Texas Becomes First State to Fund Official Bitcoin Reserve

Texas Governor Greg Abbott signed Senate Bill 21 (SB 21) into law, creating the Texas Strategic Bitcoin Reserve, a special fund held outside the state treasury and managed by the Texas Comptroller.

Overview

According to the bill’s language, the newly created reserve functions separately from Texa’s general treasury and is designed to enhance the state’s financial stability while acting as a possible safeguard against inflation. This makes Texas the first US state to commit public funds—up to $250 million from the Economic Stabilisation Fund—to purchasing and holding Bitcoin (BTC) as a long-term strategic asset.

The legislation empowers the Comptroller to buy, hold, and sell BTC, leveraging its position as a hedge against inflation and economic volatility. An advisory committee, composed of the Comptroller, a member of the investment advisory board, and three crypto-investment experts, will guide the fund’s strategy.

Key Guardrails: Market Cap Thresholds and Protections

SB 21 restricts investments to cryptocurrencies whose average market capitalisation exceeds $500 billion over the past 24 months—currently, this criterion applies only to BTC. The fund can accumulate assets through forks, airdrops, investment returns, or public donations.

Additionally, Governor Abbott concurrently signed House Bill 4488, which explicitly safeguards the BTC Reserve—and other dedicated funds—from being swept into the general revenue pool. This ensures the fund’s autonomy even if BTC purchases are delayed.

State-Level Financial Innovation with National Context

Texas trails behind New Hampshire and Arizona in approving BTC reserve frameworks but differs in explicitly allocating public money for BTC purchases. New Hampshire’s earlier bill permits purchases but lacks direct public funding, while Arizona’s approach allows a fund without public appropriation.

Texas’s move dovetails with a broader national trend: In March 2025, President Trump issued an executive order to establish a federal Strategic BTC Reserve using government-held BTC. By diversifying reserves and bolstering financial resilience, the Lone Star State aims to cement its reputation as a tech innovation hub and leading crypto policy pioneer.

Texas’s establishment of a state-backed Bitcoin reserve—supported by direct public funding and protected by law—is a historic milestone in US state governance. While it reflects growing confidence in Bitcoin’s long-term role as an inflation hedge, it also introduces new governance challenges, such as volatile market dynamics, custody security, and public accountability.