Iowa SF 403: Investment of Public Moneys in Digital Assets

SF 403 would create a new Iowa Code section 12B.10D titled “Investments — digital assets and precious metals.” The bill defines “digital asset” broadly to include digital-only assets that confer economic, proprietary, or access rights, including virtual currency, cryptocurrency, stablecoins, natively electronic assets, and nonfungible tokens.

• Eligible funds: The bill would allow the Iowa treasurer of state to use public moneys from the state general fund, cash reserve fund, and Iowa economic emergency fund.
• Eligible assets: The authority would cover precious metals, stablecoins, and digital assets with a market capitalization of more than $750 billion averaged over the previous calendar year.
• Investment cap: Investments from any listed fund could not exceed 5% of that fund’s public moneys at the time of investment.
• Rulemaking: The treasurer of state would be permitted to adopt implementation rules under Iowa chapter 17A.

The bill would require digital assets acquired by an eligible fund to be held in one of three ways: directly by the treasurer through a “secure-custody solution,” on behalf of the state by a qualified custodian, or as an exchange-traded product. A qualified custodian is defined to include certain federally chartered or state-chartered banks, trust companies, depository institutions, or state-regulated companies that take custody of digital assets.

The “secure-custody solution” definition is detailed. It includes private-key controls, encrypted environments, geographically diverse secure data centers, user-access controls, multiparty governance for transaction authorization, action logging, disaster recovery, code audits, and penetration testing. These provisions appear designed to address operational custody risk without prescribing a single vendor model.

SF 403 would limit the treasurer to holding stablecoins that have received appropriate regulatory approvals from a state or the United States. The introduced text defines a stablecoin as a digital asset issued by a corporation, backed by U.S. currency or high-quality liquid assets, and redeemable on demand at par for an equivalent U.S. dollar value.

The bill would also authorize the treasurer to loan a digital asset to generate additional return for the state if doing so would not increase the state’s financial risk and if done under rules adopted by the treasurer. This is a proposed public-funds authority, not a reader-facing investment recommendation.

For taxes or fees paid to the state in digital assets, the bill draws a distinction based on asset type and size. Qualifying digital assets with market capitalization above $750 billion and stablecoins would be transferred to the general fund, with the original designated fund reimbursed in U.S. currency. Other digital assets paid to the state would be converted into U.S. currency.

SF 403 was introduced by Senator Dave Sires and referred to the Senate State Government Committee on February 20, 2025. The bill history lists a Senate subcommittee of Rozenboom, Bisignano, and Schultz on February 24, 2025. The same official bill-history page identifies HF 246 as a related companion bill; the House companion received a subcommittee passage recommendation on February 26, 2025.

If enacted, SF 403 would affect Iowa public-funds investment authority rather than private crypto activity. Its practical impact would depend on final enacted text, any treasurer rulemaking, eligible asset availability, custody arrangements, and treatment of any companion or substitute legislation.