TEXAS — In December 2025, Texas became the first state to have a cryptocurrency reserve with a $5 million investment in Bitcoin. Also, in June 2025, Texas allowed precious metal backed IRAs (Individual Retirement Accounts) through the only state-backed bullion depository in the nation.

The IRA’s are backed through a third-party (in this case Lone Star Tangible Assets and in collaboration with Equity Trust Company) and are backed by the value of precious metals in the current marketplace, insuring the investment will be backed with gold, silver, platinum or palladium, according to the TXDB website. The precious metals themselves are stored at the Texas Bullion Depository, which allows citizens to securely store their precious metals in a secure and tightly-monitored facility, located in Leander, Texas. 

Along with the IRA, the state passed a bill that would allow precious metals as legal tender, along with the ability to have a precious metal backed debit card in the near future. 

Meanwhile, Bitcoin, whose founder is unknown, was created as a decentralized digital currency. The peer-to-peer nature of “mining” the currency has been criticized by environmental groups, saying that the electrical consumption is larger than some countries’ entire output. 

Texas is the first state in the U.S. to invest in cryptocurrency but not the first government entity in the world to do so. El Salvador, the first country in the world to adopt Bitcoin as a viable currency before revolking it, currently has $670 million worth of Bitcoin assets, according to the latest reports.

Texas is backing two different kinds of alternatives to the U.S. dollar, but why?

According to acting Texas Comptroller Kelly Hancock, the cryptocurrency is a placeholder investment and a way to diversify Texas’ assets.

“The Texas Legislature passed a bold mandate to create the nation’s first Strategic Bitcoin Reserve. Our goal for implementation is simple: build a secure reserve that strengthens the state’s balance sheet. Texas is leading the way once again, and we’re proud to do it,” Hancock said in a statement published in The Texas Tribune.

The investment has not been without its critics. John Griffin, a finance professor at the University of Texas at Austin who specializes in research on cryptocurrencies, commented on what he believes is hypocrisy on the part of the state when it comes to investing in cryptocurrency.  

“It’s also backwards to our values in Texas. Basically, you have a conservative legislature saying, ‘We want less government,’ and yet here’s a case where you are wanting or encouraging government to speculate and possibly prop up an asset class,” Griffin said in an interview with the Dallas Morning News.

On the other side of the theoretical investment coin is Texas’ backing of precious metals. Since the signing of the International Development Association Appropriations Act of 1975, the United States has allowed private ownership of precious metals, but several states have slowly started accepting precious metals as currency once more.

Hancock visited the Texas Bullion Depository in July and praised the fiscal potential that precious metals have for Texans, according to a release from the Comptroller website.

“The Texas Bullion Depository is a one-of-a-kind facility that reflects our state’s commitment to innovation, security and fiscal leadership. From safeguarding retirement investments to pioneering new ways Texans can use gold- and silver-backed legal tender, Texas is leading the nation in precious metals stewardship,” he said. 

While not specified by the state of Texas, they could be worried about the concept of de-dollarization, which, according to J.P. Morgan, is happening because of a significant reduction in the use of the U.S. dollar as a reserve currency.

“A candidate reserve currency must be perceived as safe and stable and must provide a source of liquidity that is sufficient to meet growing global demand,” Alexander Wise, who covers long-term strategy at J.P. Morgan, said.

It is unknown how much Texas will continue to invest in cryptocurrency in the future.