USA – TEXAS Trends and Developments Contributed by: Chris Davis, Joshua Smeltzer and Suhani Patel, Gray Reed
digital asset ecosystem. It provides that federal bank- ing agencies (OCC, FDIC or the Board of Governors of the Federal Reserve System), the National Credit Union Administration and the Securities and Exchange Com- mission (SEC) may not require a depository institution, national bank, federal credit union, state credit union or trust company to include digital assets held in cus- tody that are not owned by the entity as a liability on the entity’s financial statement or balance sheet. The Act also explicitly addresses state-chartered deposi- tory institutions that have subsidiaries operating as permitted payment stablecoin issuers, allowing them to engage in money transmission or custody services in any state, subject to home-state liquidity and capi- tal requirements. Again, those wishing to participate must navigate both federal and state regulations. On 25 February 2026, the OCC issued a proposed rule to implement the GENIUS Act for state issuers, including Texas. The proposed rule “outlines require- ments for stablecoin issuance, custody practices, operational standards, and risk management. Notably, the OCC proposes setting a USD5 million minimum capital threshold for newly formed stablecoin issuers”. Texas must develop a framework that allows state- chartered institutions to participate in the stablecoin market before the July 2026 deadline. The first state to pass state-level stablecoin legislation is Florida, setting a model for other states to follow and adapt. With Texas’s existing regulatory infrastructure and its outsized role in the broader digital asset ecosystem, the state is well positioned to develop a competitive and protective framework. In November 2025, Texas purchased USD5 million dollars’ worth of Bitcoin exposure through Black- Rock’s iShares Bitcoin Trust ETF (IBIT). This marked the launch of the Strategic Bitcoin Reserve under the recently passed Senate Bill 21 (“SB 21”). According- ly, Texas became the very first state to invest public funds in Bitcoin. As of now, Bitcoin is the only digital asset that meets SB 21’s stringent rules and metrics on digital asset investments. It also allows other digital assets as adoption grows in the market. Although the initial purchase was conservative relative to the state’s The Texas Strategic Bitcoin Reserve What is the Strategic Bitcoin Reserve?
USD338 billion budget, the investment is an important confirmation of its belief in this new asset. Under SB 21, the Texas Strategic Bitcoin Reserve (the “Texas Bitcoin Reserve”) is established under the administration of the Texas Comptroller of Pub- lic Accounts. The Comptroller is authorised to buy, hold, sell and secure cryptocurrency through various methods. Acting Comptroller Kelly Hancock wrote in a statement “[o]ur goal for implementation is simple: build a secure reserve that strengthens the state’s bal- ance sheet. Texas is leading the way once again, and we’re proud to do it”. Fiscal prudence and the protection of Texans remain at the forefront of the Texas Senate’s priorities. There- fore, investments in cryptocurrencies must have main- tained a market capitalisation of at least USD500 bil- lion over the preceding 12 months – again, a threshold only currently met by Bitcoin. To guide investment strategies and risk management, the bill establishes the Texas Strategic Bitcoin Reserve Advisory Com- mittee, which consists of five cryptocurrency invest- ment experts. The Committee must produce and submit biennial reports to the Legislature detailing the reserve’s holdings, valuation changes and administra- tive actions. Complementing SB 21 is House Bill 1598 (“HB 1598”) – the Texas Strategic Bitcoin Reserve Act, which cre- ates a special fund in the state treasury outside the general revenue fund. Its sole purpose is to hold Bit- coin as a financial asset. HB 1598 recognises Bitcoin’s “decentralised nature and finite supply” as providing “unique qualities that can serve as a hedge against inflation and economic volatility”. The legislation also includes provisions for voluntary donations of Bitcoin by Texas residents and requires the Comptroller to store all Bitcoin for a minimum of five years before it may be transferred, sold or converted to another cryptocurrency. Why a Strategic Reserve matters When the Texas Bitcoin Reserve made its inaugural purchase, other states considered doing the same. However, none had pulled the trigger as of late 2025. Some states included cryptocurrency within pension fund investments, often through indirect exposure via
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