KEY POINTS
- If the bill passes, Texas residents will be allowed to 'voluntarily donate Bitcoin' to the reserve fund
- The bill states that Texas will not be allowed to sell or convert its $BTC reserves for at least 5 years
- Texas is widely recognized as a pro-crypto state and it has been attracting Bitcoin miners for years
Texas has become the second-mover in U.S. states moving toward a strategic Bitcoin reserve after Republican State Rep. Giovanni Capriglione introduced a bill to establish a BTC reserve within the Texas state treasury.
The move comes about a month after GOP Pennsylvania Rep. Mike Cabell introduced a similar bill, becoming the first state in the country to take a step toward investing in Bitcoin for strategic reserve purposes.
Key Provisions in the Bill
The bill, which Capriglione introduced to the House Thursday, seeks to establish a Bitcoin reserve within the state's treasury and also details how the BTC funds will be managed.
- Purpose – The reserve will allow Texas to own BTC as a financial asset and it will also be a way "for Texans to voluntarily donate Bitcoin to promote a shared ownership and community investment in Texas's financial future."
- Custody – The Comptroller will be in custody of the funds held in the reserve and he will be responsible for ensuring that the reserve is secure and well managed at all times.
- Donations – The Comptroller will be allowed to accept gifts, grants or donations in Bitcoin from Texas residents or a government entity as defined by Section 2252.001 of the Government Code.
- HODL Period – The state's BTC reserves will be stored for at least five years from the date the digital currencies enter the state's custody. Once the mandatory period ends, the Bitcoin may be sold, moved, appropriated, or converted into other cryptocurrencies upon the Comptroller's directive.
- Reporting – The Comptroller is required to provide biennial (taking place every two years) reports about the Texas state's Bitcoin reserve.
Capriglione officially filed the bill during an X Spaces with Dennis Porter, the founder of nonprofit Satoshi Action Fund (SAF).
"My goal is to make this bill as big and as broad as possible," he said, adding that the bill's introduction is the first step in allowing "some optionality and flexibility on it, but if I am able to get support from other legislators, we will make it even stronger."
Texas – The Pro-Crypto State
The Lone Star State has been on lists of the most pro-crypto states in the country over the years. It is known for its pro-innovation regulations and has become a hotbed for Bitcoin miners.
Joelle Azwat, CPA and technical account manager at Web3 financial data lake TRES, previously projected in an exclusive with IBT that she believes Texas and Wyoming are "strong contenders for second-mover status" in terms of state Bitcoin reserve introductions.
"With the state's significant energy sources, it could consider Bitcoin as hedge against inflation or a way to diversify its state funds," she said.
Pennsylvania and Texas's move toward establishing their own strategic Bitcoin reserves comes as U.S. President-elect Donald Trump returns to the White House with a promise of supporting Bitcoin and the broader crypto space.
He has also floated the idea of a national BTC reserve, reiterating the importance of a HODL strategy when it comes to holding the world's largest crypto.
