Texas Governor Greg Abbott has signed Senate Bill 21 (SB 21) into law, creating the Texas Strategic Bitcoin Reserve. This new fund legally enables the state to invest in, hold, and manage Bitcoin as a strategic asset. Texas is now the third US state to establish a crypto reserve, joining New Hampshire and Arizona, but differentiates itself by creating a standalone, publicly funded Bitcoin reserve outside the traditional state treasury system.
Key features of SB 21 include:
- Creation of a dedicated fund specifically for Bitcoin holding and management.
- Limiting initial digital asset purchases to Bitcoin only, based on a 24-month average market capitalization threshold of $500 billion.
- The fund will be managed by the Texas Comptroller of Public Accounts with institutional-grade security protocols, including contracting qualified custodians and liquidity providers.
- An advisory committee will oversee operations, reporting performance twice yearly for transparency.
- House Bill 4488 complements SB 21 by providing legal protections, preventing the reserve's dissolution or absorption into general state revenues.
Motivations and potential benefits:
Texas aims to diversify state assets, hedge against inflation, and position itself as a crypto innovation hub leveraging its abundant low-cost energy resources and favorable regulatory environment. The state's involvement sends a strong signal to investors and businesses that Texas is committed to supporting digital asset innovation and attracting talent, potentially fostering economic growth related to blockchain technologies.
Challenges addressed: Volatility management, secure custody and storage, regulatory compliance, public accountability, and valuation complexities are anticipated challenges that SB 21 aims to address through structured governance, expert oversight, and transparent reporting.
This legislation aligns with a growing trend of government entities exploring digital asset adoption. It positions Texas as a pioneer in formal state-level Bitcoin investment in the United States, underscoring a shift toward recognizing Bitcoin's strategic role beyond speculation.