The Texas Senate Committee on Business and Commerce recently heard testimony from Pierre Rochard, Riot Platforms’ VP of Research, in support of Senate Bill 21, which proposes the establishment of a state Bitcoin reserve. Rochard highlighted the importance of this reserve in strengthening state finances during times of economic uncertainty. He emphasized Bitcoin’s verifiable ledger and capped supply as key features that differentiate it from other digital assets.
Rochard, who has been involved in Bitcoin research and open-source projects since his graduate studies at the University of Texas at Austin in 2012, explained how a state reserve could serve as a hedge against future economic downturns. He pointed out that Bitcoin’s open-source code and transparent monetary policy allow for complete auditability, contrasting it with the discretionary issuance models of other cryptocurrencies like ETH and XRP.
The proposed legislation, SB 21, would remove the previous $500 million annual cap on Bitcoin acquisitions, giving state officials more flexibility to adjust investment levels based on market conditions. It also allows for investments in other digital assets with a 12-month average market capitalization above $500 billion, a threshold currently applicable only to Bitcoin.
The Texas Comptroller’s Office would oversee the reserve, utilizing cold storage and regular audits to ensure security and transparency. Proponents of the bill, including Lieutenant Governor Dan Patrick, believe that it would diversify state assets and stimulate local economies.
Rochard argued that the reserve would provide a strategic financial safeguard for the state, enhancing its autonomy in managing fiscal matters. He also noted that other states are exploring similar measures to integrate cryptocurrencies into public finance strategies.
While acknowledging the market risks associated with Bitcoin, Rochard highlighted its unique properties that make a strong case for its inclusion in state fiscal planning. The Texas Senate Committee is set to vote on the measure in March 2025.
Overall, the proposal for a Texas Bitcoin reserve represents a growing trend among states to leverage digital assets for financial stability and autonomy. By embracing Bitcoin’s decentralized design and immutable ledger, lawmakers aim to establish a reliable financial counterbalance to traditional financial institutions.