Texas is now legally empowered to build its own taxpayer dollar-funded Bitcoin Reserve before the federal government takes comparable measures.
Gov. Governor Greg Abbott signed Senate Bill 21 on Saturday. This is a law that expressly allows states to purchase and hold Bitcoin and other top-tier cryptocurrencies.
The measure passed extensively through the Texas House and Senate, allowing state directors to begin construction of the reserve soon.
The Trump administration recently announced the formation of a “strategic Bitcoin Reserve,” but the two policies are completely different in substance and intention.
Strategic autonomy or symbolic movement?
Supporters of the Texas bill, including Li and State Senator Charles Schwartner during Dan Patrick, frame it as a hedge against inflation and as a way to solidify Texas’ identity as a crypto national leader.
“The decentralized nature of Bitcoin and its fixed supply will make it an ideal valued storage in the long run,” Schwartner said during a floor discussion. Advocates also point to an increase in Bitcoin’s 10-year performance record and institutional adoption as a reason to allocate small but iconic slices of state rainy day funds.
The Secretary’s Office maintains and manages Texas Reservewith input from a five-person advisory committee. Funds for reserves could come from legislative budgets, investment returns and private contributions.
Significantly, the law gives state authority to actively purchase and manage Bitcoin, including holding it as an asset and strategically dispose of it.
Some supporters argue that although the bill itself does not expressly allow these features, future returns can be generated through mechanisms that burden the yield, such as staking and lending.
Federal government efforts are more constrained.
The Trump administration’s executive order to create a federal “strategic Bitcoin Reserve” has spurred comparisons, but the two initiatives have little in common beyond names.
The federal Bitcoin Reserve is fully constructed from Bitcoin seized in a criminal investigation. Under the terms of the March 6 executive order, these assets are now off limits for liquidation, but cannot be expanded unless the purchase is “budget neutral.” This means that the federal government will not buy new Bitcoin any time soon. It simply freezes what has already been seized.
Unlike Texas, federal Bitcoin Reserve has no obligation to generate independent advisory boards or returns on shares held. The custody remains with the Treasury Department and the US Former S., and surveillance remains primarily internal.
How much Bitcoin can Texas buy?
The Economic Stabilization Fund, commonly known as the “Rain Day Fund,” which is projected to hold between $24 billion and $28.5 billion in 2025, allowed Texas to allocate hundreds of millions of Bitcoin purchases without putting a risk to a financial position.
At current market prices, a 1% allocation (approximately $240-285 million) could win the state between 2,400-2,800 BTC. A more aggressive 5% allocation will introduce up to 14,000 coins, making Texas one of the largest sovereigns of global Bitcoin.
For comparison, the federal government currently has around 218,000 BTC based on recent blockchain analysis, but it all came from seizures rather than purchases.
What will happen next
With SB 21 currently in law, the Texas Secretary’s office is expected to outline implementation procedures by the end of the fiscal year. Meanwhile, the Companion Act (HB 4488) protects the reserve from being swept away by the state’s Treasury department for unrelated uses.
With Washington and Austin pursuing a path to handling Bitcoin, Texas may be the first US nation to hold cryptocurrency because it chose, not because it had to.
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