Kansas State Senator Craig Bowser has proposed a bill that would allow up to 10% of public employee retirement funds to be invested in Bitcoin exchange-traded funds (ETFs). The bill, known as Senate Bill 34, aims to give the Kansas Public Employees Retirement System (KPERS) authorization to allocate a portion of its retirement fund to Bitcoin-backed ETFs.
The proposed legislation would establish a board of trustees responsible for allocating funds from the state’s retirement fund to Bitcoin ETFs, up to a maximum of 10%. The bill states, “[…] the board may invest and reinvest moneys of the fund in Bitcoin exchange-traded products issued by an investment company registered in Kansas.” Additionally, the board would not be required to sell the Bitcoin ETFs unless it is deemed beneficial for the beneficiaries, even if the value of the ETFs exceeds 10% of the fund. The bill also mandates that the board of trustees provide an annual examination of the investment program to monitor its performance.
While this bill represents a significant development for Bitcoin supporters in Kansas, it must go through the legislative process before it can become law. The bill was introduced on January 16 and has been passed to the Committee on Financial Institutions and Insurance as of January 17. It will need to pass four more steps before being referred to the House of Representatives, where it will undergo a similar process. If approved, it will then be sent to the governor for final approval or veto.
This bill indicates a potential change in the stance of Kansas lawmakers regarding cryptocurrency investments. In 2023, lawmakers in the Kansas House of Representatives proposed a bill to limit political crypto donations to $100. This proposed cap was based on the fair market value of the digital assets at the time of donation. The bill also required that crypto donations be immediately converted into US dollars, with no option to hold or use the assets. However, the 2023 bill was removed from consideration after failing to meet the state’s Rule 1507, which sets strict deadlines for certain bills.