Two Florida crypto bills have been removed from the legislative process in the latest blow to American state-level strategic Bitcoin reserve ambitions. 

Florida’s House Bill 487 and Senate Bill 550 have been “indefinitely postponed and withdrawn from consideration” on May 3, according to the Florida Senate. 

Florida’s legislative session adjourned on May 2 without the passage of these two bills, which would have advanced legislation to establish a crypto reserve for the state. The Senate and House agreed to extend the session until June 6 to address budget plans. 

Lawmakers passed about 230 bills during the session, dealing with things like prohibiting putting fluoride in the water, protecting state parks, and a school smartphone ban, but diversifying state treasury portfolios was not among them. 

State strategic Bitcoin reserve legislation race. Source: Bitcoin Laws

HB 487, which was introduced in February, would have allowed Florida’s chief financial officer and the State Board of Administration to invest up to 10% of certain state funds into Bitcoin (BTC).

SB 550 was also filed in February to enable investments of public funds in Bitcoin.

Related: Alabama, Minnesota lawmakers join US states pushing for Bitcoin reserves

Florida has now dropped out of the race to pass state-level crypto investment legislation, along with Wyoming, South Dakota, North Dakota, Pennsylvania, Montana and Oklahoma, which have all seen Bitcoin bills fail to pass House or Senate votes, according to Bitcoin Laws. 

Arizona has two more chances 

It came just days after Arizona advanced its strategic Bitcoin reserve legislation further than any other state, until House Bill 1025 was vetoed by Governor Katie Hobbs, who labelled digital assets “untested investments” on May 3.

The Digital Assets Strategic Reserve bill would have permitted Arizona to invest seized funds into Bitcoin and create a reserve managed by state officials. 

The move drew the ire of crypto advocates and Bitcoiners, including entrepreneur Anthony Pompliano, who said: “Imagine the ignorance of a politician to believe they can make investment decisions.”

“Arizona has two more chances to be the first in the nation to establish a Bitcoin reserve,” said Satoshi Action Fund founder Dennis Porter on May 5, citing an article from Fox’s Eleanor Terrett. 

He added that the most likely to pass is HB 2749, which offers a budget-neutral method to fund the reserve using profit from the unclaimed property fund.

Source: Dennis Porter

There is also a related bill, SB 1373, which would authorize the state treasurer to allocate up to 10% of Arizona state funds into digital assets. It has yet to reach a final vote.

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The new “Digital Asset Market Structure Discussion Draft” introduced by House Republicans on May 5 could work to reduce the dominance of large crypto firms and promote more participation in the broader market, according to an executive from Paradigm. 

The discussion draft, led by the House agricultural and financial services committee chairs Glenn Thompson and French Hill, is an “incremental, albeit meaningful, rewrite” of the Financial Innovation and Technology for the 21st Century Act (FIT21), Paradigm’s vice president of regulatory affairs Justin Slaughter said in a May 5 X post.

One-pager of the digital asset market structure discussion draft submitted by House Republicans on May 5. Source: US House Agriculture Committee

One of the major changes from FIT21 is that the draft defines an affiliated person as anyone who owns more than 1% of a digital commodity issued by the project — down from 5% in the FIT21 bill — a move Slaughter said may curb the influence of big crypto firms and lead to more participation in the crypto market.

“This is a portent of the entire bill. There are often criticisms of crypto being too dominated by a few large firms. This bill makes clear the regulatory regime proposed is going to push against that fact and strongly encourage more small-d ‘democratization’ of the space.”

The draft also defines a “mature blockchain system” as one that, together with its related digital commodity, is not under the “common control” of any person or group.

Source: Justin Slaughter

The Securities and Exchange Commission would be the main authority regulating activity on crypto networks until they become sufficiently decentralized, Slaughter noted.

The draft also clarified that decentralized finance trading protocols are those that enable users to engage in a financial transaction in a “self-directed manner.” Protocols that meet this criterion are exempt from registering as digital commodity brokers or dealers.

The draft also referred to digital commodities as “investment contract assets” to distinguish their treatment from stocks and other traditional assets under the Howey test.

According to Slaughter’s analysis, securities laws won’t be triggered unless the secondary sale of tokens also transfers ownership or profit in the underlying business.

Crypto firms would also have a path to raise funds under the SEC’s oversight while also having a “clear process” to register their digital commodities with the Commodity Futures Trading Commission, the committee members said in a separate May 5 statement.

Joint rulemaking, procedures, or guidelines related to crypto asset delisting must be established by the CFTC and SEC should a registered asset no longer comply with rules laid out by the regulators.

A ‘clear opportunity’ to advance crypto innovation, rules once and for all

Speaking about the need for a comprehensive crypto regulatory framework, the House committee members said crypto is a “clear opportunity” to advance innovation in the US — most notably through modernizing America’s financial infrastructure and reinforcing US dollar dominance.

The Republicans criticized the previous Biden administration and the Gary Gensler-led SEC for adopting a regulation-by-enforcement strategy rather than creating clear rules for market participants.

Related: VanEck files for BNB ETF, first in US

Many crypto firms were stuck in “legal limbo” as a result of the unclear rules, which pushed some industry players overseas, where clearer rules exist, the House committee members said.

“America needs to be the powerhouse for digital asset investment and innovation. For that to happen, we need a commonsense regulatory regime,” said Dusty Johnson, chairman of the subcommittee on commodity markets, digital assets and rural development.

Slaughter added: “This is the bill that will, finally, provide a clear regulatory regime on crypto that many have been calling for.”

Republicans already facing roadblocks over discussion draft

House Financial Services Committee Ranking Member Maxine Waters plans to block a Republican-led event discussing digital assets on May 6, a Democratic staffer told Cointelegraph.

The hearing, “American Innovation and the Future of Digital Assets,” is expected to discuss the new crypto markets draft discussion paper pitched by Thompson, Hill, and other committee members.

However, according to the unnamed Democratic staffer, the current rules require all members of the House Financial Services Committee to agree on such hearings.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

The Tron network has drawn closer to regaining the lead from Ethereum in Tether circulation after another big mint by the US stablecoin issuer.

On May 5, Tether minted another $1 billion Tether (USDT) on the Tron network, according to Arkham Intelligence. This brings the total USDT on Tron to $71.4 billion, according to the Tether Transparency report. 

In comparison, there is currently $72.8 billion USDT circulating on the Ethereum network, so just $1.4 billion more USDT on Tron will see it become the leading network for the world’s largest stablecoin issuer, as it has been previously over the last two years. 

Tron was ahead of Ethereum for USDT circulation between July 2022 and November 2024, but a large $18 billion mint on Ethereum pushed the network ahead again, according to CryptoQuant. 

The third-largest network for USDT is Solana, which has $1.9 billion circulating, and there are smaller amounts on Ton, Avalanche, Aptos, Near, Celo and Cosmos. 

USDT circulation on Ethereum and Tron. Source: CryptoQuant

Tether’s total circulation is currently at a record high of $149.4 billion USDT, having increased by 8.6% since the beginning of this year. This gives the firm a commanding stablecoin market share of 61%, according to CoinGecko. 

Related: Tether AI platform to support Bitcoin and USDT payments, CEO says

Its closest competitor, Circle, has a market share of 25% with almost $62 billion USDC (USDC) in circulation.

Stablecoin issuance has surged over the past six months, and they currently represent 8% of the total crypto market capitalization.

In a report in late April, the United States Treasury Department predicted that the stablecoin market could reach $2 trillion by 2028 if regulatory clarity is achieved. 

Stablecoin legislation nearing next vote 

It is widely believed that two key pieces of legislation need to be passed into law in the US to cement the position of stablecoins. 

The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act sets out clear definitions for “payment stablecoins” and reserve rules for stablecoin issuers.

Lawmakers in the US Senate will move forward with a vote on the GENIUS stablecoin bill before May 26, according to reports. 

Meanwhile, the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, which governs the approval and supervision of “federally qualified nonbank payment stablecoin issuers,” is also going through Congress. 

Tether is also planning to launch a US-based stablecoin later this year, with timing dependent on the passing of legislation.  

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