- Texas Democrat Representative Ron Reynolds has proposed legislation to cap Bitcoin investments at $250 million for the state and $10 million for local governments.
- The bill contrasts with a recently passed Texas Senate proposal to establish an unlimited strategic Bitcoin reserve.
- The competing state initiatives emerge as President Trump’s executive order for a federal Bitcoin reserve faces scrutiny over implementation authority.
Texas lawmaker proposes limits on government cryptocurrency investments, potentially capping the state’s Bitcoin holdings at $250 million. The bill, filed on March 10 by Representative Ron Reynolds, would restrict how much Texas authorities can allocate to digital assets from reserve funds, creating potential friction with broader crypto adoption plans.
According to the newly proposed legislation, Texas would face a $250 million ceiling on Bitcoin and other cryptocurrency investments from its Economic Stabilization Fund, commonly known as the “rainy day” fund. The bill extends similar restrictions to local governments, limiting municipal and county crypto investments to $10 million.
Reynolds’ proposal comes just days after the Texas Senate passed Bill SB 21 on March 6, which would establish a strategic Bitcoin reserve with apparently no investment cap for the state comptroller. The timing suggests competing visions for how Texas should approach cryptocurrency adoption in government finances.
The Bitcoin reserve initiative in Texas reflects a growing trend across Republican-controlled state legislatures following significant GOP victories in the 2024 election cycle. Texas Lieutenant Governor Dan Patrick had previously identified a Texas Bitcoin Reserve as a legislative priority for 2025, signaling strong support from the state’s Republican leadership.
Reynolds, a Democrat, appears to be taking a more cautious approach, though it remains unclear whether his bill aims to complement or restrict the Republican-led reserve initiative. If approved by lawmakers and signed by Governor Greg Abbott, Reynolds’ legislation would take effect September 1.
The state-level developments parallel federal actions, as President Donald Trump signed an executive order on March 7 establishing a “Strategic Bitcoin Reserve” and “Digital Asset Stockpile.” However, legal experts have questioned the president’s authority to implement such specific policies through executive action alone.
In response to potential legal limitations of the executive order, Wyoming Senator Cynthia Lummis reintroduced legislation on March 11 that would codify the proposed Bitcoin reserve into federal law through congressional action.
The competing Texas proposals highlight emerging partisan divisions on cryptocurrency policy, with Republicans generally favoring broader adoption while some Democrats push for stricter investment limits. The debate signals cryptocurrency’s evolving role in government finance as lawmakers determine appropriate guardrails for public fund exposure to digital assets.
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