On June 23, 2025, Texas became the first U.S. state to establish a publicly funded, stand-alone Bitcoin reserve after Governor Greg Abbott signed Senate Bill 21 (SB 21) into law. The new legislation directs the state to establish a $10 million Bitcoin reserve managed independently from the main treasury, which represents a significant difference compared to states like Arizona and New Hampshire that passed similar legislation but did not fund their reserves.
The bill was initiated by Senator Charles Schwertner, and according to Lee Bratcher, president of the Texas Blockchain Council, this investment represents just 0.0004% of the state's budget but could create an outsized impact by sending the signal to investors and entrepreneurs alike that Texas understands that the future of finance is digital. The governor also signed bill HB 4488, a companion measure that protects the Bitcoin reserve from routine fund sweeps into the state's general revenue, thus ensuring its long-term sustainability and independence. The creation of Bitcoin reserves comes with strict criteria: investments can only be made in cryptocurrencies with a market capitalisation of at least $500 billion, which currently applies exclusively to Bitcoin. The legislation will take effect on September 1, 2025, and is also known as The Texas Strategic Bitcoin Reserve Act, which enables the state to use Bitcoin as a hedge against inflation, economic volatility, and to enhance overall financial resilience.
The Texas decision fits into a broader trend as other states consider investing public funds in cryptocurrencies following President Donald Trump's announcement of a national crypto reserve. However, the federal reserve is planned to be funded solely through budget-neutral means such as seized crypto assets or issuing crypto bonds. The bill's passage signals a shift in how states are beginning to treat digital assets—not just as speculative tools, but as sovereign financial instruments worth holding long-term. While the crypto market has recently fluctuated due to geopolitical tensions, Texas has remained committed to establishing its strategic Bitcoin reserve, signalling confidence in the future of digital finance.
Sources:
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Tom Carreras
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Vivian Nguyen
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