The proposed bill, known as the "Rhode Island Digital Asset Retention Act," aims to address the impact of inflation on state funds and retirement systems by allowing the state treasurer and various state retirement systems to invest in Bitcoin and other digital assets. The bill recognizes the erosion of purchasing power due to inflation and the growing acceptance of Bitcoin as a valuable asset. It authorizes the state treasurer to invest unexpended, unencumbered, or uncommitted funds from specific state funds, with a limit of 10% of the total amount in those funds during a calendar year. Additionally, it establishes guidelines for secure custody solutions and allows for the potential loaning of Bitcoin or digital assets to generate returns.

The bill introduces new legal language, including definitions for terms such as "Bitcoin," "digital asset," and "qualified custodian," and outlines the conditions under which investments can be made. It also specifies that any digital assets acquired must be held securely by a qualified custodian or in the form of an exchange-traded product. The act is set to take effect on September 1, 2025, and aims to enhance the financial resilience of Rhode Island by providing flexibility in investment strategies to respond to economic changes.