The Strategic Bitcoin Reserve bill has passed the Texas House of Representatives with an overwhelming 101-42 vote, marking a significant milestone in cryptocurrency adoption at the state level. Following New Hampshire's lead earlier this month, Texas is positioned to become just the second U.S. state to establish an official crypto reserve. Additionally, the legislation—officially titled the "Texas Strategic Bitcoin Reserve and Investment Act"—has already cleared both legislative chambers, with the Senate previously approving it by a 25-5 margin.

In fact, this development carries substantial economic weight considering Texas boasts the second-largest economy in the United States with a $2.7 trillion GDP in 2024—ranking as the eighth-largest economy globally if it were an independent country. The bill permits the state comptroller to invest specifically in cryptocurrencies maintaining a market cap above $500 billion over the previous 12 months, a criterion currently met only by Bitcoin. If approved by Governor Abbott, this texas strategic bitcoin reserve would create a special fund outside the state treasury, potentially establishing a new model for us states strategic bitcoin reserve adoption while serving as a fiscal hedge against federal debt concerns.

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Texas House Passes Strategic Bitcoin Reserve Bill

The Texas Strategic Bitcoin Reserve and Investment Act has made substantial progress through the state legislature, marking a significant step toward establishing a first-of-its-kind cryptocurrency fund in the Lone Star State.

Bill SB 21 Clears House with Key Amendment 101 - 42

On Wednesday, May 15, the Texas House of Representatives approved Senate Bill 21 on its third and final reading with a strong bipartisan majority of 101-42. The vote demonstrated considerable support across party lines, though opposition did grow between readings. During the second reading just one day earlier, the bill had received even stronger backing with 105 votes in favor and only 23 against. Notably, the final House vote occurred without debate over the merits of state investment in cryptocurrency assets.

A crucial development during its passage through the House was the implementation of a key amendment. The requirement for a digital asset to be eligible for investment was significantly increased, extending the necessary market capitalization threshold of $500 billion from the previous 12-month period to 24 months. This change aims to ensure even more stringent criteria for state investment in volatile assets.

Representative Giovanni Capriglione, who sponsored the bill in the House, framed the legislation as "a pivotal moment in securing Texas's leadership in the digital age". The measure authorizes the creation of a special fund outside the state treasury, allowing direct investment in Bitcoin and other qualifying cryptocurrencies.

Senate Must Concur with House Amendments

Before reaching the House floor, SB 21 had already secured overwhelming approval in the Texas Senate on March 6, with senators voting 25-5 to advance the legislation. The bill, authored by Senator Charles Schwertner, was clearly prioritized by Senate leadership.

However, due to the amendment introduced by the House regarding the 24-month market capitalization requirement, SB 21 must now return to the Senate. The Senate will need to concur with this amended version for the bill to be truly "cleared" by both legislative chambers. If the Senate approves the House's changes, the bill will then proceed to the Governor's desk. If the Senate does not concur, the bill would typically go to a conference committee to work out the differences.

The strong margin in both chambers reflects growing interest among Texas lawmakers in positioning the state at the forefront of cryptocurrency adoption and financial innovation. Nevertheless, the increased opposition during the House's final reading suggests some legislators harbor concerns about the state's potential entry into crypto markets.

Governor Abbott's Signature Awaits Final Legislative Step

Once SB 21 successfully clears the Senate's concurrence vote, it will then head to Governor Greg Abbott's desk for final approval or veto. Although Governor Abbott has not yet officially indicated his intentions regarding the bill, his previous statements and positions suggest a favorable outcome is likely.

Governor Abbott has expressed enthusiasm for cryptocurrency in the past, making him more inclined to support the measure than governors in some other states who have rejected similar legislation. Should Abbott sign the bill into law, Texas would join New Hampshire as only the second state to establish an official cryptocurrency reserve. The legislation requires the comptroller to submit a report every two years to the legislature detailing the reserve's holdings and any changes, providing transparency for this innovative financial approach.

When will Governor Abbott sign the SB21 Texas Strategic Bitcoin Reserve bill?

The timeline for Governor Greg Abbott's signature on Senate Bill 21 now hinges on its final legislative step: the Senate's concurrence with the amendment made by the House. Once the Senate formally re-approves the bill with the updated 24-month market capitalization requirement, it will then be officially sent to the Governor's desk for his action.

Assuming the Senate moves to concur relatively soon, and the bill is then presented to Governor Abbott on or before the 89th Texas Legislative Regular Session's scheduled adjournment on June 2, 2025, a specific timeframe will apply. If the bill reaches his desk within the final 10 days leading up to adjournment, Governor Abbott would then have 20 days (counting Sundays) from the date of the legislative session's final adjournment (June 2, 2025) to either sign it into law, issue a veto, or allow it to become law without his signature. This means a decision on SB 21 would be expected by approximately June 22, 2025.

While this provides the maximum allowable timeframe, it's also entirely possible for Governor Abbott to sign the bill much earlier once it formally reaches his desk. Governors often sign bills well in advance of their deadlines, especially for legislation they support or have championed. Given his previously expressed enthusiasm for cryptocurrency, an earlier signing of SB 21 is a distinct possibility, signaling swift support for Texas's strategic move into digital asset reserves, once it completes its final legislative hurdle.

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What Does the Texas Strategic Bitcoin Reserve Do?

Senate Bill 21 establishes a unique financial mechanism that positions Texas at the forefront of cryptocurrency adoption in the United States. The legislation creates a framework for operating what could become one of the nation's most significant state-level digital asset reserves.

Reserve managed by state comptroller

The Texas Strategic Bitcoin Reserve operates as a special fund outside the state treasury under the custody and management of the state comptroller. This structure provides greater flexibility in investment decisions compared to traditional state funds. The comptroller possesses broad authority to acquire, sell, and manage cryptocurrency holdings, essentially functioning as the chief investment officer for this innovative financial instrument. Furthermore, the reserve will receive funding through multiple channels including legislative appropriations, dedicated revenue sources, private donations from Texas residents, and cryptocurrency holdings accumulated through purchases, airdrops, and forks.

Only cryptocurrencies with $500B+ market cap eligible

SB 21 includes strict requirements regarding which digital assets qualify for investment. Primarily, any cryptocurrency purchased must maintain an average market capitalization of at least $500 billion over the most recent 12-month period. Currently, Bitcoin stands as the only cryptocurrency meeting this threshold, consequently making it the exclusive focus of the reserve initially.

The new amendment extends this requirement to an average market capitalization of at least $500 billion over the most recent 24-month period.

Currently, Bitcoin stands as the only cryptocurrency meeting this extended threshold, consequently making it the exclusive focus of the reserve initially. This updated and more rigorous requirement means that other major digital assets, such as Ethereum (currently fluctuating around a $300B+ market cap), would become investable only after they not only surpass $500 billion in market capitalization but also maintain that average for a full 24 consecutive months. This effectively puts a significant hurdle for any altcoin to be included, ensuring the state invests only in highly established and consistently dominant digital assets, further mitigating volatility concerns.

Cold storage and third-party custodians required

Security remains a paramount concern for the strategic Bitcoin reserve. Accordingly, the bill mandates robust protection measures, including the use of "cold storage" technology to prevent unauthorized access. The comptroller must develop policies and protocols ensuring secure storage and protection of all digital assets. Additionally, the legislation authorizes contracting with qualified, independent, United States-based third-party cryptocurrency entities to assist with security operations, including qualified custodians who employ secure custodial technologies.

Staking and derivatives permitted under conditions

Despite its conservative approach to eligibility, the bill allows for sophisticated financial strategies. The comptroller may use derivatives and engage in staking of qualifying digital assets when deemed beneficial to the reserve. However, these activities come with specific conditions - staking is permitted only if the state treasury retains legal ownership of the digital asset and uses a third-party solution. Moreover, the bill authorizes the comptroller to loan digital assets acquired as investments, potentially generating additional revenue streams for the state.

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How Texas Compares to Other States on Crypto Reserves

Texas joins a growing movement of states exploring cryptocurrency reserves, though results across the country have been mixed. The Lone Star State's progress represents a rare success in an arena where many similar efforts have failed.

New Hampshire passed similar bill in May

New Hampshire became the first state to establish a crypto reserve when Governor Kelly Ayotte signed House Bill 302 into law on May 6, 2025. This groundbreaking legislation authorized the state treasurer to invest up to 5% of public funds in cryptocurrencies and precious metals. Yet, while New Hampshire secured the title of first state to create a Strategic Bitcoin Reserve, Texas could potentially become the first to actually fund one.

Arizona and Florida efforts failed due to vetoes

In Arizona, a similar measure made significant progress before ultimately failing. The "Arizona Strategic Bitcoin Reserve Act" (SB 1025) passed both legislative chambers but was vetoed by Governor Katie Hobbs in early May. In her veto letter, Hobbs stated that "Arizonans' retirement funds are not the place for the state to try untested investments like virtual currency". Likewise, Florida withdrew two bills (House Bill 487 and Senate Bill 550) from consideration at the end of their legislative session on May 3. Both would have allocated up to 10% of specific public funds to cryptocurrency assets.

Montana and other states cite volatility concerns

Montana's Bitcoin reserve proposal, House Bill 429, was defeated in February by a 59-41 vote in the state House. Critics labeled Bitcoin as too risky for state reserves, with Representative Bill Mercer stating, "I did not come here to give the Board of Investment discretion to invest in non-fungible tokens and cryptocurrencies". Similar reserve proposals have also been rejected in Wyoming, North Dakota, South Dakota, Oklahoma, and Pennsylvania. Primary concerns centered around cryptocurrency volatility and potential risks to taxpayer funds.

47 bills introduced across 26 states

Currently, 47 strategic Bitcoin reserve bills have been introduced across 26 states according to Bitcoin Laws. Among these, bills in 20 states remain active in the legislative process. The widespread interest demonstrates a growing trend toward sovereign Bitcoin reserves, particularly after President Trump issued an executive order calling for the creation of a federal crypto stockpile. This legislative momentum suggests that regardless of individual outcomes, state-level cryptocurrency reserves could become an enduring feature in American financial policy.

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Texas Strategic Bitcoin Reserve: Awaiting Final Legislative Hurdle

The Texas Strategic Bitcoin Reserve bill marks a pivotal moment for state-level cryptocurrency adoption, positioning Texas among pioneers like New Hampshire. Despite strong bipartisan support for the Texas Strategic Bitcoin Reserve and Investment Act, its journey isn't over.

The bill now faces a critical step: returning to the Senate for concurrence. This is due to a key House amendment that extended the market capitalization requirement for eligible digital assets to a 24-month average of $500 billion. This change, making only Bitcoin initially investable, significantly raises the bar for other cryptocurrencies like Ethereum to qualify, ensuring highly stringent investment criteria.

Given Texas's economic might (eighth-largest global economy if independent), this legislative decision holds substantial weight. Other states are likely watching closely as Texas navigates this precedent-setting move. While challenges like volatility remain, the bill's robust security measures and strict investment rules aim to mitigate risk. The Texas Strategic Bitcoin Reserve is poised to become a significant case study in how governments integrate cryptocurrency into traditional financial systems for years to come.

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