Texas Establishes State-Run Bitcoin Reserve With New Legislation

Governor Greg Abbott has officially signed Senate Bill 21 (SB 21) into law, establishing a Strategic Bitcoin Reserve for the state of Texas. The move positions Texas as the third U.S. state to approve a public Bitcoin reserve, following Arizona and New Hampshire. However, it becomes the first to create a standalone, publicly funded and managed reserve exclusively for Bitcoin.

The reserve will be managed by the State Comptroller of Public Accounts and held outside the state treasury. Its primary purpose is to serve as a long-term hedge against inflation and macroeconomic risk. The reserve may only include cryptocurrencies with a two-year average market capitalization of at least $500 billion—a benchmark that currently only Bitcoin meets.

Structure, Oversight, and Safeguards

The fund will be financed through legislative appropriations, voluntary contributions, and investment returns. All acquired Bitcoin must be held in cold storage for at least five years. Oversight will be provided by a five-member advisory committee, which includes the state comptroller and four appointed digital asset experts. The committee will release biannual public reports on the reserve’s status.

In parallel, Abbott also signed House Bill 4488 (HB 4488), which legally insulates the Bitcoin reserve from being absorbed into the state’s general revenue during routine fund sweeps. The bill also ensures the reserve’s existence remains valid, even if no Bitcoin is purchased within the first year.

According to Texas Blockchain Council President Lee Bratcher, the state is expected to invest “tens of millions of dollars” into Bitcoin under the new framework. He emphasized that while the amount may seem large, it remains modest relative to the scale of Texas’s financial operations. The decision on when and how much Bitcoin to buy will be left entirely to the professionals within the comptroller’s office, following standard investment protocols.

Implications for Other States and Digital Asset Policy

This legislation sets a new precedent by integrating Bitcoin into a state-level financial framework with formal governance, compliance, and legal protections. The move is seen as a broader signal of growing institutional recognition for Bitcoin within public finance.

More than two dozen U.S. states are currently reviewing or drafting similar proposals. Texas’s implementation could act as a model for future legislation, particularly as interest in sovereign digital asset reserves grows.

While some critics have raised concerns—including economist Peter Schiff, who pointed out that a sharp drop in Bitcoin’s market cap could limit future state purchases under the law—supporters argue the bill is a forward-looking hedge that aligns Texas with long-term shifts in global finance.

All eyes will now be on how the reserve is implemented and how it impacts broader crypto policy discussions across the United States.

State	Bill / Law	Status	Details
New Hampshire	HB 302	Signed into law (May 6, 2025)	First U.S. state with authority to invest in digital assets market‑cap ≥ $500 B (i.e., Bitcoin). Enables SBR creation, caps at 5% of public funds, effective in ~60 days.
Arizona	HB 2749	Signed into law (May 7, 2025)	Creates a reserve fund for unclaimed crypto, airdrops, staking – no taxpayer funds. Another related investment bill (SB 1025) vetoed .
Texas	SB 21	Passed both chambers, signed	Comptroller may invest public funds (market-cap ≥ $500 B) into Bitcoin; includes advisory committee and external custodians .
North Carolina	–	Pending	Draft bill would allow state treasurer investing in crypto ETFs up to 10% of pension funds .
Other States	Oklahoma, Utah, Pennsylvania, Montana, Wyoming, North Dakota	Mixed progress	Some bills passed committee (OK, UT); others stalled or died in committee .