Texas Bitcoin Reserve Advisory Committee Named

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The Texas Strategic Bitcoin Reserve is beginning to take shape.

Acting Texas Comptroller Kelly Hancock (R) recently announced the appointment of advisory committee members for the Texas Strategic Bitcoin Reserve, the government-created cryptocurrency fund established by Senate Bill 21 (SB 21) during the 89th Legislative Session (2025). SB 21 was a legislative priority of Lt. Governor Dan Patrick (R). The Comptroller’s office also issued a Request for Proposals (RFPs) seeking a qualified firm to provide custody and liquidity services for the reserve.

The Comptroller’s announcement marks the next stage in implementing SB 21. With the advisory committee now named and the procurement process for custody and liquidity services underway, the Texas Strategic Bitcoin Reserve is beginning to take shape.

For Texas Policy Research (TPR), that implementation process underscores the same concerns that led us to oppose the legislation as it was being deliberated by lawmakers. SB 21 did not simply authorize the state to hold Bitcoin. It created a new government-managed financial structure involving outside vendors, custody arrangements, liquidity services, public reporting requirements, security protocols, an advisory committee, and ongoing management of cryptocurrency assets held on behalf of the state.

Those details matter because they show the reserve is not a passive or symbolic policy gesture. It is an active state program, and the concerns surrounding taxpayer exposure, cryptocurrency volatility, custody risk, and the proper role of government remain just as relevant now as they were when SB 21 was debated.

Texas Strategic Bitcoin Reserve Advisory Committee Begins Work

Under SB 21, the Texas Strategic Bitcoin Reserve Advisory Committee is composed of five members: the Comptroller, one member of the Comptroller’s Investment Advisory Board appointed by the Comptroller, and three members with expertise in cryptocurrency investments appointed by the Comptroller.

The committee’s role is to advise the Comptroller regarding the administration and management of the reserve. That includes recommendations for valuing assets held in the reserve and establishing prudent investment policies related to the reserve’s objectives and asset allocation.

According to the Comptroller’s announcement, the appointed members include Laurie Dotter, Jamie McAvity, Carla Reyes, and Gary A. Vecchiarelli. Their backgrounds include investment management, Bitcoin mining, digital asset law, accounting, public company leadership, and financial services.

Hancock framed the committee around transparency, security, and financial controls, saying the advisory committee brings together the expertise needed to help the state carry out the reserve carefully, responsibly, and in the best interest of Texas taxpayers.

That is the right standard to invoke, but it does not answer the central policy question.

The concern is not merely whether the advisory committee members have relevant experience. The deeper concern is whether Texas should have created a taxpayer-backed cryptocurrency reserve at all.

Texas Bitcoin Reserve RFP Shows A New Government Function

The Comptroller’s RFP makes clear that implementation of the Texas Strategic Bitcoin Reserve will require more than simply buying and holding Bitcoin.

The RFP seeks custody and liquidity services on behalf of the Texas Treasury Safekeeping Trust Company. The selected contractor would be expected to help implement the reserve, assist with the transition of assets currently held in the iShares Bitcoin Trust ETF to direct Bitcoin holdings, provide custody services, ensure assets are held in the name of the State of Texas, provide security controls, support required reporting, assist the advisory committee, and provide legislative support when requested.

The RFP also contemplates a secondary service provider for redundancy and contingency purposes. In addition, the selected vendor would be responsible for building and maintaining a public-facing website for the reserve, including information about reserve holdings, valuation, and educational materials explaining Bitcoin and the purpose of the state reserve.

In other words, SB 21 did not merely authorize a financial asset. It created an ongoing state activity.

Once government creates a new reserve, it must also create a system to manage that reserve. That means procurement, contracting, vendor oversight, cybersecurity, reporting, website development, staff support, advisory committee coordination, and legislative interaction. Supporters may describe that as responsible implementation. TPR views it as confirmation that SB 21 expands the scope of state government into a space better left to private individuals, private institutions, and the market.

SB 21 Created A Government-Run Cryptocurrency Reserve

SB 21 established the Texas Strategic Bitcoin Reserve as a special fund outside the state treasury. The Comptroller has custody of the reserve and is responsible for administering and managing it.

The reserve may consist of appropriated money, dedicated revenue, Bitcoin or other qualifying cryptocurrency purchased with reserve funds, cryptocurrency received through forks or airdrops, and investment earnings or rewards. The law also allows the Comptroller to acquire, exchange, sell, supervise, manage, or retain investments under a prudent investor standard.

That structure is central to TPR’s objection.

Texas does not need a state-operated cryptocurrency reserve to support innovation, protect financial freedom, or encourage the development of digital assets. Those goals are better served by protecting the right of individuals and private businesses to own, mine, trade, custody, and transact in cryptocurrency without unnecessary government interference.

There is a liberty-minded argument for Bitcoin. There is a strong case for allowing Texans to use decentralized financial tools. There is a legitimate concern about inflation, federal monetary policy, and the risks of overcentralized financial systems. But none of that requires the State of Texas to purchase, hold, and manage cryptocurrency on behalf of taxpayers.

Private adoption of Bitcoin is not the same thing as government management of Bitcoin.

Texas Taxpayers Face Cryptocurrency Volatility

One of TPR’s chief concerns with SB 21 is taxpayer exposure to cryptocurrency volatility.

Bitcoin may be a valuable financial innovation. It may continue to grow as a decentralized asset. It may serve as a hedge for some investors under certain market conditions. But it remains volatile, and its value can fluctuate significantly based on market sentiment, liquidity conditions, regulatory actions, institutional flows, technological developments, exchange failures, macroeconomic changes, and broader investor behavior.

When private individuals choose to hold Bitcoin, they voluntarily accept that risk. When the state creates a Bitcoin reserve, taxpayers are pulled into that risk whether they asked for it or not.

SB 21’s supporters argued that Bitcoin and other cryptocurrencies can strengthen the state’s financial resilience and serve as a hedge against inflation or economic volatility, but the existence of potential upside does not erase downside risk. Government should not treat speculative asset exposure as a substitute for fiscal restraint, limited government, or sound budgeting.

Texas does not lack financial strength because it has too little Bitcoin. Texas faces fiscal challenges when state government spends too much, creates new programs, expands long-term obligations, relies on budget gimmicks, or fails to return surplus dollars to taxpayers through structural tax relief.

A state Bitcoin reserve does not solve those problems.

Bitcoin Custody Creates Real Operational Risk

The RFP’s extensive custody and cybersecurity requirements show that the state is aware of the risks involved in holding cryptocurrency directly.

The selected contractor will need to address cold storage, private key generation and storage, encryption, audits, penetration testing, physical security, transaction controls, role-based access, multifactor authentication, disaster recovery, business continuity, insurance, and protections against insider threats.

Those requirements are not excessive. They are necessary if the state is going to hold digital assets, but their necessity illustrates the problem.

A state-run Bitcoin reserve introduces operational risks that do not exist with ordinary state cash management. Private keys can be lost or compromised. Vendors can fail. Subcontractors can create vulnerabilities. Cybersecurity systems can be breached. Employees or insiders can make mistakes. Market disruptions can create liquidity problems. Even with strong controls, digital asset custody is not risk-free.

The RFP attempts to manage those risks. It does not eliminate them.

Taxpayers are therefore exposed not only to Bitcoin’s price volatility, but also to custody risk, vendor risk, cybersecurity risk, liquidity risk, and implementation risk.

That is a lot of risk for a state program that does not need to exist.

Texas Bitcoin Reserve Oversight Is Not Enough

SB 21 does include oversight provisions. The advisory committee is intended to provide expertise. The Comptroller must publish a biennial report that includes the amount of Bitcoin and other cryptocurrency held in the reserve, an estimated monetary value, changes in holdings and value, and actions taken to administer and manage the reserve.

The Comptroller may also contract with a certified public accountant to perform an independent audit of the reserve. Those provisions are preferable to no oversight at all, but they do not resolve the core concerns.

The advisory committee only advises. It does not control the reserve. Its appointed members serve at the will of the Comptroller. The reserve itself exists outside the state treasury. The Comptroller retains broad authority over administration and management. Third-party vendors will perform essential functions, and taxpayers will be left relying heavily on executive discretion, vendor competence, and after-the-fact reporting.

That is not the same thing as limited government.

Government programs often begin with promises of accountability, transparency, and careful management. But the more fundamental question should be asked before the program is created: Is this a proper function of government?

In the case of the Texas Strategic Bitcoin Reserve, TPR’s answer remains no.

Bitcoin Freedom, Not State Control

TPR’s opposition to SB 21 should not be confused with opposition to Bitcoin, cryptocurrency, or financial innovation.

Texans should be free to own Bitcoin. Texans should be free to self-custody digital assets. Texas businesses should be free to mine, transact, invest, and build in the cryptocurrency space. Policymakers should resist central bank digital currencies, protect financial privacy, and prevent unnecessary state interference with lawful digital asset activity.

That is the pro-liberty approach, but there is a clear difference between protecting the freedom of Texans to use Bitcoin and having the state government purchase and manage Bitcoin with public resources.

One approach limits government and empowers individuals. The other expands government and exposes taxpayers to speculative risk.

Texas can be a national leader in financial freedom without creating a taxpayer-backed cryptocurrency reserve. In fact, the best way to lead is by ensuring that government does not crowd out private innovation, distort markets, or turn emerging financial technologies into another state-managed program.

Texas Strategic Bitcoin Reserve Remains A Taxpayer Gamble

The Comptroller’s announcement marks an important step in the implementation of SB 21. The advisory committee has been named. The procurement process for custody and liquidity services is underway. The administrative machinery of the Texas Strategic Bitcoin Reserve is being assembled.

That may be expected under the law, but it should not be treated as harmless.

The state is now committing time, attention, vendors, contracts, reporting systems, security protocols, and public resources to a government-run cryptocurrency reserve. Supporters may view that as bold and innovative. TPR views it as unnecessary and inconsistent with limited government. Texas should not gamble taxpayer resources on speculative assets. It should not create new state functions to manage cryptocurrency. It should not place taxpayers in the position of absorbing risks that private investors voluntarily choose for themselves.

If Texas wants to lead on Bitcoin and digital assets, it should do so by protecting individual liberty, private property, free enterprise, and financial privacy. It should reduce barriers to innovation, not create a government-managed investment vehicle. SB 21 moved Texas in the wrong direction by creating the Texas Strategic Bitcoin Reserve. The Comptroller’s latest announcement shows that the reserve is now taking shape.

TPR remains opposed to its creation and continues to believe that taxpayers should not be forced into a state-run cryptocurrency experiment.

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