Minnesota Bitcoin Act (SF 2661)

SF 2661 was framed as a finance bill. The introduced text cited the proposal as the “Minnesota Bitcoin Act” and described the act as authorizing Bitcoin payments and investments. Its central investment provision would have amended Minnesota Statutes section 11A.24 to add “Bitcoin and other cryptocurrencies” to the State Board of Investment’s list of other authorized investments. The bill defined cryptocurrency by reference to virtual currency that uses cryptography to secure transactions digitally recorded on a distributed ledger, such as a blockchain.

The payment provisions would have amended Minnesota’s electronic payments statute so state agencies could accept Bitcoin and other cryptocurrency for government services transactions. The Commissioner of Management and Budget would have contracted with one or more entities to enable agencies to accept and process electronic financial transactions, exchange cryptocurrency into U.S. currency, and accept cryptocurrency. Agencies accepting cryptocurrency could impose a convenience fee, aligned with processing costs, under the amended payment framework.

The proposal also addressed property-tax and income-tax treatment. It would have added cryptocurrency as a permissible payment form for certain property-tax receipts and delinquent property-tax payments. For tax administration, it would have treated cryptocurrency as included within “electronic means” where that term applies to tax payments governed by Minnesota chapter 289A.

Several income-tax provisions would have applied for taxable years beginning after December 31, 2025. The bill would have created subtractions for amounts of federal adjusted gross income received in cryptocurrency and would have excluded net gains attributable to cryptocurrency from Minnesota’s net investment income tax calculation. It also would have coordinated those subtractions with alternative minimum taxable income provisions.

SF 2661 reached beyond state treasury and tax mechanics. It would have added Bitcoin and other cryptocurrency to the list of investment products available through certain individual retirement account arrangements administered through Minnesota’s supplemental investment framework. It also would have amended provisions governing covered pension plans with expanded investment authority to include Bitcoin and other cryptocurrency among “other obligations” that such plans could purchase, sell, lend, or exchange, subject to the broader statutory investment structure.