Texas Governor Greg Abbott Signs Bitcoin Reserve Bill Into Law

Texas Governor Greg Abbott has signed Senate Bill 21 (SB 21) into law, paving the way for the state to establish a Bitcoin reserve as part of its financial strategy. With this move, Texas becomes the third state in the US to adopt Bitcoin as a strategic asset, joining New Hampshire and Arizona, the first two states to pass Bitcoin-focused bills.

Authored by Senator Charles Schwertner, SB 21, also known as “The Texas Strategic Bitcoin Reserve Act,” aims to enable the establishment of a Bitcoin reserve outside the state treasury that the state comptroller will manage. The reserve is designed to allow the state to invest in Bitcoin and other qualifying crypto assets as a hedge against inflation, economic volatility, and to enhance overall financial resilience.

However, under the law, the assets must maintain an average market capitalization of at least $500 billion over the previous 24 months. As of now, only Bitcoin meets this criterion. Bitcoin currently sits at over $2 trillion in market valuation, per CoinGecko data. The second-largest crypto asset, Ethereum, currently has a market cap of around $277 billion. While it does not yet meet the $500 billion 24-month average required by SB 21, it could qualify for inclusion in the reserve if its market cap rises over time.

The legislation also authorizes the formation of a five-member advisory committee to guide the reserve’s management, including the comptroller and three crypto investment experts. The comptroller can contract with qualified custodians for secure storage and liquidity providers with at least five years’ digital asset trading experience.

Before being signed into law, the bill passed the Texas Senate with 25 votes in favor and 5 against, while the House approved it with 9 votes in favor and 4 opposed. The law is expected to take effect on September 1, 2025. Texas Governor already expressed support for the bill before approving it. Abbott shared an article about Texas’ move to establish a Bitcoin reserve on X on May 22, signaling that he would eventually give it a nod.

Governor Abbott also signed HB 4488, a companion bill that shields the Bitcoin reserve from periodic treasury fund sweeps and affirms its legal standing even if no Bitcoin is purchased by summer 2025. Governor Abbott on Saturday signed House Bill 4488, which aims to protect certain state funds, including SB 21 or any Bitcoin reserve created outside the state treasury, from automatic abolition.