SB21

A state cryptocurrency reserve—not a $500 billion appropriation

SB21 creates the Texas Strategic Bitcoin Reserve as a special fund outside the state treasury, managed by the comptroller. It allows legislative appropriations and revenues dedicated by other laws to support cryptocurrency investments and reserve administration; it does not itself appropriate a dollar amount. Signed June 20, 2025, it took effect that day after receiving the required legislative votes. Official history; final law, Sections 1–2 and 5.

Cryptocurrency purchased with reserve money must have an average market capitalization of at least $500 billion over the most recent 24 months. That measures the cryptocurrency’s overall market size—not the state’s purchase amount, a minimum reserve balance or a guarantee of safety. The rule is not a blanket authorization to buy any cryptocurrency. final law, Section 403.704.

The reserve includes appropriated/dedicated money, qualifying purchased or received cryptocurrency, specified assets arising from blockchain splits or broad distributions to existing holders, and investment earnings, interest or rewards. The comptroller must use reasonable care, skill and caution under a prudent-investor standard that considers the whole reserve. Cash may be invested with the state treasury pool. Reasonable management costs may be paid with cryptocurrency or net sale proceeds. final law, Sections 403.701–.703.

Custody, oversight and cash management

The comptroller may contract for management and custody, including secure storage that keeps private keys offline. A qualified liquidity provider must be licensed or regulated, have audited financial statements, at least five years of digital-asset trading experience, a Texas office and registered principal, and the required certification. Derivatives—financial contracts whose value depends on an underlying asset or benchmark—may be used if the comptroller determines they serve the reserve’s best interest. Hiring a CPA for an independent audit is authorized, not required by this provision. final law, Section 403.705.

A five-member advisory committee comprises the comptroller, one member of the comptroller’s investment advisory board and three cryptocurrency-investment experts. The four appointed members serve at the comptroller’s will. Members receive no compensation or expense reimbursement for committee service. The committee advises on valuation and prudent investment policies; it does not replace the comptroller as manager. final law, Section 403.707.

By December 31 of each even-numbered year, the comptroller must publish and submit to the legislature a report covering holdings and estimated value at the end of the preceding state fiscal biennium, changes disaggregated by cryptocurrency type, and management actions. The law directs necessary implementing rules and committee appointments as soon as possible. final law, Section 403.708 and act Section 4.

Ordinary transfers back to the treasury require legislative authorization. For necessary statutory cash-management purposes, however, the comptroller may liquidate reserve assets and temporarily transfer the money. The money and any interest earned while in the treasury must be returned as soon as practicable. This is not a requirement to retain every bitcoin indefinitely. final law, Sections 403.703(f) and .706.

Beyond the reserve, SB21 broadens an exception in the Public Funds Investment Act: the relevant investment subchapter does not apply to state funds invested by the comptroller, replacing the narrower reference to investments authorized by Government Code 404.024. It does not repeal every other investment restriction for all state or local bodies. final law, Section 3.