Texas has solidified its position as a leader in the adoption of digital assets, and a key lawmaker believes Ether could be next in line for the state's crypto reserve. In June 2025, Governor Greg Abbott signed Senate Bill 21 (SB 21) into law, establishing the Texas Strategic Bitcoin Reserve. This move has made Texas the first state to commit public funds to a state-managed cryptocurrency reserve.
The reserve is designed to act as a hedge against inflation and to enhance the state's financial resilience in an increasingly digital economy. Senator Charles Schwertner, who championed the bill, sees digital assets as a strategic opportunity, not just a passing trend.
SB 21 established a special fund outside the state treasury, managed by the Texas Comptroller of Public Accounts. The fund can be financed through legislative appropriations, revenue streams, investment proceeds, and even voluntary cryptocurrency donations, although donations are restricted to Texas-domiciled individuals.
While the law currently focuses on Bitcoin, it opens the door for other cryptocurrencies to be included in the future. To qualify, a cryptocurrency must have an average market capitalization of at least $500 billion over the most recent 24-month period. Bitcoin, with its market capitalization exceeding $2 trillion, easily meets this requirement.
Schwertner has expressed interest in the potential for Ethereum to join Bitcoin in the state's reserve. He noted that if Ethereum can sustain a market capitalization above $500 billion for a continuous 24-month period, it would be a strong candidate for inclusion. Ethereum has surpassed the $500 billion mark briefly in 2021 and then intermittently from August to October 2025.
The Texas Strategic Bitcoin Reserve is overseen by the state comptroller, with guidance from a five-person advisory committee. This committee provides recommendations on the administration and management of the reserve. Furthermore, the comptroller is required to publish a biennial report on the fund's value and activities.
The passage of SB 21 was complemented by House Bill 4488, which ensures that the Bitcoin reserve cannot be swept into the state's general fund, providing further security for the state's digital asset holdings.
While SB 21 has garnered significant support, it has also faced some criticism. Concerns have been raised about the volatility of cryptocurrencies and the potential risks associated with allocating state funds to such assets. Some have even suggested that the move is more of a publicity stunt than a sound financial strategy, given the relatively small size of the initial investment compared to the state's overall budget. The initial funding for the reserve was $10 million.
Despite these concerns, proponents of the law argue that it is a crucial step for Texas to embrace the digital economy and to diversify its investment approach. They believe that cryptocurrencies can serve as a valuable hedge against inflation and economic uncertainty.
With the establishment of the Texas Strategic Bitcoin Reserve, Texas joins Arizona and New Hampshire as states that have created crypto reserves. However, Texas stands out as the first to commit sovereign taxpayer money to such an initiative. As other states consider similar legislation, Texas' experiment will be closely watched as a potential model for integrating digital assets into state financial strategies.
