Texas Invests $5 Million in Bitcoin Under New Law

Texas has become the first state in the nation to allocate public funds to bitcoin following the implementation of Senate Bill 21, a law passed earlier this year that authorizes the creation of a state-managed digital asset reserve.

In a post on X, Texas Blockchain Council President Lee Bratcher wrote that the state had made a $10 million bitcoin investment through a spot exchange-traded fund executed through the purchase of shares in the iShares Bitcoin Trust, an exchange-traded fund managed by BlackRock. The purchase itself was actually $5 million, but the state's reserve fund totals $10 million. It was the first action taken under SB 21, which was introduced during the 89th legislative session and signed by the governor in June.

The law permits the state to hold and manage bitcoin and other digital assets through a designated reserve, intended to diversify state holdings and serve as a strategic hedge. Under SB 21, the Comptroller’s Office is also tasked with developing custody, security and audit frameworks for any digital assets acquired through the fund. Although the initial investment was made via an ETF rather than direct custody, the law outlines an eventual shift toward the state managing its own digital wallets.

For technology vendors, the implementation of SB 21 may signal upcoming procurement opportunities. The law authorizes the comptroller to adopt rules and procedures related to storage, security, insurance, risk mitigation and auditability of digital assets. This creates a potential need for services ranging from secure wallet infrastructure to compliance and reporting systems that align with public-sector standards.

In addition to the investment authority, the law requires regular reporting to the Legislature on the reserve’s performance and its operational security. These requirements may drive demand for analytics, monitoring tools and independent auditing platforms that can be integrated into a state-run digital asset program.

While the $10 million purchase is modest compared to the state’s broader financial portfolio, the move places Texas at the forefront of digital asset adoption among public entities. It also aligns with the state’s broader interest in blockchain technology, which has included legislative workgroups and studies on applications in identity verification, supply chain transparency and energy market operations.

The Comptroller’s Office has not yet issued a solicitation request related to custody or support services. However, SB 21 gives the agency wide latitude to develop partnerships and acquire technology to manage the reserve.

Texas’ investment comes as more jurisdictions consider how digital assets might factor into long-term fiscal and technology strategies. Whether other states follow suit remains to be seen. In the meantime, Texas has positioned itself as the first to bring bitcoin into its treasury, and potentially the first to develop a procurement ecosystem around it.