AUSTIN (KXAN) — On Thursday, the Texas Senate voted to approve a bill to create a Texas Strategic Bitcoin reserve. The measure moves on to the House after a 25-5 vote.
State Sen. Charles Schwertner, who authored Senate Bill 21, said last month, “Cryptocurrency is what people believe it is. In this case, Bitcoin is finite and decentralized and something that [people] don’t have to worry about governments printing more and more money.”
Texas legislators are moving forward with the plan at the same time President Donald Trump signed an executive order creating a bitcoin reserve.
Kendall Garrison, CEO of Amplify Credit Union , told KXAN last month the government investing in cryptocurrency comes with risks.
“[Crypto] can be very, very volatile. It can go up very quickly, and it can turn around and go down just as quickly,” Garrison said. “Switching from very safe investments that the state of Texas has today—like government bonds, index funds, hedge fund investments—to cryptocurrency is really increasing the risk in that portfolio.”
If the reserve is created, it will be overseen by the Texas Comptroller. A five-person advisory committee, including the comptroller, would advise on the management of this reserve.
In basic terms, cryptocurrency is digital money. This type of currency is designed to work through an online network without a central authority — meaning it’s typically not backed by any government or banking institution — and transactions are recorded with technology called a blockchain.
Bitcoin is the largest and oldest cryptocurrency, although other assets like Ethereum, Tether and Dogecoin have gained popularity over the years. Some investors see cryptocurrency as a “digital alternative” to traditional money but it can be very volatile, and reliant on larger market conditions.
