Texas Approves Bitcoin Reserve, Leading States in Strategic Crypto Investment

By: Eliza Bennet

In a significant move towards embracing cryptocurrency, Texas has legally authorized the development of its Bitcoin reserve with the signing of Senate Bill 21. This legislative action, solidified by Governor Greg Abbott, enables the state to invest in Bitcoin using taxpayer funds. The initiative positions Texas alongside Arizona and New Hampshire, forming a trio of states with official Bitcoin reserves.

According to the bill, Texas Comptroller's office will manage the reserve with inputs from an advisory board. This legislation also permits Bitcoin acquisition as long as the market cap of the asset remains above $500 billion—a criterion only Bitcoin currently meets. The potential allocation for this reserve could vary, but projections suggest that if Texas dedicates 10% of its Economic Stabilization Fund, it could invest up to $2.1 billion in Bitcoin, making the state one of the largest public-sector Bitcoin holders in the U.S.

While Texas steps confidently into the crypto realm, the federal approach remains considerably more constrained. The Trump administration's 'Strategic Bitcoin Reserve' relies solely on Bitcoin seized from criminal activities. This federal reserve cannot currently be expanded, as acquisitions must be 'budget-neutral,' precluding immediate purchases.

As Texas takes decisive steps into the Bitcoin ecosystem, it illustrates a growing acceptance and strategic utilization of digital assets. The state's action could serve as a model for others contemplating similar measures, reinforcing the relevance of Bitcoin as a valuable state asset.