- Texas signs SB21 into law, launching a state-managed Bitcoin reserve fund with legal safeguards.
- Only assets like Bitcoin with a 24-month average market cap of over $500B will be in the reserve.
- Texas becomes first U.S. state to commit public funds with protected Bitcoin investment rights.
Texas has officially joined the growing list of U.S. states exploring the adoption of Bitcoin. On Friday, Governor Greg Abbott signed Senate Bill 21 into law, authorizing the creation of the Texas Strategic Bitcoin Reserve. This move makes Texas the third U.S. state to approve a public Bitcoin reserve formally.
The new law allows Texas to buy, hold, sell, and manage Bitcoin under a state-managed fund. The bill describes the reserve as a hedge against inflation and economic instability. According to the legislation, the fund will operate independently from the general state treasury.
Texas Leads With Direct Bitcoin Investment
Unlike Arizona and New Hampshire, Texas has committed public funds to Bitcoin. The law grants the state comptroller full authority to manage reserve assets. An advisory committee of crypto investment professionals will offer guidance but not decision-making power.
Under the bill, only digital assets with an average market capitalization of $500 billion over a 24-month period qualify. Currently, only Bitcoin meets this threshold. The reserve can grow through multiple sources, including direct purchases, airdrops, forks, or public donations.
The institutional standards will be adhered to in terms of the security requirements of the fund. The comptroller is required to collaborate with competent custodians or liquidity providers to ensure safe storage. The legislation also mandates transparency through semi-annual performance and status reports to state leaders.
To protect the reserve from budget reallocations, Abbott also signed House Bill 4488. This law exempts SB21 from automatic legislative termination and guarantees that its revenue remains separate from general state funds.
These legal protections ensure the Bitcoin reserve cannot be dissolved by future legislatures, even if no assets are added immediately. The fund’s structure allows for long-term financial planning without interference from shifting political agendas.
States and Companies Rush to Accumulate Bitcoin Holdings
Texas joins Arizona and New Hampshire in launching crypto legislation. However, it stands out as the first to dedicate public funds and establish a legally protected, separate reserve. New Hampshire was the first to permit Bitcoin investments, but kept assets within the treasury system. Arizona formed a crypto reserve for unclaimed assets but did not fund active investment.
Meanwhile, Bitcoin adoption is growing among public companies. On Friday, Nakamoto Holdings raised $51.5 million to increase its BTC holdings. The company is led by David Bailey, a crypto adviser to President Donald Trump.
Related: Arizona Senate Approves Bitcoin Reserve Bill in Tight Vote
Paris-based Blockchain Group also added 182 BTC last week, spending $19.6 million. The firm now holds a total of 1,653 BTC. BitcoinTreasuries.NET reports that over 132 public companies now hold Bitcoin, collectively controlling 832,757 BTC.
MicroStrategy remains the largest owner, holding 592,100 BTC, worth over $60 billion. Other big players include Tesla and Marathon Digital Holdings, each holding over $1 billion worth of Bitcoin. These corporate actions have been boosted by the recent rally in Bitcoin, which reached an all-time high of $111,970.
With prices going up, companies are rushing to raise money via listings, mergers, and private deals. The flow of capital into the market is increasing with investor demand.
The move taken by Texas strengthens the trend of adoption of Bitcoin by institutions. With strong legal backing and a dedicated structure, the state signals a long-term commitment to integrating Bitcoin into public finance. Other states may follow as digital assets become more central to economic planning.
