Texas Protects Bitcoin Reserves With New Law

Texas Governor Greg Abbott has signed House Bill 4488 (HB 4488) into law, a significant move that safeguards specific state government funds, including Bitcoin reserves held externally. This legislation exempts the reserve fund and other special funds from the obligation to automatically dissolve in 2025. The bill ensures that these funds are not classified as general revenue, thereby protecting them from being used for other purposes.

The enactment of HB 4488 is part of a broader effort to bolster the state's investment strategies and promote the adoption of cryptocurrencies. The law allows residents to donate Bitcoin to the reserve, transforming state policy into a community-driven initiative. This move not only secures the state's Bitcoin holdings but also encourages public participation in the management of these funds.

Governor Abbott has yet to make a decision on Senate Bill 21 (SB21), which, if passed, would authorize Texas to invest in Bitcoin and other cryptocurrencies with a market value of at least $5,000 billion. Currently, only Bitcoin meets this threshold. The governor must sign or veto SB21 by June 22, as the bill was submitted to him on June 1. Given that the bill was introduced near the end of the legislative session, state law requires him to take action within 20 days after the session adjourns.

The passage of HB 4488 signals a growing institutional acceptance of Bitcoin, which could have broader implications for the cryptocurrency market. By protecting its Bitcoin reserves, Texas is positioning itself as a leader in the adoption of digital assets, potentially influencing other states to follow suit. This move underscores the state's commitment to innovation and its recognition of the potential benefits of integrating cryptocurrencies into its financial strategies.

Governor Abbott’s steps mirror a broader institutional trend. Hedge fund manager Eric Semler, who chairs healthcare firm Semler Scientific, has been vocal in his support of Bitcoin as a long-term investment. Semler’s firm recently increased its Bitcoin holdings, reinforcing the view that crypto is gaining ground as a store of value. His popular approach, investing in what most don’t, has paid off historically, especially in turbulent markets. Semler’s confidence in Bitcoin also echoes the sentiment of a growing number of hedge funds; recent data shows nearly half now have some crypto exposure.

The passage of HB 4488 shows that Texas is serious about protecting its crypto reserves. If SB21 follows, the state could become one of the first to officially invest in Bitcoin. Together, these two bills reflect a calculated but forward-looking approach. For investors and institutions watching from the sidelines, Texas might be the place where crypto meets government policy and gets taken seriously.