Texas is the first state to invest public funds in official Bitcoin reserve
Texas has made history by becoming the first state in the nation to create a state-backed Bitcoin reserve using taxpayer funds. Governor Greg Abbott signed Senate Bill 21 on June 22, 2025, officially establishing the Texas Strategic Bitcoin Reserve. This move places Texas at the forefront of digital asset adoption in government finance, allowing officials to diversify the state’s financial reserves and hedge against inflation by investing in the world’s leading cryptocurrency.
The Texas Strategic Bitcoin Reserve operates independently from the general state treasury and is managed by the Texas Comptroller of Public Accounts, with oversight from a special advisory committee comprised of cryptocurrency experts. One of the key highlights of the legislation includes a commitment of public funds to purchase and hold Bitcoin as a state asset, making Texas the first state in the U.S. to make such an investment. Only cryptocurrencies with a market cap exceeding $500 billion for 12 consecutive months are eligible for inclusion in the reserve, with Bitcoin currently being the sole qualifying asset. Additionally, the reserve can grow through a variety of means, including airdrops, donations, investment proceeds, and forks. House Bill 4488 safeguards the reserve from being merged with the general revenue, ensuring its protection and sustainability.
The decision to establish the Texas Strategic Bitcoin Reserve holds significant implications for the state. Officials view Bitcoin as a digital equivalent of gold—a tool for asset diversification and protection against inflation. Alongside Texas’ reputation as a prominent player in cryptocurrency mining and a hub for blockchain companies, this move strengthens the state’s positioning in the digital finance arena. Moreover, the establishment of the reserve aligns with a federal executive order issued on March 6, 2025, which set up a Strategic Bitcoin Reserve at the national level. This marks a growing trend among states and institutions to recognize Bitcoin as a valuable public asset.
While Texas’ initiative has garnered institutional endorsement and praise, it has also sparked criticism and concerns. Some lawmakers and economists are apprehensive about exposing taxpayers to the volatility of cryptocurrencies and warn of potential risks related to cronyism. Moreover, the approach of using public funds to support the reserve could alter the demand dynamics of Bitcoin. Despite these challenges, Texas remains vigilant and adheres to strict investment guidelines to mitigate risks and ensure financial stability.
Looking ahead, attention will focus on the allocation of funds to the reserve during future budget sessions and public announcements of Bitcoin purchases. Texas’ pioneering move could serve as a model for other states exploring similar legislation, including Michigan, Ohio, North Carolina, Rhode Island, and Massachusetts. By integrating Bitcoin into state finance, Texas is leading the way in merging crypto innovation with public policy, setting the stage for broader adoption while navigating the inherent risks tied to the volatility of cryptocurrencies.
