(Texas Scorecard) – Senate Bill 21, drafted by State Sen. Charles Schwertner (R–Georgetown) and signed into law by Gov. Greg Abbott on Sunday, June 20, creates the Texas Strategic Bitcoin Reserve.

The reserve will be used to diversify the state’s investments, giving the Texas comptroller discretionary power to manage the reserve separately from the general fund.

Texas joins Arizona and New Hampshire, who established their own cryptocurrency reserves in May. Texas’ initiative, however, has received more praise from cryptocurrency advocates for its built-in flexibility.

Arizona’s reserve only pertains to cryptocurrency seized by the state as unclaimed or abandoned assets or confiscated in criminal investigations. It does not allow direct investments in the reserve.

New Hampshire’s reserve limits state cryptocurrency investment to a “5 percent cap of the total amount of public funds.”

Unlike the reserves in Arizona and New Hampshire, Texas’ Bitcoin reserve has no official cap. The comptroller has the discretionary authority to buy, sell, and hold cryptocurrency.

This means that Texas has an unlimited capacity for investments in Bitcoin or other cryptocurrencies that have an “average market capitalization of at least $500 billion over the most recent 24-month period.”

This flexibility enables Texas to increase its Bitcoin reserve as a hedge against periods when the dollar’s value is volatile or, when the need arises, to dump the reserve periodically to save its investments.

President Donald Trump signed an executive order in March to create the Strategic Bitcoin Reserve and the U.S. Digital Asset Stockpile.

Both of these federal cryptocurrency reserves follow a framework of forfeiture and seizure much like Arizona’s. In addition, they are prevented from receiving direct investments.

Texas has the first fully unrestricted Bitcoin reserve in America, making it the leading Bitcoin sanctuary in the nation.