Texas Legislature Passes Bitcoin Reserve Bill
On May 21, 2025, the Texas Legislature passed Senate Bill 21 (SB 21), paving the way for the establishment of the Texas Strategic Bitcoin Reserve. This legislation positions Texas as the third U.S. state, following New Hampshire and Arizona, to incorporate Bitcoin into its state investment strategy. The bill allows the state comptroller to manage a special fund outside the state treasury, enabling investments in Bitcoin and other approved cryptocurrencies. The reserve aims to serve as a hedge against inflation and economic volatility, reflecting Texas's commitment to embracing digital assets as part of its financial infrastructure.
SB 21 includes specific criteria to ensure prudent investment practices. Only cryptocurrencies with a 12-month average market capitalization of at least $500 billion are eligible for investment, a threshold currently met solely by Bitcoin. The legislation mandates that assets be stored using "cold storage" technology to prevent unauthorized access. Additionally, the state comptroller is authorized to engage qualified custodians and liquidity providers for operations, and the use of staking and derivatives is permitted if it benefits the reserve.
The bill received bipartisan support, passing the Texas House with a 101-42 vote. Proponents, including Representative Giovanni Capriglione, emphasized the strategic importance of digital assets in strengthening the state's fiscal resilience. Opponents raised concerns about the volatility of cryptocurrencies and the potential risks associated with public funds. The bill now awaits Governor Greg Abbott's signature to become law.
