Texas Representative Ron Reynolds has introduced a bill that could impose limits on how much state and local authorities can invest in Bitcoin (BTC) and other cryptocurrencies as reserve assets.
Filed on March 10, the proposed legislation seeks to restrict the state’s Economic Stabilization Fund, or “rainy day” fund, from allocating more than $250 million to cryptocurrencies. Additionally, Texas municipalities and counties would be capped at $10 million in crypto investments.
Bitcoin Reserve Proposal Sparks Policy Divide
Reynolds’ bill comes just days after the Texas Senate passed SB 21 on March 6, a bill aimed at establishing a strategic Bitcoin reserve for the state. The latest draft of SB 21 appears to set no limit on how much BTC the Texas comptroller could purchase for the reserve.
The idea of a state-backed Bitcoin reserve has gained momentum in Texas, particularly among Republican lawmakers. Lieutenant Governor Dan Patrick previously announced that a Texas Bitcoin Reserve was one of the state’s legislative priorities for 2025.
Political Uncertainty Over Bitcoin Legislation
It remains unclear whether Reynolds, a Democrat, is seeking to support the BTC reserve bill introduced by Republican State Senator Charles Schwertner or if his proposal is intended to curb crypto investments should the reserve bill become law.
If Reynolds’ bill passes the legislature and is signed by Governor Greg Abbott, it would take effect on September 1, 2025. Cointelegraph reached out to Reynolds’ office for comment but had not received a response at the time of publication.
Federal Bitcoin Reserve Debate Heats Up
The developments in Texas coincide with President Donald Trump’s executive order on March 7, which directed the creation of a federal “Strategic Bitcoin Reserve” and a “Digital Asset Stockpile.” However, legal experts have raised concerns over whether Trump has the executive authority to enact such policies without congressional approval.
Meanwhile, Wyoming Senator Cynthia Lummis reintroduced a bill on March 11 to formally establish the BTC reserve into federal law. The move underscores growing political interest in Bitcoin at both the state and federal levels, setting the stage for further regulatory battles over cryptocurrency adoption in government reserves.
