Connecticut’s Crypto Ban: A Break from the National Trend
Connecticut has signed onto the first of its kind in the U.S. to fully prohibit government engagement with digital assets, creating a sweeping law that prohibits state and local governments from owning, investing in, or accepting cryptocurrencies for any purpose.
The move, signed into law as Public Act No. 25-66 on June 10, 2025, is done at a time when the majority of states — and the federal government — actively examine the place of Bitcoin and other digital assets in public fiscal policy.
The new bill, endorsed by the Senate and House unanimously, expressly forbids state treasury, pension funds, and other state-operated institutions from investing any funds in Bitcoin or any other digital currencies. It also forbids state and local governments to receive payments in crypto for taxes, fees, or any other use, and prevents establishing a state-backed crypto reserve.
Notably, the ban only holds for state services and public funds — Connecticut businesspeople and residents are otherwise free to buy, sell, and use crypto as governed by existing laws.
Connecticut's action is also the reverse of a growing trend among other states. Arizona and New Hampshire already have legislation enacted to create state Bitcoin reserves, and Texas and North Carolina are presently deliberating the same. This is all the more surprising in the context of President Donald Trump issuing an executive order in March 2025 to request that federal agencies develop a Strategic Bitcoin Reserve from seized digital assets, demonstrating pro-crypto attitudes at the federal level.
Lawmakers Cite Risks, Critics Warn of Missed Opportunity
The supporters of Connecticut's prohibition claim that it is an informed choice to protect public money from the extreme volatility, security risks, and accounting intricacies of virtual assets. Lawmakers utilized the volatility of virtual currencies, the susceptibility to cyberattacks, and the intricacy of valuing such assets as key reasons for the prohibition. The bill also creates new standards for crypto businesses operating in the state, such as stricter licensing, compliance, and notification of customers, and stronger protections for minors who use digital wallets or crypto kiosks.
Others warn that the ban will cut Connecticut taxpayers off from possible Bitcoin profits and stifle innovation.
"Connecticut has chosen to miss this opportunity—at least for now.".
But whereas other states are luckier in enjoying the fruits of Bitcoin reserves, we expect Connecticut to reconsider," said Satoshi Action Fund CEO Dennis Porter. Certain lawyers term the action symbolic rather than real, a political move and not one in reaction to truly existing threats, and cite the Democratic Party's firm grip on the state as being a key force in the bill's passage.
Will Other States Follow Connecticut’s Lead — or Rebel?
The state's move also hints at the piecemeal nature of U.S. cryptocurrency policy. While 27 states have introduced bills allowing public funds to invest in Bitcoin or other high-market-cap tokens, an ever-growing list — Montana, Wyoming, North Dakota, South Dakota, Pennsylvania, Florida, and Arizona included — have spurned or stymied such legislation in 2025 alone.
This patchwork approach has created confusion for crypto business and investors, who must navigate a maze of incompatible state regimes and solutions to digital assets.
While the controversy smolders, though, the issue is whether Connecticut's strong stance will prompt other states to emulate it with bans of their own, or whether it will provoke a backlash and fresh attempts at bringing digital assets into state coffers elsewhere. With the federal government's own plan for a Bitcoin reserve still in its infancy, the fate of state crypto policy far from determined.
