- Several US states have rejected Strategic Bitcoin Reserve proposals in the past month due to volatility concerns during a period when Bitcoin dropped 22% from its January peak.
- Texas Senate Bill 21 has passed the state’s Banking Committee with unanimous support and now moves to the full Senate for further debate.
- The Texas proposal would create a reserve for cryptocurrencies, with market capitalisations over US$500 billion and would operate outside the state treasury for investment flexibility.
- While Texas progresses with its reserve plans, nearly 30 states have proposed similar initiatives with mixed results as Utah and Arizona advance while Montana recently voted against such measures.
A Strategic Bitcoin Reserve (SBR) was the talk of the town around the time when Donald Trump took office. And while Senator Cynthia Lummis introduced plans for a strategic reserve at the federal level, several US states made similar proposals.
Texas Bill Moves to State Senate for Further Deliberation
But it turns out many of these initiatives have received pushback, as four reserve bills failed in the past month.
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Montana, North and South Dakota, as well as Wyoming all rejected a strategic reserve including crypto. Most of the lawmakers that decided against such a reserve said that the volatility of crypto was a major concern for them.
Those concerns come at a time when Bitcoin is down 22% from its all-time high in January and most other major cryptos also suffered double-digit losses.
It’s not all bad news, though, as Texas is making progress with regard to an SBR.
Texas Senate Bill 21 (SB-21) passed the Senate Banking Committee on February 27 with an encouraging result – nine votes for and zero against a strategic reserve.
The bill, introduced by State Senator Charles Schwertner, is now moving to the Texas Senate for further debate.
Only Assets With $500 Billion market Cap Considered Under Bill Proposal
SB-21 proposes the creation of the Texas Strategic Bitcoin Reserve, a fund designed to operate outside the state treasury to allow for flexible investment strategies in major cryptocurrencies, specifically those with a market cap over US$500 billion (AU$802 billion).
The bill would authorise the Texas Comptroller to manage the reserve, including buying and selling assets, and calls for oversight through third-party administration, independent audits and an advisory committee to guide investment decisions.
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Texas could become the first state to include crypto in its state treasury, even as other states reject similar ideas. Out of close to 30 US states proposing a Bitcoin or crypto reserve, several are dropping out of the race.
Montana just voted 41 for and 59 against a reserve bill deemed “too risky”, while Utah and Arizona are progressing in their efforts.
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