Texas Governor Greg Abbott recently made headlines by signing the “Bitcoin Reserve Bill” SB 21 into law on June 21. This groundbreaking legislation allows the state to invest an unlimited amount of money from the state’s fund into Bitcoin (BTC).
SB 21 establishes the Texas Strategic Bitcoin Reserve, which enables the Comptroller to purchase BTC as long as the asset’s market cap exceeds $500 billion, a threshold that only Bitcoin currently meets. With this new law in place, Texas has become the third state in the US to establish an official Bitcoin reserve, joining the ranks of New Hampshire and Arizona.
One of the most intriguing aspects of this bill is that there are no caps on allocations, meaning that lawmakers could potentially allocate the full balance of the Economic Stabilization Fund. The ESF closed fiscal 2024 with an impressive $21 billion in cash and investments, according to the Comptroller’s annual cash report and supplemental ESF fact sheet. If Texas were to allocate up to 10% of its budget in BTC, the state could potentially funnel up to $2.1 billion into Bitcoin, making it the largest public-sector Bitcoin holder in the US. When combined with New Hampshire’s allocation, the total state investments in Bitcoin could reach nearly $2.2 billion.
In a similar move, Governor Kelly Ayotte of New Hampshire signed House Bill 302 on May 6, which authorizes the treasurer to place any digital asset with a market capitalization above $500 billion into a strategic reserve. The statute caps holdings at 5% of the state’s Revenue Stabilization Reserve Account, with New Hampshire’s current BTC investment ceiling sitting at around $14.6 million.
On the other hand, Arizona’s Bitcoin and Digital Asset Reserve Fund was established on May 7 through House Bill 2749, directing unclaimed or seized digital assets to a state-run wallet. However, there have been no reports on the amount of crypto seized by Arizona to date. A subsequent bill, SB 1373, failed on May 12 after a veto from Senator Hobbs. This proposal would have allowed the treasurer to allocate up to 10% of the Budget Stabilization Fund (BSF) into BTC, potentially boosting the state’s Bitcoin investment to over $2.3 billion.
Overall, these recent legislative developments showcase a growing trend among states to explore Bitcoin investments as a strategic financial move. With Texas leading the way in this arena, it will be interesting to see how other states follow suit in the coming months.