Texas is moving forward with its plan to establish a state-controlled Bitcoin Reserve, as Senate Bill 21 (SB 21) is set for its second reading in the Texas House on Tuesday, May 20, 2025.
The bill has already cleared several significant hurdles, passing the Senate with a strong 25-5 vote and making it through a House Committee with a 9-4 vote. If approved in the House, the bill will proceed to the governor for final approval.
NEW: 🇺🇸 Texas #Bitcoin Reserve bill will have its Second Reading in the House today.
America is embracing Bitcoin 🙌 pic.twitter.com/Ma7TGUNiev
— Bitcoin Magazine (@BitcoinMagazine) May 20, 2025
What the Bitcoin Reserve Bill Proposes
SB 21 would establish Texas’s Strategic Bitcoin Reserve, a dedicated fund under the control of the state Comptroller. This fund would utilize donations and earnings from cryptocurrency activities such as staking and airdrops.
The legislation includes specific requirements: only cryptocurrencies that have maintained a market capitalization above $500 billion for at least one year would qualify for inclusion in the reserve. Currently, only Bitcoin meets this threshold, though Ethereum could potentially qualify in the future if its market cap increases.
The bill also mandates robust security measures, requiring all Bitcoin and other digital assets to be stored in cold storage (offline wallets) to protect against hacking. Only licensed financial companies would be authorized to custody the cryptocurrency for Texas.
Institutional Support Growing
The Bitcoin Reserve bill comes amid increasing institutional acceptance of the cryptocurrency. According to FXStreet, JPMorgan Chase announced on Monday that it would allow clients to buy Bitcoin, marking a significant step for the largest US bank. While clients can purchase Bitcoin through JPMorgan, the bank will not custody the asset but will reflect the holdings in client statements.
JPMorgan’s move follows Morgan Stanley’s decision to offer access to spot Bitcoin ETFs to eligible clients since August 2024. These developments, along with policy changes under the current administration, indicate a positive outlook for Bitcoin’s institutional adoption.
Strategic Importance
The Texas Bitcoin Reserve represents more than just acceptance of cryptocurrency—it signals the state’s intention to hold Bitcoin as a long-term investment. Supporters believe Bitcoin can help protect the state’s financial resources from inflation and economic instability, potentially strengthening Texas’s financial position during challenging economic times.
If the bill passes, Texas would become only the third U.S. state to officially hold Bitcoin in a reserve, following Arizona and New Hampshire. As one of the nation’s largest and most influential states, Texas’s decision could have significant ripple effects across the country.
Time is of the Essence
Time is running short for the bill’s passage, as the Texas legislative session is scheduled to end within two weeks. This means lawmakers must act quickly if they want to see this bill become law.
The crypto industry is watching developments closely. Dennis Porter, CEO of the Satoshi Action Fund, has described this as a significant development and believes that if Texas moves forward with the reserve, other states may follow suit.
Market Impact
While these positive developments unfold, Bitcoin’s price has stabilized around $105,200 as of Tuesday, approximately 4% below its all-time high of $109,588. The institutional demand for Bitcoin remains strong, with U.S. spot Bitcoin ETFs continuing to see positive inflows.
Broader Implications
If SB 21 becomes law, Texas would join the early adopters of government-held Bitcoin reserves globally. This could potentially encourage more investment in cryptocurrency and might prompt other U.S. states to implement similar policies.
Texas is positioning itself as a leader in cryptocurrency adoption, and if successful, this initiative could fundamentally change how governments worldwide view and interact with digital currencies.
The outcome of today’s second reading will be a crucial indicator of whether America’s second-largest state is ready to embrace Bitcoin as a strategic reserve asset, potentially setting the stage for a new era in state financial management.
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