Texas Strategic Bitcoin Reserve and Investment Act

Mike C.
May 21
2 min read

Texas is on the verge of establishing a state-managed Bitcoin reserve, following the passage of Senate Bill 21 (SB 21) by both legislative chambers. The bill now awaits Governor Greg Abbott's signature, which must occur within 20 days to become law.

🔍 Overview of SB 21: Texas Strategic Bitcoin Reserve

SB 21, officially titled the “Texas Strategic Bitcoin Reserve and Investment Act,” aims to create a special fund outside the state treasury to invest in Bitcoin and other qualifying cryptocurrencies. The reserve will be managed by the Texas Comptroller of Public Accounts, who is authorized to acquire, manage, and potentially liquidate digital assets. Investments are limited to cryptocurrencies with an average market capitalization of at least $500 billion over the previous 12 months, effectively focusing on Bitcoin.

🛠️ Key Provisions

Cold Storage Requirement: All digital assets must be stored using secure "cold storage" methods to prevent unauthorized access.
Funding Sources: The reserve can be funded through legislative appropriations, investment earnings, and donations from Texas residents.
Advisory Committee: A five-member Texas Strategic Bitcoin Reserve Advisory Committee will be established to provide guidance on investment strategies and risk management.
Transparency Measures: The Comptroller is required to publish a biennial report detailing the reserve’s holdings, valuation changes, and administrative actions.

📊 Legislative Journey

SB 21 was introduced by Senator Charles Schwertner and co-authored by Representative Giovanni Capriglione. The Texas Senate passed the bill in early March, and the House followed with a 101-42 vote on May 21. The bill now awaits Governor Abbott's decision.

🗣️ Support and Opposition

Supporters argue that establishing a Bitcoin reserve will:

Enhance the state's financial resilience.
Diversify investment strategies.
Position Texas as a leader in financial innovation.

Critics express concerns about:

The volatility and speculative nature of cryptocurrencies.
Potential market manipulation through large private donations.
The environmental impact of Bitcoin mining operations.

🔮 Next Steps

Governor Abbott has 20 days from the bill's passage to sign it into law or veto it. Given his past support for cryptocurrency initiatives, a signature is anticipated. If enacted, Texas will join Arizona and New Hampshire in integrating Bitcoin into state-level financial strategies.

For more detailed information, you can refer to the full bill text here: SB 21 Bill Text.