bitcoin and Bitcoin ETFs following the approval of 11 spot Bitcoin ETFs in January. It emphasizes that Bitcoin has a market cap exceeding $1.3 trillion and mentions that global assets under management for firms that have filed for a Bitcoin ETF exceed $16 trillion.
The resolution also points out that the state already includes other high-value assets like gold and silver in the form of ETFs within its pension plans.
Expanding to Digital Asset-Based ETFs
While the proposed legislation focuses on Bitcoin, it leaves room for considering other digital asset-based ETFs, including the highly anticipated Ethereum ETFs currently being reviewed by the U.S. Securities and Exchange Commission.
The resolution suggests that it is crucial for the Arizona State Retirement System and the Public Safety Personnel Retirement System to collaborate with the State Treasurer’s office in assessing the potential risks and benefits associated with investing in Bitcoin and digital asset ETFs. This evaluation should take into account the evolving regulatory landscape and growing market capitalization.
In conducting this evaluation, the resolution urges the state retirement systems to consider feasibility, risks, and benefits of digital asset investments. It also calls for recommendations to be submitted to key state officials.
Advocacy for Including Bitcoin Exposure
Entrepreneur and investor Anthony Pompliano has separately advocated for the inclusion of Bitcoin exposure in pension plans. Over four years ago, Pompliano issued a call for every public pension fund to purchase Bitcoin.
Pompliano referred to a letter he wrote in December 2018, in which he explained why public pension funds should invest in Bitcoin. He argued that these funds only needed to allocate 1% of their assets to Bitcoin in order to have a significant impact.
Government pension funds across the country are facing challenges in meeting their obligations to retirees. Pompliano suggests that if every state pension fund had invested 1% in Bitcoin back in 2018, there would be 14 fully funded state pension funds instead of just four.
Pompliano disagrees with the notion that pension funds should not buy Bitcoin today because the returns have already been captured. He believes that looking forward, there are still opportunities for growth and potential returns.
Hot Take: Arizona Leading the Way
The proposed bill in Arizona demonstrates the state’s forward-thinking approach to embracing digital assets and blockchain technology. By considering the inclusion of Bitcoin ETFs in retirement plans for government workers, Arizona is acknowledging the growing market interest and potential benefits of cryptocurrencies.
If passed, this bill could set a precedent for other states to follow suit and explore similar measures. It could pave the way for increased adoption of digital assets within institutional investment portfolios, ultimately benefiting both retirement plan participants and the broader cryptocurrency ecosystem.
As cryptocurrencies continue to gain mainstream recognition and acceptance, it is crucial for regulators and policymakers to create an enabling environment that allows individuals and institutions to participate safely and responsibly. The proposed bill in Arizona is a step in the right direction towards achieving this goal.
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