Texas Establishes Unique Bitcoin Reserve
Texas has made headlines by becoming the first state in the United States to create a Bitcoin reserve funded with public capital. This step was solidified with the signing of Senate Bill 21 (SB 21) by Governor Greg Abbott on June 20.
Unlike typical state treasury operations, this Bitcoin reserve will be managed independently by the Texas Comptroller of Public Accounts, bolstered by advice from a dedicated committee of three cryptocurrency investment experts. This structure aims to ensure a focus on sound investment strategies specific to digital currencies.
In a significant stipulation, only cryptocurrencies boasting a 12-month average market capitalisation exceeding US$500 billion (approximately AU$778 billion) will be considered for inclusion in the reserve. Consequently, this limitation effectively restricts the reserve primarily to Bitcoin, currently valued at a staggering US$2.07 trillion (AU$3.22 trillion)—with the potential for Ethereum to be part of the reserve in the future.
In addition to direct purchases, the new law enables the reserve to accumulate Bitcoin through various means, such as forks, airdrops, crypto donations, and investment earnings. Furthermore, to maintain transparency, the Texas government will release public reports on the reserve’s performance and holdings every two years.
Accompanying SB 21, House Bill 4488 was also signed into law, protecting the Bitcoin reserve from being absorbed into the state’s general funds. Even if the reserve does not acquire any assets by the middle of 2026, it will remain intact as a separate entity.
Emerging National Trend in Cryptocurrency Reserves
With this move, Texas becomes the third US state to establish a Bitcoin reserve, following the initiatives taken by Arizona and New Hampshire. However, it holds the distinction of being the first to allocate public funds and create a distinct structure for holding Bitcoin assets.
The legislation aligns with a broader national trend. Earlier this year, the federal government, under President Donald Trump, introduced an executive order aiming to establish a national strategic Bitcoin reserve, hinting at the possibility that states might follow suit. States such as Michigan, Ohio, and Massachusetts are now contemplating similar legislation, although some efforts in states like Florida, Oklahoma, and Georgia have either stalled or been withdrawn.
These developments signify a notable shift in how state governments are viewing and integrating cryptocurrency assets into their financial strategies, setting the stage for deeper engagement with digital currencies.
Texas’s initiative marks a pioneering step, showcasing its willingness to embrace emerging financial technologies while ensuring robust governance through expert advisory oversight.
In summary, the establishment of Texas’s Bitcoin reserve not only underscores the state’s leadership in cryptocurrency governance but also reflects a growing trend among US states to explore Bitcoin and other digital assets as legitimate components of public finance. The ongoing developments in this arena will undoubtedly be a focal point for future legislative sessions across the nation.
