The Texas Senate just passed Senate Bill 21 (SB-21) with a huge margin, a big step towards integrating digital assets into the state’s financial system.
The Texas Senate voted 25-5 in favor of the Texas bitcoin reserve bill which allows the state to invest public funds in bitcoin and other digital assets. The bill will now go to the Texas House of Representatives for debate before going to Governor Abbott.
Senator Charles Schwertner who introduced the bill said bitcoin could be a good hedge against inflation.
“We don’t have stacks of dollar bills and safes like we did in medieval times. What we have is digital currency,” Schwertner said during the Senate debate. He also compared bitcoin to gold, saying its limited supply can preserve value in uncertain times.
Under SB-21, the Texas Comptroller will manage the bitcoin reserve. The bill allows the state to hold digital assets with a total market cap of at least $500 billion. Right now bitcoin is the only one that meets that requirement.
Funding will come from legislative appropriations as well as donations from private individuals and corporations. The bill also creates the Strategic Bitcoin Reserve Advisory Committee which will oversee investments and issue reports every two years to ensure transparency and accountability.
Unlike other state proposals, SB-21 had bipartisan support in Texas. Many Democrats voted for it with Republicans.
Lieutenant Governor Dan Patrick strongly endorsed the bill, saying, “Bitcoin is often compared to digital gold, and with its fixed supply and decentralized structure, it stands as a key asset for Texas moving forward.”
But not everyone is convinced. Democratic Senator Roland Gutierrez is concerned about bitcoin’s volatility and wondered why public funds should be used for this investment.
“When the economy is down, bitcoin is down, and the fluctuations on this stuff is insanity,” he said. Gutierrez also raised concerns about the lack of regulation in the Bitcoin space and called this investment a gamble.
Texas’ Bitcoin reserve is coming at a time when other states like Arizona and New Hampshire are also looking into similar measures.
Some states have run into roadblocks due to fiscally conservative lawmakers, but Texas’ approach—allowing but not requiring bitcoin purchases—has made it more bipartisan.
At the Federal level, interest in state-controlled bitcoin reserves is growing too. President Donald Trump recently signed an executive order, creating a U.S. Bitcoin Strategic Reserve.
SB-21 has passed the Senate but the fight is not over. It still has to pass the Texas House of Representatives where it will face a much larger and more divided body.
The Texas House has 89 Republicans and 62 Democrats, and while many Republicans support Bitcoin-friendly policies, similar bills in other states have faced resistance from within the party.
If it clears the House and gets signed by Governor Abbott, Texas will be the first state in the US to create a bitcoin reserve. This could open the door for other states to follow and contribute to wider adoption of digital assets in public finance.
