Texas lawmakers have filed a bill that could make the state the first in the country to establish a government-backed cryptocurrency investment fund.
The bill’s language suggested that the state is seeking to protect its finances against future inflation and economic volatility.
While introducing the bill on Feb. 18 at the Senate Committee on Business and Commerce, Schwertner said it was getting attention from Washington and states concerned with federal spending.
Bitcoin and cryptocurrency have been steadily gaining acceptance in the United States.
President Donald Trump, who once considered Bitcoin a scam, has promised to enact crypto-friendly policies and make the United States “the world capital” of digital assets.
Trump nominated cryptocurrency advocate Paul Atkins to head the Securities and Exchange Commission and tapped former PayPal Chief Operating Officer David Sacks as his crypto czar.
With the United States operating on a $2 trillion deficit in 2024, future generations could face bankruptcy if the government can’t reduce spending, said Schwertner.
Bitcoin could be an alternative investment, similar to purchasing real estate and gold as an alternative to fiat currency—such as the U.S. dollar—that can lose value over time, he said.
While he appreciated potential federal budget cuts identified by the Department of Government Efficiency (DOGE), Schwertner said that Texas needed to protect its long-term solvency.
“It’s a message—a very clear message—to our national government,” he said. “You can’t continue to spend like this and expect our country to continue to be as prosperous as it has been in the past.”
Schwertner said 32 states were eyeing similar cryptocurrency legislation over concerns that the federal government could go broke if it doesn’t control spending.
He recommended a $21 million appropriation to seed the Texas fund.
Texas Comptroller Glenn Hegar said the U.S. Securities and Exchange Commission approved spot Bitcoin exchange-traded funds (ETFs) in January of 2024.
ETFs are a collection of assets that trades like a stock on an exchange.
“Cryptocurrency—Bitcoin, most notably—has emerged as an option for institutional investors to consider as part of a diversified portfolio,” he said.
Bitcoin or other cryptocurrency purchased using money in the reserve must have an average market capitalization of at least $500 billion over the most recent 12-month period, according to the bill.
The Bitcoin reserve fund would be an investment held outside the state treasury. The Texas comptroller of public accounts would manage the account and could hire a third-party administrator, according to the bill.
The law would also allow Texas to receive donations, grants, or gifts in bitcoin or other cryptocurrency from any public or private source.
Under the bill’s provisions, the Texas comptroller would not be permitted to transfer money in the fund to the state treasury unless authorized by the Legislature.
The bill also creates an advisory committee made up of the comptroller and several cryptocurrency investment experts, who would provide guidance on asset management and risk mitigation.
