Texas is the third U.S. state to initiate a Strategic Bitcoin reserve.
Governor Greg Abbott has signed Senate Bill 21 (SB 21), officially establishing a state-run Strategic Bitcoin Reserve in Texas. This groundbreaking ruling aligns Texas with Arizona and New Hampshire, leaders in incorporating digital assets into public financial strategy.
The new legislation represents a significant step toward the widespread adoption of cryptocurrencies and enhanced leadership in incorporation at the state level.
Established via SB 21, the Texas Strategic Bitcoin Reserve will be overseen by the State Comptroller of Public Accounts and will not be housed within the conventional state treasury. Its primary aim is to act as a safeguard against inflation and economic fluctuations while bolstering the financial resilience of the state. Investment eligibility is restricted to cryptocurrencies that have averaged a market cap of at least $500 billion over the past two years—currently, only Bitcoin meets this criterion.
Funding, management, and legal protections
The reserve will be financed by legislative appropriations, voluntary contributions, and returns on investments. According to legal requirements, any Bitcoin that has been obtained must be kept in cold wallets for at least five years. A five-member advisory committee, consisting of the state comptroller and experts in digital assets, will oversee the fund. Every two years, this committee will issue public reports concerning the reserve.
Governor Abbott signed House Bill 4488 (HB 4488) alongside SB 21, which safeguards the Bitcoin reserve and similar funds from being absorbed into the state’s general revenue fund. This legal protection guarantees the reserve’s independence and integrity over the long term.
Outlook and impact on other states
Texas is the first state in the United States to create a reserve dedicated solely to Bitcoin that is fully autonomous and funded by public resources, as reported by CoinGape. The initiative has garnered extensive backing from the crypto industry, yet some detractors, including economist Peter Schiff, have cautioned about potential limitations. Schiff indicated that should Bitcoin’s market cap fall below the necessary threshold, the state might face legal restrictions on new purchases.
In spite of such worries, this action is regarded as part of a wider trend. Currently, over 24 U.S. states are contemplating analogous laws. The courageous undertaking in Texas could set a precedent, motivating other states to regard Bitcoin as a legitimate part of public finance rather than merely a speculative asset. With the evolution of the digital financial landscape, Texas is now in the spotlight.
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