Florida CFO calls for state pension system to invest in Bitcoin
Jimmy Patronis, the Chief Financial Officer (CFO) of the US state of Florida, has sent a public letter to the Florida State Board of Administration (SBA), which manages the state's pension funds.
In this letter, he calls on Executive Director Chris Spencer to look into the option of investing in Bitcoin or cryptocurrencies per se for the state pension system.
As a Trustee over the State Board of Administration, please consider this letter as a request to the SBA to provide a report on the feasibility, risk, and potential benefits of directing a portion of state retirement system monies into digital asset classes.
From the letter
Reasons for a government Bitcoin investment
In the letter, Patronis lists several reasons why a Bitcoin investment by the US state of Florida could be worth considering.
For example, the assumption that Bitcoin can not only improve returns, but also the diversification of a portfolio.
When managing state pensions for firefighters, teachers, and police officers, it's also essential to prioritize the bottom line and ensure the best return on investment for Floridians. This is where the potential of investing in a cryptocurrency, like Bitcoin, becomes particularly compelling. Bitcoin is often called “digital gold,” and it could help diversify the state’s portfolio and provide a secure hedge against the volatility of other major asset classes.
From the letter
As part of this, Florida's treasurer also touches on the fact that Wisconsin's pension fund and Michigan's have already made a play for Bitcoin spot ETFs.
Two other states, Wisconsin and Michigan, have seen it wise to invest a small portion of their pension funds into cryptocurrency. In March, Arizona’s state Senate advanced efforts to add crypto to state retirement funds to encourage pension fund managers to consider crypto in their allocations. Moreover, Wyoming and Nebraska are leaders in crypto mining and have enacted dozens of laws to attract the industry, including a framework for chartering crypto banks.
From the letter
Because the Florida Growth Fund allows up to 1.5 percent of Florida Retirement System (FRS) pension fund assets to be invested in technology and growth companies, Patronis is floating the option of using it to venture into a first Bitcoin investment.
The State Board of Administration maintains a Florida Growth Fund that allows for more innovative and emerging investments, and a Digital Currency Investment Pilot Program could be a perfect fit, offering potential benefits we cannot afford to overlook.
From the letter
The Florida Growth Fund had invested nearly $1 billion to date as of January.
Backing for Bitcoin and Co.
In order to give Bitcoin and cryptocurrencies further legitimacy in the letter, the Republican also refers to the stance of his two party colleagues Ron DeSantis and Donald Trump.
On the one hand, he describes cryptocurrencies as an opponent to a central bank digital currency (CBDC), of which Florida Governor DeSantis in particular is a staunch opponent.
Recently, Governor Ron DeSantis also leaned forward to protect the personal finances of Floridians from government overreach and woke corporate monitoring by signing legislation to fight back against Central Bank Digital Currencies (CBDC). His leadership in this area protects consumers against globalist efforts to adopt a worldwide digital currency. Likewise, on its face, crypto is the antithesis of a central currency, providing decentralized digital currencies managed on blockchain technology, not issued or controlled by any government agency.
From the letter
In addition, Patronis cites Trump's speech at the Bitcoin Conference in Nashville this July, in which the likely next US president announced, among other things, that he would establish a federal Bitcoin reserve.
In a recent speech at the Bitcoin 2024 convention, President Donald Trump proposed the idea of a national stockpile of cryptocurrency, vowing to make the U.S. the world's cryptocurrency leader. This comes as the Communist Party of China makes inroads every day into the crypto world to grab control over this emerging currency. Trump said he would establish a crypto presidential advisory council and create a national "stockpile" of bitcoin using cryptocurrency the U.S. government currently holds, mostly seized in law enforcement actions. I believe this forethought and innovative thinking from a successful businessman like President Trump must not be taken for granted.
From the letter
US dominated by Bitcoiners?
The effort by the CFO of the US state of Florida to promote an investment by the state pension system in Bitcoin is another positive signal from the United States regarding the asset class. The signaling effect of letters of this kind should not be underestimated. In view of the positive developments surrounding the role of Bitcoin in pension systems, it can be assumed that more state pension funds will build up an initial Bitcoin position via ETFs in the coming months.
Bitcoin generally seems to be perceived by more and more influential US politicians as an opportunity that should be welcomed with open arms. For example, the Pennsylvania House of Representatives recently voted in favor of a bill that, among other things, aims to protect the right to self-custody of Bitcoin - Blocktrainer.de reported.
The regulatory environment for Bitcoin and Co. is only likely to get better if Donald Trump does indeed become the 47th President of the United States. Should the Republican win the election next week, JD Vance would also be the first vice president of the USA to be a Bitcoin holder. Vance disclosed holding more than USD 100,000 in BTC at the end of 2022 - Blocktrainer.de reported.
It remains to be seen to what extent the US government will continue to use Bitcoin as an investment or reserve asset in the coming months. As the USA is a pioneering nation, its general openness towards Bitcoin could also improve the regulatory situation worldwide.