Texas Nears Decision on Bitcoin Reserve Legislation

Texas is on the brink of becoming the third state in the United States to establish a cryptocurrency reserve, following in the footsteps of Arizona and New Hampshire. The Texas House Committee on Delivery of Government Efficiency (DOGE) has successfully advanced Senate Bill 21 (SB 21) to its final legislative stage.

Implications of Senate Bill 21

Authored by State Senator Charles Schwertner, SB 21 proposes the creation of the Texas Strategic Bitcoin Reserve, empowering the state’s comptroller to invest in cryptocurrencies with a market value exceeding $500 billion within the previous year. On Wednesday, the House Committee approved the bill with a 9-4 vote, propelling it to the final House floor vote. This legislative move follows the Texas Senate’s overwhelming approval two months prior with a 25-5 vote.

Path to Legislative Approval

Industry experts, like Pierre Rochard, CEO of The Bitcoin Bond Company, are optimistic about the bill’s passage. However, questions remain about the volume of Bitcoin Texas will acquire. Initially introduced in January as Senate Bill 778 (SB 778), the legislation was refiled as SB 21 in February, removing its $500 million annual cap on Bitcoin purchases and extending its scope to include other cryptocurrencies meeting the $500 billion threshold.

Timeline for Decision

According to Julian Fahrer, founder of Bitcoin Laws, the outcome of SB 21 is expected by June 2, coinciding with the adjournment of the Texas legislature. If the bill receives House approval, it will advance to the governor’s desk for final signing or vetoing.

The Competitive Landscape of US Bitcoin Reserves

Texas is positioning itself alongside New Hampshire and Arizona, which have already enacted similar legislation. Recently, New Hampshire Governor Kelly Ayotte signed House Bill 302 (HB 302), enabling up to 5% of the state’s public funds to be invested in digital assets, including Bitcoin and other cryptocurrencies with substantial market caps.

Arizona’s Strategic Moves

Meanwhile, Arizona Governor Katie Hobbs approved House Bill 2749 (HB 2740), establishing the state’s first crypto reserve. Although this legislation does not permit direct investments, it allows the state to manage unclaimed assets, airdrops, and staking rewards within a reserve. This marks a significant shift towards pro-crypto policies, especially following the recent veto of Senate Bill 1025 (SB 1025) due to concerns about the volatility of digital assets in retirement funds.

With Senate Bill 1373 (SB 1373) now awaiting Governor Hobbs’ decision, Arizona continues to explore its crypto strategy, excluding investments related to retirement funds.