Kansas has become the latest U.S. state to explore a formal role for Bitcoin and digital assets in public finance, with lawmakers introducing legislation that would create a state-managed Bitcoin and Digital Assets Reserve Fund.
The bill, introduced by State Senator Craig Bowser, proposes amending Kansas’ unclaimed property laws to explicitly recognize digital assets, including cryptocurrencies and virtual currencies, and to establish a framework for their custody, management, and potential sale.
If passed, the legislation would place oversight of the reserve with the Kansas State Treasurer.
Under the proposal, unclaimed digital assets, like Bitcoin, would be transferred to the state after three years of inactivity following undeliverable written or electronic communication to the owner.
There is some ambiguity around what an ‘unclaimed digital asset’ is but the bill appears to apply only to custodial digital assets held by a legally defined “holder,” such as exchanges, banks, trust companies, or other licensed custodians, not to self-custodied wallets.
Per the bill, the three-year abandonment clock begins only after written or electronic communication to the owner is returned as undeliverable, and it stops immediately if the owner shows any sign of activity, including logging in or accessing another account with the same custodian.
Unlike many traditional forms of unclaimed property, the bill allows these assets to be delivered and held in their native digital form, rather than being immediately liquidated.
The legislation also permits the state’s designated qualified custodian to stake digital assets and receive airdrops, subject to direction from the treasurer.
Any staking rewards or airdropped assets generated after three years would be transferred into the BTC and Digital Assets Reserve Fund, creating a mechanism for the state to accumulate digital assets over time.
In a notable provision, the bill prohibits BTC from being deposited into the state’s general fund.
Instead, Kansas would retain Bitcoin as part of its reserve, while directing 10% of deposits of non-bitcoin digital assets into the general fund, contingent on legislative appropriations. Supporters argue this structure treats BTC as a long-term reserve asset rather than a short-term revenue source.
States are actively pushing for bitcoin reserves
The bill also lays out how the state would handle the sale of digital assets. Cryptocurrencies that trade on established exchanges would have to be sold at market prices, while assets without active exchange listings could be sold using other commercially reasonable methods.
The goal of all this is to minimize market disruption while adding clearer guardrails around how state-held digital assets are managed.
If passed, the legislation would put Kansas alongside a growing number of U.S. states exploring how Bitcoin and other digital assets might fit into long-term financial and custodial strategies.
In recent years, state lawmakers across the country have debated whether Bitcoin could serve as a hedge against inflation, a diversification tool, or a way to modernize public finance infrastructure.