Texas signs Bitcoin reserve bill, potential allocation size reaches $2.1 billion

If Arizona passes a similar bill, the BTC investment amount will increase to over $2.3 billion.

Source: cryptoslate

Compiled by: Blockchain Knight

Texas Governor Greg Abbott signed the "BTC Reserve Bill" (SB 21) into law on June 21, allowing the state to invest unlimited funds in BTC from the state fund.

The SB 21 bill established the strategic BTC reserve fund in Texas and allows the Comptroller to purchase BTC, provided that the asset's market value exceeds $500 billion, currently only BTC has reached this threshold.

With the signing of this proposal, Texas becomes the third state in the United States to have an official BTC reserve, following New Hampshire and Arizona, which have already established related reserves.

The bill does not impose limits on the allocation amount, which means that lawmakers can use the entire balance of the Economic Stabilization Fund (ESF). According to the annual cash report and the ESF supplemental statement released by the Comptroller, the fund holds $21 billion in cash and investments at the end of fiscal year 2024.

If lawmakers approve the maximum investment limit, Texas will become the largest holder of BTC in the public sector in the United States. If the state decides to allocate 10% of its budget for investing in BTC as envisioned by the failed bill in Arizona, Texas could invest up to $2.1 billion in BTC.

With the allocation amount from New Hampshire, the total allocation for all states could approach 2.2 billion dollars.

New Hampshire Governor Kelly Ayotte signed House Bill 302 on May 6, authorizing the financial officer to include any digital assets with a market value exceeding $500 billion into the strategic reserve.

The bill stipulates that the reserve holdings must not exceed 5% of the state's income stabilization reserve account. According to New Hampshire's latest bond issuance documents, the account amount for fiscal year 2023 is $292.5 million, with a BTC investment cap of approximately $14.6 million.

The BTC and digital asset reserve fund of Arizona was officially established on May 7 through House Bill No. 2749. The bill stipulates that unclaimed or confiscated digital assets will be deposited into the state-managed wallet, which can be used for staking or airdrops, and the proceeds will be returned to the fund.

However, as of now, there are no reports on the number of Crypto assets confiscated in Arizona.

House Bill No. 1373 failed to pass after being vetoed by Hobbs on May 12. The proposal originally allowed the Secretary of the Treasury to invest up to 10% of the Budget Stabilization Fund (BSF) in BTC after the bill took effect.

Legislative budget preparation personnel estimate that the amount of the budget stabilization fund for the fiscal year 2025 is approximately $1.5 billion, which means the potential allocation amount for BTC is close to $150 million.

Therefore, if Arizona passes a similar bill, the investment amount in BTC will increase to over $2.3 billion.