According to the Legislative Budget Board (LBB), SB 1244 introduces procedures for the reporting, custody, and liquidation of unclaimed virtual currency by the Texas Comptroller. According to the Legislative Budget Board, while the bill establishes a legal framework for managing such assets, the actual fiscal impact on the state is currently indeterminable. This uncertainty stems from a lack of data on how frequently virtual currency might be abandoned, the volume of such assets, or the financial implications of holding and liquidating them.

The bill does authorize the Comptroller to contract with custodians for the safekeeping of digital assets and to deduct reasonable expenses for holding and liquidation from the proceeds of any asset sales. These sales must be conducted at prevailing market prices if the assets are listed on an exchange or by commercially reasonable methods if they are not. Net proceeds are to be deposited into the state treasury as prescribed under current law.

Although administrative costs are anticipated for implementing these new procedures, the Comptroller's office indicates that it expects to manage such costs within its existing budget authority, as outlined in the General Appropriations Act. Nevertheless, specific estimates of administrative expenditures are not available at this time.

Lastly, no significant fiscal impact is expected for local governments as a result of this legislation.

SB 1244 attempts to modernize Texas’s unclaimed property statutes by including virtual currency in the category of reportable and transferable abandoned property. While the bill is well-intentioned and seeks to align property law with technological developments, it raises substantial concerns about state overreach, fiscal uncertainty, and long-term regulatory creep.

First, the bill represents a significant policy shift by bringing virtual currency, an asset class founded on decentralization and individual control, into the domain of state oversight. Though limited to instances where the property is presumed abandoned, this expansion of the state’s authority introduces virtual assets into a framework originally designed for traditional, centralized financial instruments. This formal recognition and custodial authority could lay the groundwork for expanded state control over cryptocurrencies in the future, including new compliance burdens or taxation models that do not currently exist.

Second, SB 1244 creates a precedent that may erode financial privacy over time. While the bill limits reporting obligations to holders with full control of private keys and exempts those with partial or no access, the underlying architecture of state custody over digital assets invites further regulatory encroachment. The inclusion of virtual currency within the state’s property recovery system could normalize future efforts to impose broader surveillance, registration, or transaction-reporting mandates on individuals and businesses interacting with these technologies.

Third, the fiscal implications are unclear and potentially problematic. The Legislative Budget Board could not estimate the financial impact of the bill, noting that the frequency of virtual currency abandonment and the cost of managing such assets remain unknown. This means lawmakers are being asked to authorize a new administrative function for the Comptroller—one that might require significant infrastructure, legal oversight, cybersecurity safeguards, and third-party contracting—without a clear understanding of the cost to taxpayers. While the bill allows recovery of costs from asset liquidation, this assumes there will be sufficient volume and market value to offset expenses, a guarantee that cannot be made given crypto market volatility.

Finally, although the bill does not create an outright new agency or mandate broad compliance, it nonetheless subtly enlarges the state’s scope of authority into a space that has historically operated independently of government. By authorizing the Comptroller to hold and sell digital assets—even if in the narrow context of unclaimed property—it introduces a form of legal recognition that may later be invoked to justify far more intrusive interventions.

For lawmakers who prioritize limited government, fiscal prudence, and the protection of individual financial autonomy in the digital space, SB 1244 presents more risk than benefit. The bill's potential to serve as a foothold for future expansion of state power into decentralized finance outweighs its immediate administrative value. Therefore, Texas Policy Research recommends that lawmakers vote NO on SB 1244.

• Individual Liberty: The bill arguably enhances individual liberty by creating a pathway for rightful owners to reclaim abandoned virtual currency, just as they can with traditional assets. It affirms that digital assets deserve the same legal respect as physical or fiat-based property, thus reinforcing the idea that Texans should retain access to their assets, even in new technological forms. However, by pulling virtual currency into the sphere of state authority, even in limited circumstances, the bill opens the door to government involvement in decentralized financial systems. This risks eroding financial autonomy over time, especially if future legislatures expand this authority. For privacy-minded citizens, the idea of the state taking custody of blockchain-based assets, even if abandoned, is deeply concerning and could be viewed as an infringement on liberty.
• Personal Responsibility: The bill reinforces personal responsibility by placing the duty to report and deliver abandoned virtual currency solely on holders who have full control of the private keys. It exempts those who lack full access, recognizing that one cannot be held accountable for actions they are technically unable to perform. This respects the decentralized nature of cryptocurrency and tailors legal responsibility appropriately.
• Free Enterprise: While the bill provides regulatory clarity that may benefit some businesses (such as cryptocurrency custodians), it also introduces new obligations, specifically around reporting and delivery of assets. Over time, businesses in the virtual asset space may view these requirements as a form of creeping regulation, which could increase compliance costs or liability risks. If Texas becomes one of the first states to formalize state custody of digital assets, it may also create uncertainty or hesitation among blockchain startups or investors concerned about government overreach.
• Private Property Rights: The bill seeks to uphold private property rights by allowing for the recovery of lost or abandoned digital assets and by explicitly exempting holders who do not have access to keys, thus avoiding forced seizures. However, by allowing the state to liquidate digital assets and deposit proceeds into the treasury, it changes the nature of ownership. Once an asset is presumed abandoned and transferred, the individual loses their property in its original form and instead becomes a claimant to its cash equivalent. This transformation may not align with the expectations of digital asset owners who prize autonomy and control over their holdings.
• Limited Government: The bill marks a clear expansion of state authority into the realm of virtual currency, an area that previously existed outside direct government oversight in Texas. While the bill is narrowly constructed and avoids broad regulatory mandates, it nonetheless adds a new function to the Comptroller’s office and empowers the state to take custody, manage, and liquidate digital property. Over time, such authority could serve as the legal foundation for more expansive state intervention in the digital economy, which runs counter to the principle of limited government.