June 30, 2025
By Our Correspondent
A significant turning point in state-level cryptocurrency regulation was reached when Governor Greg Abbott signed Senate Bill 21 (SB 21) into law. As part of the state’s larger financial strategy, the measure creates a special reserve that gives the Texas Comptroller the authority to purchase, sell, keep, or oversee Bitcoin.
The Act states that the reserve’s purpose is to improve the state’s budgetary resilience by serving as a “hedge against inflation and economic volatility.” Texas is now leading the way in the institutional adoption of digital assets among US states as a result of this action.
After overcoming early resistance, the bill was approved by the Texas House of Representatives on May 21.
Now that it has been enacted, Texas can start acquiring Bitcoin through a variety of methods, including donations, airdrops, forks, and direct purchases, giving the state more options for how to grow its holdings.
But as of right now, only Bitcoin satisfies the stringent requirements set forth by the legislation. No other cryptocurrency has yet to meet the requirement that a digital asset maintain an average market value of at least $500 billion over a 24-month period in order to be eligible for inclusion in the reserve.
The comptroller will have to utilize institutional-grade custody systems to guarantee security and compliance. In accordance with industry best practices, the law specifically requires that reserve assets be held through agreements with licensed custodians or liquidity providers.
The framework also includes provisions for transparency: the comptroller is required to submit to state leadership biannual reports that provide information on the reserve’s performance and status. These reports will be made publicly available.
Crucially, Texas is not the first jurisdiction to investigate frameworks connected to cryptocurrency. Prior to establishing a distinct reserve or long-term protections, New Hampshire permitted public investment in Bitcoin but retained the assets in the general state treasury. Arizona did not distribute new public funds or actively seek investment, but it did create a fund to manage unclaimed cryptocurrency.
The addition of House Bill 4488, which guarantees the Strategic Bitcoin Reserve’s survival, is what distinguishes Texas. Under normal circumstances, SB 21 would have been dissolved at the conclusion of the legislative session, but HB 4488 constitutionally shields it from that outcome. Additionally, it protects the reserve’s finances by preventing its earnings from being transferred to the state budget.
