Texas could soon become one of the first states to incorporate cryptocurrency like Bitcoin into its financial strategy after the Texas House on Wednesday advanced a bill that would create a state-managed crypto reserve.
Senate Bill 21, introduced by Republican Sen. Charles Schwertner of Georgetown, would authorize the state comptroller to buy and manage cryptocurrency in addition to more traditional investments. The reserve would be funded through state-budget allocations and donations from private citizens and corporations. The House passed the measure on a vote 101 to 42.
“This reserve not only strengthens our fiscal sovereignty, but positions Texas as a forward-thinking state prepared for the evolution of global finance,” said Rep. Giovanni Capriglione (R-Southlake) on Wednesday.
The bill requires the state’s cryptocurrency reserve to undergo regular third-party audits, with the results reported to the state legislature every two years. The Texas Senate passed the bill in March, setting the stage for it to head to Gov. Greg Abbott’s desk for approval.
Supporters say crypto could help shield the state’s money against inflation and market swings. Among them is Brian Morgenstern, director of public policy at Riot Platforms – one of the largest Bitcoin mining companies in the U.S. – and a board member of the Texas Blockchain Council.
“Bitcoin is now one of the most valuable assets in the world,” Morgenstern said. “Short-term volatility is significantly outweighed by the longer-term track record of this asset.”
According to SB 21, the state can only use money from the reserve to buy cryptocurrency with an average market capitalization of at least $500 billion over the past 24 months. This means Texas would only be allowed to invest in large, established cryptocurrencies like Bitcoin and possibly Ethereum, depending on market conditions.
A few weeks ago, New Hampshire officially became the first state to pass its own bitcoin reserve bill into law. And earlier this year, President Donald Trump announced the creation of a national crypto reserve.
