Texas has officially become the third U.S. state to approve the establishment of a public Bitcoin reserve fund, with new laws allowing for direct cryptocurrency purchases. Governor Greg Abbott signed Senate Bill 21 into law on Friday, officially establishing the state’s Strategic Bitcoin Reserve Fund and placing Texas among the pioneering states in integrating digital assets into public finance.

Texas Strategic Bitcoin Reserve Fund

This reserve fund is expected to enhance the state's financial resilience by serving as an "inflation and economic volatility hedge." The state's financial controller is authorized to buy, sell, hold, or manage any investments in this reserve fund.

Senate Bill 21 (#SB21 ) was passed by the Texas House on May 21, despite initial opposition.

Texas's Strategic Bitcoin Reserve Fund will operate under detailed operational guidelines. Digital assets may enter the reserve fund through various channels: "direct purchase, fork, airdrop, or as donations." This flexibility allows the state to accumulate Bitcoin through different market mechanisms beyond mere purchasing. However, the law requires that any qualifying digital asset must maintain "an average market capitalization of at least $500 billion over a 24-month period" before acquisition – a threshold currently only met by Bitcoin.

Security measures for reserve assets will comply with institutional standards, requiring the financial controller to "contract with a qualified custodian or liquidity provider" to hold the assets, thereby ensuring custody agreements align with best practices in the industry. An advisory committee will oversee, but the financial controller retains authority. The bill also mandates transparency through reports on status and performance, which will be published and submitted biannually to state leadership.

Texas's position in the context of public Bitcoin reserve funds in the U.S.

Although Texas ranks third after New Hampshire and Arizona in exploring cryptocurrency frameworks, it is the first U.S. state to commit public funds with clear legal protections. This reserve fund cannot be dissolved by future legislatures, even if no immediate Bitcoin purchases occur.

  • New Hampshire was the first state to authorize public investment in Bitcoin, but it kept those assets in the state treasury without creating a separate reserve fund or long-term legal protections.


  • Arizona, meanwhile, has created a structured fund to manage unclaimed cryptocurrency, but has not committed any new public funds or pursued active investment.


Legal protections for the #Texas bill under House Bill 4488 (HB 4488), allow Senate Bill 21 (SB 21) to operate as intended and ensure that Texas's Strategic Bitcoin Reserve Fund will not automatically be repealed at the end of the legislative session, as often happens with new state funds. HB 4488 legally exempts SB 21 from the default sunset rule and protects its dedicated revenue and interest from being diverted into the state's general funds. In practice, it ensures the long-term existence and financial independence of the Bitcoin reserve fund authorized by SB 21.