Texas Representative Ron Reynolds introduced legislation on March 10 to limit state Bitcoin investments. The bill caps the Texas Economic Stabilisation Fund at $250 million for crypto purchases. Additionally, local governments face a stricter $10 million investment ceiling. Reynolds, a Democrat, aims to curb potential risks tied to volatile digital assets
The proposed cap targets the Texas “rainy day” fund, which currently holds roughly $27 billion. Critics argue unchecked crypto exposure could jeopardise fiscal stability. However, proponents see Bitcoin as a hedge against inflation.
New Bill Follows Texas Senate’s Push for Unlimited BTC Reserve
Reynolds bill responds to a March 6 Senate vote approving SB 21, enabling unlimited Bitcoin reserves. Republican State Senator Charles Schwertner spearheaded the measure, aiming to position Texas as a crypto leader. Lieutenant Governor Dan Patrick earlier labelled a state Bitcoin reserve a 2025 priority.
Meanwhile, SB 21’s lack of investment limits sparked bipartisan concerns. Reynolds legislation seeks balance by imposing safeguards. The House and Senate must reconcile differing visions before September deadlines.
Local Governments Face Stricter Crypto Investment Limits
Under the Reynolds bill, cities and counties cannot exceed $10 million in crypto investments. This contrasts with the state’s proposed $250 million cap. Analysts warn smaller municipalities lack resources to manage crypto volatility.
For instance, Harris County, home to Houston, oversees a $1.2 billion budget. A $10 million cap represents less than 1% of its reserves. Still, proponents argue even modest exposure diversifies portfolios.
Partisan Tensions Emerge Over Texas Bitcoin Reserve Plans
The Reynolds bill highlights growing divides between Texas Democrats and Republicans on crypto policy. Schwertner’s SB 21 enjoyed GOP support, framing Bitcoin as an economic innovation.
However, Reynolds hasn’t clarified if his bill opposes or refines SB 21. If passed, Governor Greg Abbott could sign both measures into law by September 1. Neither the Reynolds office nor Schwertner commented publicly.
Questions Over Presidential Authority
President Trump’s March 7 executive order proposed a federal “Strategic Bitcoin Reserve,” mirroring Texas efforts. Legal experts immediately questioned presidential authority to unilaterally allocate funds.
Wyoming Senator Cynthia Lummis countered on March 11 by reintroducing a bill to codify a BTC reserve. Her legislation mandates Congressional oversight, sidestepping executive order concerns. Meanwhile, a Texas state-level clash mirrors federal debates over crypto regulation.
What’s Next for Texas Crypto Legislation?
Texas lawmakers face a September 1 deadline to reconcile competing bills. Reynolds cap could amend SB 21 or stall its implementation. Governor Abbott’s stance remains pivotal, though he hasn’t publicly endorsed either proposal.
National observers view Texas as a testing ground for state-level crypto policy. As debates intensify, other states may adopt similar investment frameworks. For now, Texas balances innovation with fiscal restraint, shaping America’s crypto future one bill at a time.
