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House File 246 - IntroducedA Bill ForAn Act 1relating to the investment of public moneys in digital
2assets and precious metals.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. SHORT TITLE. This Act shall be known and may be
2cited as the “Inflation Protection Act”.
3 Sec. 2. NEW SECTION. 12B.10D Investments — digital assets
4and precious metals.
51. For purposes of this section:
6a. “Digital asset” means digital-only assets that confer
7economic, proprietary, or access rights, including but not
8limited to virtual currency, cryptocurrency, and natively
9electronic assets, including stablecoins and nonfungible
10tokens.
11b. “Exchange-traded product” means a financial instrument
12approved by the United States securities and exchange
13commission, the commodity futures trading commission, or the
14department of insurance and financial services that is traded
15on a regulated exchange in the United States and derives its
16value from an underlying pool of assets, such as stocks, bonds,
17commodities, or indexes.
18c. “Precious metal” means gold, silver, or platinum, whether
19in coin, bullion, or another form.
20d. “Private key” means a unique element of cryptographic
21data that is known to the owner of the unique element and is
22used for signing a transaction on a blockchain.
23e. “Qualified custodian” means a federal-chartered or
24state-chartered bank, trust company, or depository institution,
25or a company regulated by the state which takes custody of
26digital assets.
27f. “Secure-custody solution” means a technological product
28or blended product and service that does all of the following:
29(1) Ensures that a private key that secures digital assets
30meets all of the following requirements:
31(a) Exclusively known to and accessible by the owner of the
32private key.
33(b) Exclusively contained within an encrypted environment
34and accessible only by end-to-end encrypted channels.
35(c) Not contained, accessible, or controllable by a
-1-1cellular telephone.
2(d) Maintained on hardware that is in at least two
3geographically diverse, secure data centers.
4(2) Enforces user access controls and a multiparty
5governance structure for authorizing transactions and logs all
6user-initiated actions.
7(3) Has a disaster recovery protocol that ensures customer
8access to assets in the event the provider becomes unavailable.
9(4) Undergoes regular code audits and penetration testing
10from audit firms and promptly remedies any identified
11vulnerability.
12g. “Stablecoin” means a digital asset that is issued by a
13corporation backed by United States currency or high-quality
14liquid assets and is redeemable on demand by the holder, at par
15for a fixed monetary value in equivalent United States dollars.
162. Notwithstanding section 12B.10, subsection 4, the
17treasurer of state may invest in precious metals, digital
18assets with a market capitalization of over seven hundred fifty
19billion dollars averaged over the previous calendar year, and
20stablecoins using public moneys from any of the following
21funds:
22a. The general fund of the state.
23b. The cash reserve fund created in section 8.56.
24c. The Iowa economic emergency fund created in section 8.55.
253. The amount of public moneys that the treasurer of state
26invests from a fund under subsection 2 shall not exceed five
27percent of the total amount of public moneys in that fund at
28the time the investment is made.
294. A digital asset acquired by a fund listed in subsection 2
30must be held in one of the following ways:
31a. By the treasurer of state through the use of a
32secure-custody solution.
33b. On behalf of the state by a qualified custodian.
34c. As an exchange-traded product.
355. Precious metals acquired by a fund listed in subsection 2
-2-1must be held in one of the following ways:
2a. By the state in physical form or in conjunction with
3another state according to rules adopted by the treasurer of
4state.
5b. On behalf of the state by a qualified custodian.
6c. As an exchange-traded product.
76. The treasurer of state shall only hold stablecoins which
8have received the appropriate regulatory approvals from a state
9or the United States.
107. If a digital asset can be loaned without increasing
11the financial risk of the state, the treasurer of state may
12loan the digital asset to bring further return to the state
13according to rules adopted by the treasurer of state.
148. Any tax or fee that is permitted to be paid to the
15state in digital assets and is paid with a digital asset with
16a market capitalization of over seven hundred fifty billion
17dollars or stablecoin shall be transferred from the fund
18designated for payment to the general fund of the state, if
19the fund designated for payment is not the general fund of the
20state. The treasurer of state shall reimburse the fund to
21which the qualifying digital asset was designated with United
22States currency from the general fund of the state. If the
23digital asset does not have a market capitalization of over
24seven hundred fifty billion dollars, the digital asset shall be
25converted to United States currency.
269. The treasurer of state may adopt rules pursuant to
27chapter 17A to implement this section.
28EXPLANATION
29The inclusion of this explanation does not constitute agreement with
30the explanation’s substance by the members of the general assembly.
31Under current law, the treasurer of state (treasurer) may
32only make ceratin investments with public moneys. This bill
33allows the treasurer to invest no more than 5 percent of the
34moneys from the general fund of the state, cash reserve fund,
35and Iowa economic emergency fund in precious metals, digital
-3-1assets with a market capitalization of over $750 billion, and
2stablecoins. The bill requires that a digital asset be held by
3the treasurer through the use of a secure-custody solution, by
4a qualified custodian, or as an exchange-traded product. The
5bill requires that precious metals be held in physical form by
6the state or in conjunction with another state, by a qualified
7custodian, or as an exchange-traded product. The treasurer may
8only hold stablecoins that have received regulatory approval
9from a state or the United States. The bill permits the
10treasurer to loan a digital asset to generate revenue for the
11state if doing so does not increase the financial risk to the
12state.
13The bill provides that if a tax or fee is paid to the state
14in digital assets with a market capitalization of over $750
15billion or stablecoin, the asset must be transferred to the
16general fund and the original fund must be reimbursed with
17United States currency. If a tax or fee is paid in digital
18assets with a lesser market capitalization, the asset must be
19converted into United States currency.
-4-sc/ns
2assets and precious metals.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. SHORT TITLE. This Act shall be known and may be
2cited as the “Inflation Protection Act”.
3 Sec. 2. NEW SECTION. 12B.10D Investments — digital assets
4and precious metals.
51. For purposes of this section:
6a. “Digital asset” means digital-only assets that confer
7economic, proprietary, or access rights, including but not
8limited to virtual currency, cryptocurrency, and natively
9electronic assets, including stablecoins and nonfungible
10tokens.
11b. “Exchange-traded product” means a financial instrument
12approved by the United States securities and exchange
13commission, the commodity futures trading commission, or the
14department of insurance and financial services that is traded
15on a regulated exchange in the United States and derives its
16value from an underlying pool of assets, such as stocks, bonds,
17commodities, or indexes.
18c. “Precious metal” means gold, silver, or platinum, whether
19in coin, bullion, or another form.
20d. “Private key” means a unique element of cryptographic
21data that is known to the owner of the unique element and is
22used for signing a transaction on a blockchain.
23e. “Qualified custodian” means a federal-chartered or
24state-chartered bank, trust company, or depository institution,
25or a company regulated by the state which takes custody of
26digital assets.
27f. “Secure-custody solution” means a technological product
28or blended product and service that does all of the following:
29(1) Ensures that a private key that secures digital assets
30meets all of the following requirements:
31(a) Exclusively known to and accessible by the owner of the
32private key.
33(b) Exclusively contained within an encrypted environment
34and accessible only by end-to-end encrypted channels.
35(c) Not contained, accessible, or controllable by a
-1-1cellular telephone.
2(d) Maintained on hardware that is in at least two
3geographically diverse, secure data centers.
4(2) Enforces user access controls and a multiparty
5governance structure for authorizing transactions and logs all
6user-initiated actions.
7(3) Has a disaster recovery protocol that ensures customer
8access to assets in the event the provider becomes unavailable.
9(4) Undergoes regular code audits and penetration testing
10from audit firms and promptly remedies any identified
11vulnerability.
12g. “Stablecoin” means a digital asset that is issued by a
13corporation backed by United States currency or high-quality
14liquid assets and is redeemable on demand by the holder, at par
15for a fixed monetary value in equivalent United States dollars.
162. Notwithstanding section 12B.10, subsection 4, the
17treasurer of state may invest in precious metals, digital
18assets with a market capitalization of over seven hundred fifty
19billion dollars averaged over the previous calendar year, and
20stablecoins using public moneys from any of the following
21funds:
22a. The general fund of the state.
23b. The cash reserve fund created in section 8.56.
24c. The Iowa economic emergency fund created in section 8.55.
253. The amount of public moneys that the treasurer of state
26invests from a fund under subsection 2 shall not exceed five
27percent of the total amount of public moneys in that fund at
28the time the investment is made.
294. A digital asset acquired by a fund listed in subsection 2
30must be held in one of the following ways:
31a. By the treasurer of state through the use of a
32secure-custody solution.
33b. On behalf of the state by a qualified custodian.
34c. As an exchange-traded product.
355. Precious metals acquired by a fund listed in subsection 2
-2-1must be held in one of the following ways:
2a. By the state in physical form or in conjunction with
3another state according to rules adopted by the treasurer of
4state.
5b. On behalf of the state by a qualified custodian.
6c. As an exchange-traded product.
76. The treasurer of state shall only hold stablecoins which
8have received the appropriate regulatory approvals from a state
9or the United States.
107. If a digital asset can be loaned without increasing
11the financial risk of the state, the treasurer of state may
12loan the digital asset to bring further return to the state
13according to rules adopted by the treasurer of state.
148. Any tax or fee that is permitted to be paid to the
15state in digital assets and is paid with a digital asset with
16a market capitalization of over seven hundred fifty billion
17dollars or stablecoin shall be transferred from the fund
18designated for payment to the general fund of the state, if
19the fund designated for payment is not the general fund of the
20state. The treasurer of state shall reimburse the fund to
21which the qualifying digital asset was designated with United
22States currency from the general fund of the state. If the
23digital asset does not have a market capitalization of over
24seven hundred fifty billion dollars, the digital asset shall be
25converted to United States currency.
269. The treasurer of state may adopt rules pursuant to
27chapter 17A to implement this section.
28EXPLANATION
29The inclusion of this explanation does not constitute agreement with
30the explanation’s substance by the members of the general assembly.
31Under current law, the treasurer of state (treasurer) may
32only make ceratin investments with public moneys. This bill
33allows the treasurer to invest no more than 5 percent of the
34moneys from the general fund of the state, cash reserve fund,
35and Iowa economic emergency fund in precious metals, digital
-3-1assets with a market capitalization of over $750 billion, and
2stablecoins. The bill requires that a digital asset be held by
3the treasurer through the use of a secure-custody solution, by
4a qualified custodian, or as an exchange-traded product. The
5bill requires that precious metals be held in physical form by
6the state or in conjunction with another state, by a qualified
7custodian, or as an exchange-traded product. The treasurer may
8only hold stablecoins that have received regulatory approval
9from a state or the United States. The bill permits the
10treasurer to loan a digital asset to generate revenue for the
11state if doing so does not increase the financial risk to the
12state.
13The bill provides that if a tax or fee is paid to the state
14in digital assets with a market capitalization of over $750
15billion or stablecoin, the asset must be transferred to the
16general fund and the original fund must be reimbursed with
17United States currency. If a tax or fee is paid in digital
18assets with a lesser market capitalization, the asset must be
19converted into United States currency.
-4-sc/ns