The race for digital asset reserves is heating up in the United States, with a growing number of state-level bills being launched, debated, and signed into law.
On June 20, the governor of the U.S. state of Texas signed Senate Bill (SB) 21 into law, making it the third state to sign a Bitcoin reserve bill into law—joining New Hampshire and Arizona—and the first to commit public funds and establish a separate structure for Bitcoin holdings.
This move came a day after Arizona’s state senate passed a bill to establish a fund that would be administered by the state to store and manage seized digital assets. If signed into law, it would add to a bill already signed by the state’s governor last month focused on unclaimed digital assets.
Texas reserve bill becomes law
Texas Governor Greg Abbott signed the SB 21 Strategic Bitcoin Reserve bill into law on Friday. The bill allows for the establishment of a Bitcoin reserve managed by the State Comptroller of Public Accounts and investing in select digital assets. The bill was passed a month ago by the Texas House of Representatives, which voted overwhelmingly in favor.
The legislation allows the comptroller to invest in any digital asset with a market cap above $500 billion over the previous 12-month period. The only asset that currently fits this description is BTC.
According to the bill, “bitcoin and other cryptocurrencies can serve as a hedge against inflation and economic volatility.”
The legislation also states that establishing a strategic Bitcoin reserve “serves the public purpose of providing enhanced financial security to residents of this state and providing a mechanism to receive donations of bitcoin and other cryptocurrencies.”
In terms of this latter point, the legislation specifies that digital assets may enter the reserve through multiple routes, namely: a money transfer or deposit, a gift, grant, or donation, an investment gain, derived from a fork, or via airdrop.
The comptroller will be guided in administration by an advisory committee of three digital asset investment professionals, and a public report detailing the fund’s holdings and performance will be issued every two years.
Abbott’s signing into law of SB 21 means Texas is now the third state to approve a Bitcoin reserve law, after New Hampshire and Arizona, the latter of whose legislature was also busy progressing another related bill last week, this time focused on forfeit assets.
Arizona’s Senate passes Bitcoin reserve bill
In a 16-14 vote on June 19, the Arizona Senate revived House Bill (HB) 2324, which would establish a reserve fund to store and manage seized digital assets.
The bill had previously failed a final reading in the Arizona House of Representatives in May and was returned to the Senate for amendments, according to its fact sheet. Now, after approval in the Senate, it once again goes to the House for a vote.
If passed by the House and subsequently signed into law by the state’s Governor, Katie Hobbs, HB 2324 will join legislation signed into law in May—named HB 2749—that allowed for the establishment of a reserve fund for unclaimed digital assets.
The bill revived by the state senate on Thursday would build on the previous legislation by authorizing the State Treasurer to establish the ‘Bitcoin and Digital Assets Reserve Fund’ to manage digital assets seized through criminal asset forfeiture. It would also allow the state government to invest, reinvest, and divest funds in digital assets or exchange-traded funds containing digital assets.
The legislation specifies that the first $300,000 of any forfeited digital assets would be deposited in the Anti-Racketeering Revolving Fund. The remaining balance beyond that amount would be split along the following lines: 50% to the Anti-Racketeering Revolving Fund, 25% to the state’s General Fund, and 25% to the newly established Bitcoin and Digital Assets Reserve Fund.
The bill also notes that digital assets lawfully seized for forfeiture must be secured by “gaining access to a private key, passphrase or other access mechanism, securing a digital wallet through blockchain technology or transferring the digital asset to a state-approved secure digital wallet or platform.”
In addition, any digital assets sold must be done so through state-approved digital asset exchanges or “other secure platforms” to ensure accurate valuation and transparency.
In April, two other pieces of digital asset reserve legislation were passed by the Arizona House: SB 1025, a proposal to amend Arizona’s statutes to authorize up to 10% of the state’s treasury and retirement funds to be invested in BTC and other digital assets; and SB 1373, to establish a state-level strategic digital assets reserve and allow Arizona to hold digital assets obtained through seizures or legislative allocations.
However, Governor Hobbs vetoed SB 1025 on May 2, citing concerns that “retirement funds are not the place for the state to try untested investments like virtual currency.” Ten days later, she also vetoed SB 1373, arguing that “current volatility in cryptocurrency markets does not make a prudent fit for general fund dollars.”
A federal policy
Bills to facilitate digital asset reserves have already been proposed in six more states, according to legislation tracker Bitcoin Laws, including in North Carolina, Rhode Island, Michigan, and Illinois.
This nationwide trend tows the party line set down by U.S. President Donald Trump since his inauguration in January. Since taking office for the second time, Trump has followed through on his vocal support for all things digital asset, installing crypto advocates in key regulatory positions, while defunding other regulators, and reversing so-called crypto-debanking measures.
The icing on the cake came on March 7, when Trump officially announced the creation of a strategic Bitcoin reserve through an executive order titled “Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile.“
The order introduced the idea of a strategic reserve exclusively for bitcoin and a “Digital Asset Stockpile” to be comprised of various cryptocurrencies.
Since then, Trump’s digital asset activities in the memecoin space have drawn many headlines and much criticism—primarily from democratic quarters—over the potential for conflict of interest and corruption.
Watch: Bitcoin for practical use on CoinGeek Weekly Livestream with Brendan Lee
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