Alabama should establish Bitcoin reserve, says state auditor
Alabama State Auditor Andrew Sorrell has voiced his support for the creation of a state Bitcoin reserve. In an interview with a local publication, he highlighted the numerous benefits such a reserve could bring.
The benefits of cryptocurrency for Alabama
Sorrell, a former legislator and long-time supporter of cryptocurrency, emphasized that embracing crypto would make the state more attractive to businesses and contribute to the stability of Alabama's finances. According to Sorrell, it‘s clear that crypto is here to stay: "Crypto is here to stay," he said, and "the fight to determine which states will benefit the most has begun."
He added, "The states that are first to adopt a tax and regulatory framework that is friendly to crypto will attract businesses and investment."
The possibility of investing in Bitcoin and Ether
With the recent introduction of Bitcoin and Ether Exchange-Traded Funds (ETFs) in the United States, it has become easier for the state to invest in these cryptocurrencies, just like buying stocks through a brokerage. According to Sorrell, cryptocurrency offers better value: "It is also the fastest-growing asset class, averaging an astounding 55% per year over the past 15 years."
Sorrell compares crypto to traditional investments like government bonds, noting that the returns on, for example, Treasury bonds—offering a 4% yield while inflation is 2.7%—barely generate any profit.
The model for Alabama's Bitcoin reserve
Sorrell suggested modeling Alabama‘s Bitcoin reserve after the federal BTC reserve promised by President-elect Donald Trump. Since Bitcoin is currently in a bull market, Sorrell proposed building up the reserve with monthly purchases over the next two years. He also warned about the potential risks of the US dollar as the world‘s reserve currency: "What happens if the dollar loses its status as the world‘s reserve currency? What if inflation rises to 8% again like it did after the pandemic? Bitcoin‘s value is unaffected by what happens to the US dollar." Slow progress on crypto in Alabama
Although Alabama has many crypto-friendly politicians at both the state and federal levels, progress on crypto legislation has been slow. In May, the state established the Alabama Blockchain Study Commission, which will focus on studying crypto regulation, taxation, mining, and other issues. The commission will dissolve after submitting its report to the legislature in 2026.
This year, a bipartisan bill to prevent the state from restricting digital asset storage or mining, levying extra taxes on digital assets, and exempting mining, staking, and running a node from being classified as a security or money transmission failed to pass.