According to sources, the new Texas Bitcoin Reserve law is transforming how states deal with digital assets, putting Texas ahead in using Bitcoin for public funds.
- A First-of-Its-Kind Public Bitcoin Strategy
- Arizona and New Hampshire Join, but Texas Leads
- Strategic Reserve vs. Symbolic Gesture?
- Federal Efforts
- Conclusion
- FAQs
- 1. What is the Texas Bitcoin Reserve?
- 2. Which fund is backing Texas’s Bitcoin investment?
- 3. Who signed SB 21 into law?
- 4. What is the minimum market cap required for Texas to invest in Bitcoin?
- 5. Which other states have similar Bitcoin reserve laws?
- Glossary
With Governor Greg Abbott signing Senate Bill 21, Texas now has a legal way to buy and hold Bitcoin and could invest up to $2.1 billion from its Economic Stabilization Fund.
In a landmark move, Texas has launched the Texas Bitcoin Reserve with a $10 million investment from public funds. This was made possible by SB 21, which was recently signed into law.
The legislation allows the state to consider investing up to $2.1 billion from its rainy-day fund in the future. However, any investment beyond the initial $10 million will need further approval from lawmakers
A First-of-Its-Kind Public Bitcoin Strategy
The Texas Bitcoin Reserve, approved through SB 21, gives the state the power to invest public funds into Bitcoin, as long as Bitcoin’s total market value stays above $500 billion. As there is no limit set in the law, Texas could, theoretically, invest its full $21 billion savings fund into Bitcoin.
Even though Texas might invest around 10% of its funds, or $2.1 billion, this is a big step in seeing Bitcoin as a reserve asset for the state. With the Texas Bitcoin Reserve, Texas becomes the third state in the U.S. to create a reserve like this, after New Hampshire and Arizona.
State Senator Charles Schwertner, one of the main supporters of the bill, said during the Senate debate that Bitcoin is a good way to save money for the future because it’s not controlled by anyone and there is only a limited supply of it.
Arizona and New Hampshire Join, but Texas Leads
New Hampshire also recently passed a similar law called House Bill 302, which limits Bitcoin investment to 5% of the state’s savings account. Based on recent treasury filings, this means the state can invest up to around $14.6 million in Bitcoin.
At the same time, Arizona’s plans stumbled when Governor Katie Hobbs rejected SB 1373, a bill that would have allowed the state to invest 10% of its $1.5 billion savings fund in Bitcoin.
Even though this bill didn’t pass, Arizona still has a Digital Assets Reserve fund made up of seized or unclaimed crypto, but the exact amount in that fund has not been shared.
If Arizona brings back its Bitcoin legislation, the total amount of Bitcoin held by Texas, New Hampshire, and Arizona could go over $2.3 billion. Right now, the Texas Bitcoin Reserve makes up the largest part of that total.
Strategic Reserve vs. Symbolic Gesture?
The Texas Bitcoin Reserve rules and structure suggest a long-term plan. Unlike the federal government’s Bitcoin holdings, which are largely frozen assets seized in criminal cases, the Texas program is designed to generate active returns.
The law allows the Texas Bitcoin Reserve to be carefully managed and watched over by a five-member advisory board. Though it does not currently allow activities like staking or lending to earn extra income, future changes to the law might make that possible.
Federal Efforts
In contrast, the federal Strategic Bitcoin Reserve, announced by the Trump administration, is lacking flexibility and ambition. It only holds Bitcoin taken from criminal cases, and it cannot grow unless other parts of the budget are cut to make room for new purchases.
The Federal Reserve is managed by the Treasury and U.S. Marshals, without an independent advisory board or a clear plan to actively manage the assets. The Texas Bitcoin Reserve is not just bigger, it is built to take action and be actively managed from the start.
Conclusion
The Texas Bitcoin Reserve is a serious plan for long-term financial strategy. With strong laws, expert guidance, and a clear goal, Texas is moving ahead of Washington in using Bitcoin. It might soon be recognised not only for energy and business but also for leading the way in using crypto in state finance
Summary
Texas has launched a $10M Bitcoin fund through Senate Bill 21. The law allows future investments up to $2.1B from the state’s Rainy Day Fund. Bitcoin’s market cap must stay above $500B for expansion. A five-member board will manage the fund.
Texas joins New Hampshire and Arizona in holding public crypto reserves. But unlike federal holdings, Texas plans active management. Arizona’s bill failed, while New Hampshire capped Bitcoin at 5%. Texas now leads in public crypto strategy. Its reserve could grow bigger if lawmakers approve. The move marks a bold shift in how states treat digital assets.
FAQs
1. What is the Texas Bitcoin Reserve?
A state-led Bitcoin fund launched with $10 million from public savings.
2. Which fund is backing Texas’s Bitcoin investment?
The Economic Stabilization Fund, also called the “Rainy Day Fund.”
3. Who signed SB 21 into law?
Governor Greg Abbott.
4. What is the minimum market cap required for Texas to invest in Bitcoin?
Bitcoin’s market value must stay above $500 billion.
5. Which other states have similar Bitcoin reserve laws?
New Hampshire and Arizona.
Glossary
SB 21 – New Texas law allowing crypto investment from public savings.
Rainy Day Fund – Official name: Economic Stabilization Fund, backing Bitcoin plan.
Advisory Board – a 5-member team managing the reserve’s strategy.
House Bill 302 – New Hampshire’s Bitcoin law with a 5% cap.
Public Funds – Government-held money used for the initial $10M investment.
Sources
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