The Texas Senate has passed a new bill that will create a state-managed Bitcoin reserve. This move occurred shortly after President Trump declared the future creation of a US crypto reserve.
Senate Bill (SB) 21 was written by Republican Senator Charles Schwertner and aims to allow the Texan comptroller to purchase, hold, and control a Bitcoin reserve (as well as other cryptocurrencies and digital assets)to hedge against economic volatility and inflation. This crypto reserve will be funded by donations from citizens and businesses as well as legislative appropriations.
The bill will also allow the creation of an advisory committee that will provide investment advice for the comptroller. Once it becomes law, Texas will be the first state that has its own crypto serve.
According to Schwertner, “This bill will allow Texas to diversify our investment approach, participate competitively in the evolving digital, financial economy and leverage the benefits of Bitcoin and other cryptocurrencies.”
Crypto is enjoying increasingly mainstream adoption in the US, with many sectors embracing crypto as a form of payment and investment. The healthcare, retail, real estate, and entertainment industries have all incorporated cryptocurrencies and blockchain in their operations. Notably, the country’s iGaming sector has taken the lead, allowing gamblers to deposit and withdraw using cryptocurrencies, which adds a layer of privacy that other online platforms can’t match (source: coinpoker.com/crypto-casino). With this adoption of crypto, it is no surprise that local governments are realizing the benefits of digital currencies.
The proposed Texas crypto reserve will undergo external audits, the reports of which will be released annually to the state legislature. The bill received favor from 25 Senate legislators, with only five voting against it. It will next be passed to the House for further consideration.
Before approval in the Senate, the bill resulted in a discussion between Schwertner and Senator Roland Gutierrez. The latter had concerns about the volatility of Bitcoin and other cryptocurrencies, highlighting the risks of allocating state funding to digital assets. Gutierrez said of the matter, “When the economy is down, Bitcoin is down, and the fluctuations on this stuff is insanity.” He continued to claim that cryptocurrency is used unregulated, which Schwertner refuted by stating that crypto is regulated by blockchain technology that records all transactions on a public ledger.
Despite opposition, the majority fast-tracked the process by voting not to read the bill a third time. This third reading is usually the final step before a bill can move to the Texas House for further discussion.
A second bill was also introduced to the state government, HB 4258. This reserve bill grants the comptroller the ability to invest a much as $250 million in Bitcoin and other crypto assets.
