Why Bitcoin Reserve Bills Fail: VeChain Executive Weighs In

In an interview with BeInCrypto, Johnny Garcia, Managing Director of Institutional Growth and Capital Markets at VeChain Foundation, addressed the rejection of Bitcoin (BTC) reserve bills. He emphasized that the core issue goes beyond legislative resistance—highlighting the need for greater education for both the public and policymakers. 

His remarks come as five states have already dismissed the legislation. As of now, only 18 states are still considering the possibility of integrating digital assets like Bitcoin into their financial systems.

VeChain’s Executive Weighs In on Bitcoin Reserve Bill Rejections

Garcia pointed out that establishing federal or state Bitcoin reserves could drive innovation by modernizing investment frameworks and enhancing operational capabilities. 

“This would bring all the benefits we in crypto are quite familiar with: transparency, immediate settlement, managing counterparty risks—to name a few,” Garcia told BeInCrypto.

Yet, he acknowledged that skepticism persists. Garcia noted that many are still unconvinced about a Bitcoin reserve’s utility and economic sense. The debate becomes even more complex when considering funding sources. 

“Not every citizen in a given state will agree with their taxes financing crypto purchases—something they could just do themselves,” he commented.

Thus, Garcia emphasized that states would need to focus on educating their citizens about the purpose and objectives of including Bitcoin in their reserve portfolios. He stressed that while regulatory frameworks are crucial, success hinges on demonstrating real-world value beyond speculation.

“The blockchain/DeFi industry needs to step up and show that it can deliver proven solutions that go beyond speculative investment and offer real-world value,” Garcia remarked 

He added that to truly change the minds of political and governmental stakeholders, especially those who are instinctively skeptical of crypto, the solutions must extend beyond financial considerations. The exec emphasized that blockchain technology needs to demonstrate its ability to address a broader range of problems.

Garcia highlighted VeChain as a prime example of how blockchain can tackle both new and ongoing issues. He drew attention to VeChain’s use of blockchain to verify sustainability efforts. Garcia noted that such applications make it harder for lawmakers to ignore the technology’s real-world value beyond finance.

Cryptocurrency Reserve Bill Rejections Don’t Represent a Unified View on Crypto

Meanwhile, Garcia cautioned against viewing the rejections at the state level as blanket opposition to cryptocurrency. 

“I wouldn’t say this necessarily reflects deeply ingrained opposition to the concept of crypto in the form of reserves, stockpile, or just another alternative investment option,” he shared with BeInCrypto.

According to Bitcoin Laws, a total of 33 Bitcoin reserve bills were introduced in 23 states. However, Montana, Wyoming, North Dakota, Mississippi, and Pennsylvania have rejected the legislation that would have allowed state investments in digital assets, including Bitcoin.

Currently, there are 27 active bills in 18 states. Importantly, Utah, which was once at the forefront of the Bitcoin reserve race, recently dropped out on a technicality. The Utah bill is still progressing but without the ‘Bitcoin Reserve’ provisions, which have been removed.

Garcia offered a more nuanced view of the legislative resistance. According to him, although several states have voted against reserve bills, the opposition often comes by small margins.

He encouraged assessing the specific reasons behind the rejections rather than generalizing. Gracia also welcomed that states are taking the time to consider the issue carefully.

As states navigate their own approaches to cryptocurrency, momentum is growing at the national level. Senator Lummis has reintroduced the BITCOIN Act. This came shortly after former President Trump signed an executive order to create a strategic Bitcoin reserve funded with seized Bitcoins.

Originally introduced in July 2024, Lummis’ BITCOIN Act failed to pass out of Committee in the Senate.

“I am proud to reintroduce landmark legislation that will codify President Trump’s bold vision to establish the United States Strategic Bitcoin Reserve and strengthening our nation’s economic foundation for generations to come,” Lummis wrote on X.

The bill aims to create a US Strategic Bitcoin Reserve, backed by up to 1 million BTC acquired over five years. Moreover, the holdings would be maintained for at least 20 years.