Bitcoin as “Digital Gold” for State Portfolios
Florida’s Chief Financial Officer Jimmy Patronis has written to Florida’s State Board of Administration to consider adding Bitcoin as part of the pension fund investment portfolio. In a letter to SBA Executive Director Chris Spencer on Oct. 29, he reiterated how the virtual currency would add diversification to Florida’s $205 billion in pension funds he referred to as “digital gold” that could hedge against other volatile assets.
Consider Incentivizing a Digital Currency Investment Pilot Program
Patronis proposed creating a “Digital Currency Investment Pilot Program” in the Florida Growth Fund, which could invest up to 1.5% of the Florida Retirement System Trust Fund in high-growth assets. Already, this asset has been invested in nearly every industry, on pace to invest almost $1 billion since 2022-a very clear example of the state’s friendly attitude when it comes to new investment approaches.
Consistency with State Anti-CBDC Stance
This move is in line with the opposition of Governor Ron DeSantis to CBDCs. Patronis referred to the independence of crypto “from any central bank entity” and described Bitcoin as the “antithesis” of CBDCs. The addition of Bitcoin into the portfolio would let Florida move further away from the federal government’s digital currency initiatives.
Investing in Crypto Like Other States
If this goes through, Florida would join the ranks of other states, such as Wisconsin and Michigan, which have already included crypto assets in their pension funds. The State Investment Board of Wisconsin and the Retirement System of Michigan both have exposure to Bitcoin via ETFs, using crypto as a small wart in a diversified portfolio.
What’s Next for the Proposal
He asked that the SBA present a detailed feasibility report regarding crypto investments by March 4, 2025. The study would encompass an analysis of the Bitcoin investment on the basis of risks and benefits and overall feasibility concerning state pensions. This would be a big step in any serious state approach to digital asset investment.
With Bitcoin, Florida is considering fresh ways to secure pensions while updating its asset management approach to respond to burgeoning interest in crypto investments throughout the United States.
