Key Insights:
- Morgan Stanley says Bitcoin’s shrinking volatility makes it viable for global reserves.
- Florida shelves Bitcoin reserve bills, joining Wyoming, Montana, and South Dakota.
- Arizona’s Bitcoin reserve bill passed but was vetoed; new versions are still active.
Morgan Stanley’s latest report suggests Bitcoin reserve status could be within reach. Meanwhile, some U.S. states are retreating from plans to integrate cryptocurrency into their financial strategies.
The investment bank acknowledged the growing market capitalization of Bitcoin and noted that its price volatility is gradually declining. Meanwhile, Florida lawmakers have withdrawn two bills to create a state-level Bitcoin reserve indefinitely.
This decision places Florida among several other U.S. states where similar proposals have failed to advance in 2025.
Bitcoin Reserve Status: Growing Potential and Market Evaluation
Morgan Stanley published a detailed report stating that a Bitcoin reserve status could be achievable. This report highlighted its potential as a global asset.
The bank explained that while Bitcoin is more volatile than traditional reserve currencies, its volatility has been trending downward. The report suggests allocating $370 Billion to Bitcoin would reflect its existing share in the currency market.
This highlights Bitcoin’s growing role in global finance. The report estimates that 12% to 17% of Bitcoin’s supply would align with major global currencies if it were used as a reserve. This comparison highlights Bitcoin’s potential role in international finance.
The report is released as policymakers evaluate digital assets’ role in sovereign and institutional investments. Many are exploring how these assets fit into broader financial strategies.
“The market cap is now large enough to be considered for reserve allocation,” the report stated. The report also noted that risks remain due to price fluctuations.
Florida Withdraws Strategic Bitcoin Reserve Bills
Florida introduced House Bill 487 and Senate Bill 550 earlier this year. These bills aimed to allocate public funds to a Bitcoin reserve, integrating cryptocurrency into state finances.
The bills aimed to let state officials invest in digital assets. Up to 10% of certain state funds could be allocated. However, on May 3, the Florida Senate confirmed that both bills were indefinitely postponed and withdrawn from consideration.
The legislative session adjourned without including the Bitcoin-related proposals, even as more than 200 other bills were passed. Lawmakers did not provide an apparent reason for the withdrawal.
Other legislative priorities and concerns about crypto investments may have influenced their decision. Florida joins states like Wyoming, South Dakota, and Montana in halting Bitcoin reserve initiatives. Similar proposals in these states were also withdrawn.
Arizona Bitcoin Reserve Bill Vetoed, but Efforts Continue
Arizona advanced the furthest in proposing a Bitcoin reserve, as Senate Bill 1025 had passed both state legislative chambers. This bill would have permitted the state to invest seized funds into Bitcoin and establish a reserve managed by state officials.
Despite legislative approval, Governor Katie Hobbs vetoed the bill on May 3. She stated that Arizona’s retirement funds should not be used for untested investments. Virtual currency, she emphasized, is not suitable for state-managed funds.
This decision was consistent with her earlier statements that she would not support legislation without bipartisan support for disability funding. Supporters of the bill remain determined. Arizona Senator Wendy Rogers vowed to refile it at the next session.
Two other bills, HB 2749 and SB 1373, are still active. HB 2749 proposes a budget-neutral funding method using unclaimed property profits. SB 1373 seeks to allocate up to 10% of state funds to digital assets.
International Moves and Industry Support for Crypto Reserves
Elsewhere worldwide, there is an increasing appetite for national-level crypto reserves. The former Chief Executive Officer (CEO) of Binance, Changpeng Zhao, popularly known as CZ, recently inked an MoU in Kyrgyzstan.
The agreement was signed during the first sitting of the Council for the Development of Digital Assets. President Sadyr Japarov was present at the meeting.
CZ stated he would help Kyrgyzstan develop a cryptocurrency reserve comprising Bitcoin and Binance’s native token: BNB. Binance will also spearhead education through Binance Academy. The firm would ensure the government and other financial organizations understand the concept.
This global move is part of larger trends in looking at digital assets as financial resources. Arizona and Florida are still evaluating their stance on cryptocurrency reserves. Meanwhile, global institutions and emerging economies are beginning to explore this possibility.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
Olivia Stephanie is a FinTech enthusiast with a keen understanding of financial markets. Her passion for economics and finance has led her to explore emerging blockchain technology and cryptocurrency markets.