The Texas Senate has approved a measure to create a state-controlled cryptocurrency reserve. This digital currency uses cryptography to secure financial transactions. Bitcoin, for example, is perhaps the best known cryptocurrency. Transactions are verified and recorded on a blockchain, an unchangeable ledger that tracks and records assets and trades. This decentralized approach replaces the need for a bank or financial institution, and has no government controls.
As the Texas Newsroom reports, the author of Senate Bill 21, Sen. Charles Schwertner, MD (R-Georgetown), represents parts of Central and East Texas, and contends, “The bill will allow Texas to diversify our investment approach, participate competitively in the evolving digital, financial economy.” The legislation would allow the state comptroller to buy, hold and manage Bitcoin and other digital assets as “a hedge against inflation and economic volatility.”
The bill also stipulates the creation of a committee that would provide investment recommendations. If the measure is approved the House, and signed by Gov. Greg Abbott, Texas would become the first state in the country to create its own cryptocurrency reserve. The Senate’s approval comes just days after President Donald Trump announced plans to create a national crypto reserve.
In a statement released Thursday by Lt. Gov. Dan Patrick it states that, “The fund will contain Bitcoin and other cryptocurrency with a market capitalization of at least $500 billion.” The statement adds that, “SB21 also authorizes appropriations into the newly created fund and can be funded through the budget.”
However, critics of SB21, including Sen. Roland Gutierrez (D-San Antonio), cautioned against supporting the bill. During debate in the Texas Senate Gutierrez cited the potential risks of allocating state funds to cryptocurrency in light of the volatile nature of the digital currency market. “When the economy is down, Bitcoin is down, and the fluctuations on this stuff is insanity.”
