Key Takeaways:
Texas lawmakers finalize SB 21, a bill proposing the creation of a Bitcoin reserve fund managed by the state comptroller.Final amendments removed staking provisions, narrowing the focus solely to spot Bitcoin holdings.Only cryptocurrencies with over $500 billion in market cap during the last 24 months are eligible — effectively limiting the reserve to Bitcoin.An advisory committee will oversee the reserve’s management, reporting its financial status every two years.Governor Greg Abbott has 20 days to sign the bill into law.
Texas’ Push Toward Crypto Integration
Texas has been steadily positioning itself as one of the most crypto-friendly states in the U.S., and the recent finalization of Senate Bill 21 (SB 21) confirms that intent. The proposed legislation aims to establish a state-run Bitcoin reserve, which lawmakers believe will help diversify Texas’ financial assets while simultaneously hedging against inflation and broader economic uncertainties.
The bill, spearheaded by Senator Charles Schwertner and backed by a coalition of pro-crypto legislators, passed its final Senate revisions and awaits the governor’s signature. If enacted, it would make Texas one of the first U.S. states to officially integrate Bitcoin into its treasury management strategy.
What the Bitcoin Reserve Bill Entails
Senate Bill 21 proposes the creation of a “Texas Blockchain and Digital Asset Reserve Fund.” Managed by the Texas Comptroller of Public Accounts, the fund would acquire and hold Bitcoin as part of the state’s asset portfolio. Lawmakers initially considered staking other cryptocurrencies as part of this reserve, but those provisions were ultimately removed in the bill’s final version to keep the focus on Bitcoin, which remains the most established and liquid digital asset.
Some of the bill’s key points include:
The reserve will be limited to digital assets with a minimum market capitalization of $500 billion over the previous 24 months.Only Bitcoin meets this criterion at present, effectively excluding other digital assets like Ethereum or Solana.The Comptroller is responsible for overseeing the reserve, while a five-member advisory committee will provide recommendations on investment policy and risk management.The state must publish a financial status report on the fund’s holdings and performance every two years.
This tight framework reflects the legislature’s cautious but optimistic approach toward integrating crypto assets into public finance.
The Decision to Drop Staking
One of the most significant changes made during the final Senate discussions was the removal of staking from the bill’s provisions. Earlier drafts included language that would have allowed the state to participate in crypto staking protocols to earn passive income on its holdings. However, lawmakers ultimately decided this would introduce unnecessary complexity and regulatory risk.
Staking, while profitable in many cases, involves additional custody and network participation obligations that might conflict with the state’s current regulatory framework. By narrowing the bill to spot Bitcoin holdings only, Texas legislators aim to minimize operational risk while still embracing blockchain technology at the treasury level.
The Political Strategy Behind SB 21
Texas’ interest in Bitcoin aligns with broader trends among U.S. states seeking to reduce dependence on inflationary fiat currencies and traditional financial instruments. Proponents of the bill argue that Bitcoin’s fixed supply and decentralized nature make it an ideal hedge against inflation and systemic risks in global markets.
Moreover, Texas has ambitions of becoming a crypto innovation hub. By adopting forward-thinking legislation and incorporating Bitcoin into state-level financial strategies, the state is attempting to attract crypto-related businesses and investments, particularly as other states and countries adopt more restrictive stances on digital assets.
It’s also a strategic political move. At a time when the federal government remains cautious about Bitcoin ETFs and crypto banking services, Texas’ proactive steps position it as a counterbalance to federal skepticism. If successful, the Bitcoin reserve could provide a template for other U.S. states to follow.
What Happens Next
Governor Greg Abbott, known for his supportive stance on cryptocurrency and blockchain innovation, now has 20 days to either sign the bill into law or veto it. Given Abbott’s track record, the bill’s supporters are optimistic it will be signed without issue.
If enacted, the reserve could begin accumulating Bitcoin as early as the end of 2025. It would make Texas one of the first states globally to officially hold Bitcoin as part of its treasury operations, alongside countries like El Salvador.
The success of this initiative could spur other states to consider similar moves, especially as concerns over inflation and fiscal policy stability continue to loom in the U.S.
More News: Texas Proposes Strategic Bitcoin Reserve Amid Push for Crypto Sovereignty
