Texas Moves Forward with State-Level Bitcoin Reserve Through BlackRock Investment

Texas has taken a significant step in the cryptocurrency landscape by investing $5 million in BlackRock's iShares Bitcoin Trust. This move represents an initial effort to create the first-ever state-level bitcoin reserve in the United States.

Key Takeaways

Texas has invested $5 million in BlackRock’s iShares Bitcoin Trust, aiming to establish the first state-level bitcoin reserve in the U.S.
This acquisition follows legislation that allocated $10 million for bitcoin purchases.
The state is currently gathering industry input on best practices for managing a bitcoin reserve.
Other states like Michigan, Wisconsin, New Hampshire, and Arizona are also exploring bitcoin investments and reserves.
There is ongoing federal interest in Bitcoin investment, pending congressional approval.

Texas advances state-level bitcoin reserve with BlackRock investment - 1

The investment follows recent legislation that set aside $10 million for bitcoin purchases, positioning Texas to potentially lead as the first U.S. state to form a dedicated cryptocurrency reserve for strategic initiatives. Lee Bratcher, president of the Texas Blockchain Council, confirmed the state's investment in a statement last week.

Texas Strengthens its Commitment to Bitcoin

The state has just concluded a formal information-gathering phase where it consulted the cryptocurrency industry about the best practices for structuring, securing, and managing a bitcoin reserve. This process stemmed from a request for information issued in September, which sought industry insights on reserve management. Various industry representatives contributed responses detailing custody arrangements, security protocols, investment frameworks, and governance models based on state documents.

Texas officials are expected to release a formal request for proposals soon, aimed at selecting a custodian and establishing operational guidelines. The recent $5 million acquisition is viewed as a preliminary allocation rather than direct ownership of bitcoin as the state works to finalize custodian agreements, according to knowledgeable sources.

Other states have also explored bitcoin investments through public employee retirement funds. For instance, Michigan has invested in similar products, while Wisconsin made headlines by selling a $350 million allocation in May, as indicated by public records.

States like New Hampshire and Arizona are also exploring the creation of government-level cryptocurrency reserves, though they are still in the early development stages. New Hampshire has passed legislation to authorize a bitcoin reserve, but no transactions have yet occurred, according to State Representative Keith Ammon, an advocate for blockchain technology. Recently, the New Hampshire Business Finance Authority approved a $100 million bitcoin bond intended to finance a cryptocurrency-backed economic development fund through private sector investments.

Arizona, on the other hand, has enacted legislation that directs unclaimed cryptocurrency assets held by the state into a dedicated reserve, laying the groundwork for future crypto accumulation, even though a comprehensive reserve structure has yet to be established.

These state-level efforts coincide with former President Donald Trump's endorsement of a federal government Bitcoin investment. His administration initiated an executive order to plan for such a reserve; however, involved officials are currently waiting for congressional authorization to proceed, as reported by administration sources.