Texas Joins Growing List of US States With Bitcoin Reserves

Texas has officially opened its state-managed fund for Bitcoin, with Governor Greg Abbott signing Senate Bill 21 into law Friday, establishing the state’s Strategic Bitcoin Reserve and joining two other states in the process.

The reserve enhances the state’s financial resilience by serving as a “hedge against inflation and economic volatility,” with its comptroller authorized to buy, sell, hold, or manage any investments in the reserve, its bill reads.

Governor Abbott’s signature comes a month after the Texas House of Representatives passed the legislation on May 21, despite initial opposition to the bill.

The Texas Strategic Bitcoin Reserve will operate under detailed operational guidelines. Digital assets may enter the reserve through multiple pathways: “direct purchase, a fork, an airdrop, or as a donation.” This flexibility allows the state to accumulate Bitcoin through various market mechanisms beyond simple purchases.

However, the legislation requires any eligible digital asset to maintain “an average market capitalization of at least $500 billion for the 24-month period” before acquisition, a threshold only Bitcoin currently meets.

Security measures for reserve assets would adhere to institutional standards, requiring the comptroller to “contract with a qualified custodian or a liquidity provider” for asset storage, thereby ensuring custody arrangements align with industry best practices.

An advisory committee will oversee, but the comptroller retains authority. The bill mandates transparency through status and performance reports, which should be made public and filed twice a year with state leadership.

Public Bitcoin Reserves

While Texas comes in third after New Hampshire and Arizona in exploring crypto frameworks, it is the first U.S. state to commit public funds with explicit legal protections. The reserve cannot be dissolved by future legislatures, either, even if no Bitcoin purchases happen immediately.

New Hampshire was the first to authorize public investment in Bitcoin, but it kept those assets inside the state treasury without creating a separate reserve or long-term legal protections.

Arizona, meanwhile, created a structured fund for managing unclaimed crypto, but it didn’t commit any new public funds or pursue active investment.

The legal protections for the Texas bill fall under House Bill 4488, which enables Senate Bill 21 to work as intended and ensures the Texas Strategic Bitcoin Reserve won’t be automatically abolished at the end of the legislative session, as would normally happen to new state funds.

HB 4488 legally exempts SB21 from the default sweep and protects its dedicated revenue and interest from being redirected into general state funds. In effect, it guarantees the long-term survival and financial independence of the Bitcoin reserve authorized by SB 21.

Edited by Sebastian Sinclair