A representative of the state of Texas has introduced a bill to limit investments in Bitcoin and cryptocurrencies by state and local authorities. The measure sets a maximum cap of 250 million dollars for investments in digital assets made by the state treasurer.
Texas proposes restrictions on investments in Bitcoin and cryptocurrencies
On March 10, Representative Ron Reynolds, a member of the Democratic Party, filed a bill to impose a limit on state investments in Bitcoin and other cryptocurrencies. The proposal stipulates that the Texas state comptroller cannot allocate more than 250 million dollars from the Economic Stabilization Fund, also known as the “rainy day fund”, to the purchase of Bitcoin or other digital assets.
Furthermore, the legislative text also provides a maximum cap for local entities: municipalities and counties in Texas will not be able to invest more than 10 million dollars in criptovalute.
If the proposal were approved and signed by Governor Greg Abbott, it would come into effect on September 1, 2025.
The context of the proposed law
The proposal by Reynolds comes a few days after the approval of the SB 21 bill by the Texas Senate, which took place on March 6. This measure aims at the creation of a strategic Bitcoin reserve, without introducing limits on purchases by the State.
The project of a Bitcoin reserve is part of a broader set of legislative initiatives recently presented in the United States. Some states are trying to adopt strategies to integrate cryptocurrencies into governmental economic and financial processes. In Texas, Lieutenant Governor Dan Patrick stated in January that one of the legislative priorities for 2025 will be precisely the creation of the Texas Bitcoin Reserve.
Political debate on the use of cryptocurrencies in the United States
It is not clear whether Ron Reynolds intends to support or limit the bill SB 21, presented by Republican Senator Charles Schwertner. However, his proposal suggests a more restrictive regulation compared to the original measure approved by the Senate.
At the federal level, even the United States government is considering similar initiatives. On March 7, former president Donald Trump signed an executive order to create a “Strategic Bitcoin Reserve” and a “Digital Asset Reserve” at the national level. However, several legal experts have raised questions about the legitimacy of an executive action to regulate cryptocurrency investments without Congress approval.
In the same days, the senator from Wyoming Cynthia Lummis reintroduced a bill to formalize the establishment of the federal Bitcoin reserve within the United States legislation.
What could be the effects of the law in Texas?
If the regulation on the limit on investments in Bitcoin were to be approved, it could have significant implications for digital assets in Texas. The state is one of the most open jurisdictions towards cryptocurrencies, thanks to the presence of advanced mining infrastructures and favorable regulations.
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A constraint of 250 million dollars on reserve funds could reduce the State’s room for maneuver to diversify its financial reserves. Furthermore, the limitation to 10 million dollars for municipalities and counties could hinder local initiatives aimed at integrating cryptocurrencies into municipal budgets.
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On the other hand, this measure would represent an attempt to contain the risks associated with the volatility of cryptocurrencies, protecting the State emergency fund from potential market fluctuations.
Conclusion
The legislative initiative filed by Ron Reynolds sets a strict limit on state and local investments in cryptocurrencies, countering the broader strategy proposed by the Texas Senate. The debate between supporters and opponents of the state Bitcoin reserve is expected to continue in the coming weeks, while other American states are studying similar measures.
It remains to be seen if this proposal will obtain the necessary support to become law and how it would influence the financial landscape of Texas.