In the USA, the narrative of Bitcoin as a strategic reserve is spreading more and more: now it’s Texas’s turn.
Bitcoin: The proposed law of Texas
Yesterday, the deputy of the Texas parliament, Giovanni Capriglione, presented a bill proposing that the State establish its own strategic reserve in Bitcoin.
The HB 1598 bill proposal is expressly dedicated to the possible creation of “a bitcoin reserve within the State treasury”.
The USA is a federation of states, and Texas is one of the largest, richest, and most populated.
In fact, by area, Texas is second only to Alaska among the States of the USA, and by population, it is second only to California, with its 30 million residents.
Also for GDP, it is second only to California, with almost 2.7 trillion dollars, a figure higher than Italy’s GDP and slightly lower than that of France.
If Texas were to vote in favor of this proposal, the news could end up having a significant impact on the price of Bitcoin, especially in the medium/long term.
The Texas Strategic Bitcoin Reserve Act
Capriglione has called this legislative proposal “Texas Strategic Bitcoin Reserve Act”.
This bill proposal first states that the State of Texas should recognize Bitcoin as a digital asset of value, “with strategic potential for enhancing the fiscal resilience of the State”.
Furthermore, it also states that Bitcoin, with its limited supply, could serve as a hedge against inflation.
At that point, he says that a strategic reserve in Bitcoin could provide Texans with greater financial security.
From a strictly technical point of view, the Texas Strategic Bitcoin Reserve Act by Capriglione requests that the Texas State Treasury be allowed to hold Bitcoin, in the form of a fund (the Texas Strategic Bitcoin Reserve) of the treasury that safeguards the State’s BTC.
It also asks that this strategic reserve in BTC not be used for other purposes other than having reserve funds.
Furthermore, it requires that the BTC acquired by this fund be held for at least five years before they can be sold or used.
It doesn’t say anything, however, about the hypothetical amount of BTC it might acquire, nor specifically how it might concretely acquire them, except that it might accept donations in BTC from Texans.
The rest of the USA
Texas is not the first state in the USA that is discussing this possibility.
In fact, similar bills have already been proposed in Alabama and Pennsylvania, which, however, are smaller states than Texas (especially Alabama).
As of today, however, it appears that there is no US State that already has a strategic reserve in Bitcoin, or that has decided to create one. For now, they are still only proposals.
Perhaps, however, the USA government might be further ahead.
In fact, the elected president Donald Trump, who will take office on January 20, 2025, has already explicitly promised that he will establish a government strategic reserve in BTC.
On the other hand, the USA government already owns Bitcoin, thanks to the seizures by the Department of Justice, having almost 200,000 in their possession. Therefore, establishing a strategic reserve in Bitcoin for the new Trump administration should theoretically be very easy, because it will only require ordering that those BTC are not sold at auction, as usually happens, but placed in a fund and kept there.
Furthermore, it should not be forgotten that there is always the proposal by Senator Cynthia Lummis to add to that hypothetical fund another 200,000 BTC per year for the entire four-year duration of the new Trump administration, so as to reach owning one million (just under one twentieth of all those existing in the world).
The probabilities of successo
As for Trump’s initiative, the chances of success seem to be good. On the other hand, from a strictly technical point of view, it should be, in theory, a simple thing, even if not at all guaranteed.
Already, however, regarding the probabilities of success of the Lummis proposal, there are strong doubts.
Returning to the Texas Strategic Bitcoin Reserve Act by Capriglione, it must be said that he is a Texan deputy of the Republican Party, which is the majority party in Texas.
Therefore, his proposal HB 1598 appears to have been presented to the Texas parliament by a member of the majority, therefore in theory it could also have a good chance of success.
The same Republican Party, moreover, is precisely that of Donald Trump, so the chances that Capriglione’s proposal will be approved indeed seem good.
Note that the Texas Blockchain Council later stated that taxpayer funds would not be spent to purchase Bitcoin, and that the strategic fund would be fueled solely by donations or other already existing state sources.