Texas is getting closer to being the first U.S. state to have a bitcoin reserve. On February 27, the Texas Senate Banking Committee voted 9-0 to send Senate Bill 21 (SB-21) to the full Senate for further debate and a final vote.
If passed, the Texas bitcoin reserve bill would allow the Texas Comptroller to buy, sell and manage bitcoin as part of the state’s financial reserves.
SB-21, introduced by Senator Charles Schwertner, originally only dealt with bitcoin. But in February 2025 the bill was updated to include other digital assets. Yet, it states that the selected digital asset should have a market cap of at least $500 billion.
That change came after President Donald Trump issued an executive order on January 23 directing a federal commission to look into a national digital asset reserve.
Lawmakers say a bill has a better chance at passing if it does not mention a specific digital asset. Instead, they tend to set limitations and boundaries so bitcoin becomes the only viable choice.
The bill is designed to provide Texas with a financial buffer against inflation and economic instability. According to the bill “Bitcoin and other cryptocurrencies can serve as a hedge against inflation and economic volatility”.
If passed, the bill would set up a special investment fund outside the state treasury so Texas can have more flexibility in managing its digital assets. The fund would be made up of state appropriations, investment earnings and donations.
Many Bitcoiners believe this will benefit Texas’ economy. Pierre Rochard, vice president of research at Bitcoin mining company Riot Platforms, testified in favor of the bill.
He said Bitcoin’s transparency and auditability make it a great option for government reserves. “Public trust and financial institutions have eroded due to a lack of transparency, but Bitcoin is a unique asset because it is fully auditable,” he said.
Texas greatly supports bitcoin mining industry, and advocates say a bitcoin reserve will cement the state’s position as a leader in bitcoin adoption.
Texas isn’t the only state considering bitcoin as part of its financial plan. Over 20 U.S. states have introduced bills to allocate a portion of public funds to digital assets.
Despite the progress, the bill has hurdles. Other bitcoin reserve proposals have failed in some states. Montana, South Dakota and Wyoming have rejected similar bills citing the volatility and speculative nature of digital assets.
Critics worry investing public funds in bitcoin will expose the state to financial risks. The recent $1.5 billion hack of the ByBit exchange has raised concerns about digital asset security.
Some Republican states are also divided. While Oklahoma and Arizona have moved forward with bitcoin reserve bills, others have resisted. Montana’s bill failed and split the political support for bitcoin reserves.
Arizona just passed a measure to allow up to 10% of public funds, including pension systems, to be invested in digital assets. Utah is also working on a bill to allow up to 5% of state funds to be invested in digital assets.
If multiple states move forward with bitcoin reserve plans, it could prompt the federal government to create a national digital asset reserve itself.
Investment firm VanEck estimates if 20 states pass bitcoin reserve legislation, they could buy around $23 billion of bitcoin. Some lawmakers including Senator Cynthia Lummis have even proposed a federal plan to buy up to 1 million bitcoin over 5 years.
SB-21 will now move to the full Texas Senate where it will be debated and voted on. If the Senate passes it, the bill will go to the Texas House of Representatives for further consideration.
