Texas has become the first U.S. state to establish a publicly funded Bitcoin reserve, allocating $10 million to purchase the cryptocurrency. Signed into law by Governor Greg Abbott, Senate Bill 21 (SB 21) creates the Texas Strategic Bitcoin Reserve, managed separately from the state’s treasury.
Texas Makes Bitcoin History
The journey to this milestone began with Senate Bill 21, introduced to diversify Texas’s financial reserves. The bill gained momentum in the Texas Senate, passing with support from Lieutenant Governor Dan Patrick, who emphasized its role in positioning the state as a digital finance leader. Governor Abbott, a known crypto advocate, signed SB 21 into law, authorizing the Texas Comptroller of Public Accounts to manage the reserve.
This was supported by a companion bill, HB 4488, which ensures the reserve remains protected from being absorbed into the state’s general revenue, securing its independence. The fund, overseen by a five-member advisory committee of crypto experts, will only include virtual assets with a market cap of over $500 billion, currently limiting it to Bitcoin.
The process culminated in a historic $10 million allocation, with implementation set to begin by September 1, 2025. Public reports on the reserve’s performance will be issued every two years to ensure transparency.
A Crypto-Friendly Race Across States
Texas’s move follows the Trump administration’s 2024 announcement of a national crypto reserve, funded through asset seizures and crypto bonds. This federal action sparked a race among states to adopt similar policies. Arizona and New Hampshire passed Bitcoin reserve laws earlier, but Texas stands out as the first to commit public funds and create a standalone reserve.
Texas has taken a unique approach to crypto management, unlike Arizona’s focus on unclaimed crypto without new funds and New Hampshire’s treasury investments. This has led at least 24 states, including Utah, Ohio, and Illinois, to explore similar legislation. The trend highlights increasing institutional acceptance of Bitcoin as a legitimate asset, with firms like Pantera Capital predicting that state reserves could significantly boost crypto market growth by 2025.
However, not all states are on the Bitcoin-friendly page. For instance, Florida recently abandoned similar legislation, citing concerns over Bitcoin’s volatility. Skeptics, including some European Central Bank officials, warn that crypto reserves could undermine monetary stability, highlighting a divide in how governments view digital currencies.
