Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at how Texas have launched a State-funded Bitcoin reserve.
Texas Launch State-Funded Bitcoin Reserve
The United States state of Texas have joined two other states in officially opening their state-managed fund for Bitcoin. Last Friday Governor Greg Abbott signed the Senate Bill 21 into law, which establishes the state's Strategic Bitcoin Reserve. The reserve will allow the state to enhance their financial resilience while also acting as a "hedge against inflation and economic volatility." The Texas Comptroller of the reserve, Glenn Hegar, is allowed to buy, sell, hold, and manage any investments into the reserve, according to the bill.
The state-funded Bitcoin reserve is the first of its kind in the country and means Texas have joined Arizona and New Hampshire in moving toward on-chain finance. The difference with the bill in Texas is that it creates a standalone reserve fund entirely separate from the state treasury. The signing of the bill into law comes a month after the Texas House of Representatives passed the legislation on May 21.
The Texas Strategic Bitcoin Reserve will operate under detailed operational guidelines and means digital assets can enter the reserve through multiple pathways. These include:
- direct purchase
- a fork, an airdrop
- a donation
Given the level of flexibility in the bill, it means the state can accumulate Bitcoin through various market mechanisms beyond simple purchases. The legislation also requires any eligible digital asset to maintain "an average market capitalization of at least $500 billion for the 24-month period" before acquisition, a threshold only Bitcoin currently meets. The author of the bill, Senator Charles Schwertner, stated earlier this year:
“We can buy land, we can buy gold; I think the state of Texas should have the option of evaluating the best performing asset over the last 10 years.”
There is another companion bill, known as HB 4488, which further shields the Bitcoin reserve from being raided during the state’s routine fund reallocations and secures its legal status regardless of when, or if, Bitcoin is purchased. The comptroller would also be required to "contract with a qualified custodian or a liquidity provider" for asset storage for security to ensure custody arrangements align with industry best practices.
The bill comes at a time when other U.S. States have been abandoning their efforts to establish a strategic Bitcoin reserve. Back in May Florida was the latest to drop their legislation, meaning they joined other states such as Wyoming, South Dakota, North Dakota, Pennsylvania, Montana, and Oklahoma. Arizona also saw their House Bill 1025, which had advanced further than any other similar bill nationwide, vetoed on May 3 by Governor Katie Hobbs.
https://x.com/Bitcoin_Laws/status/1936520317696127325
Have a great day.
Peace. CryptoGod-1.
Referral Links and Follow Me:
