Texas Proposes Bitcoin Reserve, Sparking Interest in Other States

On December 12, a bill was introduced to the Texas House of Representatives proposing the creation of a strategic bitcoin reserve under the state government. Other American states are developing their own versions.

#txlege #letsgo https://t.co/aupHskf1Qr

— Giovanni Capriglione (@VoteGiovanni) December 13, 2024

“Arguably, the biggest enemy of our investments is inflation. A strategic bitcoin reserve, investments in bitcoin would be a win for the state,” stated the proposal’s author, Republican Giovanni Capriglione.

The bill suggests that local authorities will form a strategic reserve by accepting taxes and donations in the first cryptocurrency. The acquired coins are planned to be held for at least five years.

“My goal is to make this bill as broad and comprehensive as possible. Initially, there will be some flexibility and options, but if I can gain the support of other legislators, we will make [the law] even stronger,” Capriglione emphasized.

The Texas bill was developed in collaboration with the nonprofit organization Satoshi Action Fund, which promotes mining and cryptocurrency-friendly regulations in the US.

State-Level Initiatives

Other American states are working on similar proposals. According to Satoshi Action Fund head Dennis Porter, at the beginning of December, at least 10 states planned to introduce bills for strategic bitcoin reserves.

I can now officially confirm and announce that 10 states will be introducing ‘Strategic Bitcoin Reserves’ legislation here in the great United STATES of America.

We are going to win with Bitcoin. We will lead the world. No one will come close. The word will follow our lead.

— Dennis Porter (@Dennis_Porter_) December 3, 2024

Pennsylvania

In Pennsylvania, a bill to create a strategic bitcoin reserve was introduced to the House of Representatives on November 14. Local officials proposed transferring about 10% of the $7 billion in government funds into bitcoin to combat inflation and for additional diversification.

“By integrating bitcoin into our reserves, we not only protect Pennsylvania from the relentless impact of inflation but also position our state as a leader in financial resilience and innovation,” emphasized the bill’s author, Republican Mike Cabell, in an interview with Fox Business.

In October, with the participation of Satoshi Action Fund, the state also passed a “bitcoin rights” law, allowing the holding and mining of the first cryptocurrency.

Florida

In Florida, plans for creating a reserve were proposed by Florida Blockchain Business Association (FBBA) President Samuel Armes.

Florida is going to launch a strategic Bitcoin reserve, and here’s how we’re going to do it ?

Florida has a very good chance of creating a strategic Bitcoin reserve this session, which starts in Q1 of 2025.

Here’s what you need to know:

The Speaker of the Florida House, Danny… pic.twitter.com/JJRNU1V7ZI

— Samuel Armes (@samuelarmes) December 3, 2024

“Florida has a very good chance of creating a strategic bitcoin reserve this session, which starts in the first quarter of 2025,” he stated.

Armes proposed using part of the $185.7 billion pension fund assets and $116.5 billion budget surplus for 2024–2025 to purchase digital gold. 

He expects support from cryptocurrency-friendly high-ranking state politicians, including Governor Ron DeSantis.

Indirect Investments

Instead of directly purchasing the first cryptocurrency, some states invest in derivative products. 

In a recent report to the SEC, Michigan authorities reported $11 million invested in the ARK 21Shares Bitcoin ETF. The state also holds about $33 million in two Grayscale Ethereum trusts. 

The Wisconsin Investment Board invested over $220 million in Bitcoin ETFs from Grayscale and BlackRock.

Federal Bitcoin Reserve

The creation of a strategic reserve of the first cryptocurrency at the federal level was one of Donald Trump’s promises during his election campaign. He proposed not selling bitcoins under US government control but making them the foundation of a future reserve. 

At the time of writing, the US government owns 198,109 BTC with a total value of $19.81 billion.

In an interview with Jim Cramer on CNBC, Trump confirmed his intentions.

“We are going to do something great with cryptocurrency. We don’t need China or anyone else. Not just China, others are adopting it, and we want to be leaders,” noted the newly elected US president.

The bill to facilitate this was introduced by Senator Cynthia Lummis. The proposal involves purchasing 1 million BTC (no more than 200,000 BTC per year over five years) using funds from the Federal Reserve’s gold reserves. 

Despite enthusiasm from many politicians, former US Treasury Secretary Lawrence Summers called the proposal “madness.” In his view, Trump intends to “reward” cryptocurrency industry participants who supported his election campaign.

The national bitcoin reserve will become a valuable geopolitical tool for the US, according to Riot Platforms’ Director of Government Relations Sam Lyman.