SB 21, titled the Texas Strategic Bitcoin Reserve and Investment Act, proposes the creation of a Texas Strategic Bitcoin Reserve under the administration of the Texas Comptroller of Public Accounts. The purpose of the reserve is to invest state funds in Bitcoin and other cryptocurrencies, asserting that these digital assets can serve as a hedge against inflation and economic volatility. The legislation seeks to position Texas as a leader in cryptocurrency adoption while exploring the potential benefits of state-managed digital asset investments.
The bill authorizes the Comptroller to manage the reserve, including buying, holding, selling, and securing cryptocurrency through methods like cold storage. To ensure financial prudence, the bill limits investments to cryptocurrencies that have maintained a market capitalization of at least $500 billion over the previous 12 months. The Comptroller is also allowed to contract with third-party custodians for asset management and security. Additionally, the legislation establishes a Texas Strategic Bitcoin Reserve Advisory Committee, consisting of five members, including cryptocurrency investment experts, to guide investment strategies and risk management.
To maintain transparency, SB 21 requires the Comptroller to publish a biennial report detailing the reserve’s holdings, valuation changes, and administrative actions. The bill also includes provisions for voluntary donations of cryptocurrency to the state, as well as temporary liquidation of reserve funds for cash flow management under specific conditions. The committee substitute may introduce stricter oversight provisions, clarify fund transfer rules, and impose additional risk assessment measures to protect state resources.
Committee Substitute vs. Originally Filed SB 21 – Key Differences
The committee substitute for SB 21 retains the core framework of the originally filed bill, which establishes the Texas Strategic Bitcoin Reserve to allow the Comptroller of Public Accounts to invest in Bitcoin and other cryptocurrencies. However, several key modifications were made to clarify oversight, limit risk exposure, and refine the bill’s implementation strategy.
One of the most notable changes is the adjustment in investment oversight. While the originally filed bill granted the Comptroller broad authority to invest in Bitcoin and other cryptocurrencies, the committee substitute introduces additional safeguards, such as the requirement for an advisory committee to provide guidance on asset valuation and investment policies. Additionally, the committee substitute strengthens reporting requirements, mandating that biennial reports be published publicly and submitted to the Legislature to ensure transparency.
Another key revision involves liquidation and fund management. The original bill allowed the Comptroller to freely liquidate assets and temporarily transfer funds to the state treasury for cash management. In contrast, the committee substitute clarifies the conditions under which liquidation can occur, helping to prevent uncontrolled asset sales during periods of market volatility. Furthermore, the new version prohibits unrestricted fund transfers unless explicitly authorized by the Legislature, ensuring that state funds remain protected from misuse or excessive speculation.
Finally, while both versions limit cryptocurrency investments to assets with a market capitalization of at least $500 billion, the committee substitute emphasizes a prudent investment approach, likely to address concerns about volatility and fiscal responsibility. These refinements reflect an effort to balance innovation with accountability, ensuring that Texas does not overextend itself financially while exploring Bitcoin as a potential state-held asset.
Contact the Author
Sen. Charles Schwertner
