Texas Gov. Greg Abbott last week signed into law the Texas Strategic Bitcoin Reserve and Investment Act, establishing and funding a $10 million store of cryptocurrencies that lawmakers said will position the state for economic prosperity.
The new law places Texas in a class of its own. A handful of state legislatures have made similar proposals that would allow their governments to buy and hold bitcoin and other digital assets, and two other states — Arizona and New Hampshire — have passed legislation to create their own crypto reserves, but Texas is the first to fund one with state dollars, and leaders in Austin want the world to know it.
State Sen. Charles Schwertner, the bill’s primary sponsor, in a legislative analysis refers to bitcoin as “digital gold” and calls it a “critical asset for the future.” After the legislation’s passage last May, state Rep. Giovanni Capriglione, one of the bill’s sponsors, deemed it a “pivotal moment in securing Texas’ leadership in the digital age.”
“This asset not only strengthens our fiscal sovereignty, but positions Texas as a forward-thinking state prepared for the evolution of global finance,” Capriglione told his fellow lawmakers.
But the law comes with limits. It doesn’t prepare the state to accept bitcoin payments or otherwise integrate cryptocurrency into its finances. It’s designed purely to be a long-term investment. The state isn’t even allowed to cash out profits into its general fund. Doing that, said Bill Maurer, dean of the School of Social Sciences at the University of California, Irvine, would require amendments.
“It’s mainly a symbolic move,” said Maurer, a cultural anthropologist who studies the technologies behind financial exchanges. “One of the goals is really to say: ‘We are a state that values a certain kind of tech innovation,’ and the hope is it can attract crypto and blockchain innovators and investors to the state.”
Like the mayors who have in recent years made much racket about taking their paychecks in bitcoin or distributing cryptocurrencies to residents, Texas’ new law is designed to generate hype, Maurer said. New York Mayor Eric Adams in 2022 repeatedly bragged to the press that he would take his first several paychecks in bitcoin, only to run into legal snags that forced him to instead accept an allotment of his $258,750 annual salary in U.S. dollars and then convert it into bitcoin immediately after.
Another signal that Texas’ bitcoin reserve is symbolic is its size. To invest $10 million under a biennial budget of $338 billion is like someone with a salary of $80,000 sticking $4 in the stock market. And while Texas’ new law requires the state to review its holdings every two years, the plan, as currently written, is not to sell it.
“People really are looking at crypto these days as a kind of digital asset,” Maurer said. “I compare it more to fine art than to gold, because it’s the kind of thing that only has the value it has because the community of people involved in it are willing to pay that much for it. And there’s still not really anything you can do with it, except money laundering.”
But if Texas’ new law is the economic policy equivalent of a car dealership’s inflatable tube man, it’s an even more overt signal in the world of partisan politics.
The president, whose personal dealings in cryptocurrency now account for the majority of his net worth, has sought in recent weeks to integrate more digital assets into the nation’s economy. Mortgage lenders were asked this week to consider accepting cryptocurrency holdings when evaluating the financial status of homebuyers. And the Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS, Act, which still needs a vote by the House, would reclassify stablecoins, the more reliable cousins of volatile cryptocurrencies like bitcoin and ethereum, as payment tools rather than securities, which would unleash outcomes that no one as yet can seem to agree on.
Schwertner, the Texas bill’s primary sponsor, said in a press notice last March that it was President Donald Trump’s leadership that led him to propose the state bitcoin reserve.
“President Trump has stated unequivocally that he intends to make the United States the cryptocurrency capital of the world,” Schwertner said. “His visionary leadership on Bitcoin and digital assets has paved the way for rapid American innovation, and Texas is leading the way.”
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