Texas House Passes Strategic Bitcoin Reserve Bill SB 21, Awaits Governor’s Approval

On May 21, 2025, the Texas House of Representatives passed Senate Bill 21 (SB 21), the “Texas Strategic Bitcoin Reserve and Investment Act,” with a 101-42 vote, marking a significant step toward establishing a state-managed Bitcoin reserve. Introduced on February 12, 2025, by State Senator Charles Schwertner, the bill now awaits Governor Greg Abbott’s signature. If enacted, Texas would join New Hampshire and Arizona as one of the first U.S. states holding Bitcoin as a strategic reserve asset, reinforcing its position as a hub for cryptocurrency innovation.

Legislative Journey and Key Provisions

SB 21 authorizes the creation of the Texas Strategic Bitcoin Reserve, a special fund separate from the state treasury, enabling Texas to directly invest in Bitcoin and other approved cryptocurrencies. The bill grants the State Comptroller full authority over the reserve’s management, including acquisition, custody, staking, and potential liquidation of digital assets. Key provisions include:

• Only cryptocurrencies with an average market capitalization exceeding $500 billion over the past 12 months are eligible for purchase.

• Assets must be secured using “cold storage” to prevent unauthorized access.

• The state may contract with qualified custodians and liquidity providers for operational support.

• Staking and derivatives may be utilized if beneficial to the reserve.

• Funding can come from legislative appropriations, donations from Texas residents, or investment returns.

While the reserve operates independently, the State Comptroller may temporarily liquidate assets for state cash management under limited circumstances. The bill underscores its public purpose, stating, “The establishment of a strategic Bitcoin reserve serves the public purpose of providing enhanced financial security to residents of this state.”

A Growing Trend Among U.S. States

Texas’s move is part of a broader wave of state-level efforts to integrate Bitcoin into public finance. According to BitcoinLaw, New Hampshire led the way on May 6, 2025, with House Bill 302, which permits up to 5% of certain public funds to be invested in Bitcoin and other digital assets with a market cap above $500 billion. Arizona followed on May 7 with House Bill 2749, authorizing its State Treasurer to custody unclaimed digital assets, including Bitcoin, staking rewards, and interest, with up to 10% of non-Bitcoin assets transferable to the state’s general fund upon legislative approval. However, Arizona’s law does not permit direct investment activities. Other states, including North Carolina and Montana, are also advancing similar Bitcoin reserve proposals, signaling a competitive push among U.S. states to embrace digital assets.

Governor’s Stance and Legislative Process

SB 21 cleared the Texas Senate earlier this year and passed its second reading in the House on May 20, 2025, before securing final approval this week. Lee Bratcher, President of the Texas Blockchain Council, noted in an interview with The Block that the concept of a Bitcoin reserve has been in development since 2022, with advocates collaborating closely with lawmakers to position Texas as a leader in cryptocurrency adoption. Bratcher expects the bill to reach Governor Abbott’s desk within one to two weeks and anticipates his signature, given Abbott’s pro-crypto stance.

Governor Abbott has long championed Bitcoin and blockchain innovation. In a 2022 interview, he expressed his vision for Texas as a premier jurisdiction for cryptocurrency, stating, “Understand this, and that is when Texas engages in legislation, we don't want to be over-regulatory. We're kind of anti-regulation, but we want to provide an infrastructure to make sure that blockchain and bitcoin will be able to succeed.”

While Abbott has not publicly confirmed his intent to sign SB 21, his track record and Texas’s blockchain-friendly regulatory environment suggest a favorable outcome. The governor has 20 days to sign or veto the bill once received; if no action is taken, it will automatically become law on the next business day.

Next Steps and Implications

If signed into law, the Texas Strategic Bitcoin Reserve could strengthen the state’s financial diversification strategy, leveraging its $2.7 trillion economy—the second largest in the U.S.—to embrace digital assets. The move aligns with Texas’s ongoing efforts to foster blockchain innovation, supported by the Texas Blockchain Council and the state’s favorable regulatory framework for crypto businesses. Bratcher predicts a cautious initial approach, with an estimated starting investment in the tens of millions of dollars. However, the reserve’s long-term strategy, including investment standards, will depend on decisions by the State Comptroller’s Office.