Texas legislators wrap up Bitcoin reserve specifics, eliminate staking before final vote

Texas lawmakers are progressing towards establishing a Bitcoin reserve for the state.

On May 27, a collaborative Conference Committee, made up of members from both the House and Senate, finalized the revised version of Senate Bill 21 (SB 21), known as the Texas Strategic Bitcoin Reserve Act.

The committee highlighted that a central topic of discussion concerned the criteria determining which digital assets would qualify for inclusion in the state’s reserve.

The Senate’s initial suggestion required that cryptocurrencies in the reserve maintain a market cap of $500 billion for a duration of 12 months. Conversely, the House took a more cautious stance, advocating for a longer qualifying period for these assets.

The finalized legislation reflects the House’s viewpoint, extending the qualification duration to a consecutive 24 months at the specified $500 billion mark.

Another important modification involved the omission of a staking provision.

While the House had previously included a provision allowing the Texas Comptroller to engage in staking activities, this aspect was removed in the conclusive version. As a result, Texas will manage digital assets without actively earning returns from staking.

SB 21 empowers the Texas Comptroller to collaborate with external entities for the management of assets. This includes engaging a qualified custodian equipped with secure storage solutions, a liquidity provider to assist with transactions, and an independent certified public accountant for reserve audits. The legislation also permits the use of derivatives if advantageous for the fund.

Furthermore, the bill creates a five-member Texas Strategic Bitcoin Reserve Advisory Committee tasked with advising on methods of asset valuation and offering recommendations for responsible investment strategies.

Additionally, the Comptroller must issue a comprehensive financial report every two years, with updates scheduled for December 31 of each even-numbered year.

In the meantime, the Committee stated:

“The fiscal impact of the bill cannot be estimated. It is unknown what appropriations would be made for the reserve and the amount and value of qualifying cryptocurrency that would be purchased.”

With the final revisions completed, SB 21 is now awaiting a vote in both legislative chambers before it can be sent to Governor Greg Abbott for approval. While Abbott has not made an official public endorsement, his recent online activity indicates an increasing inclination towards Bitcoin adoption in Texas.