The state of Texas recently purchased about $5 million worth of bitcoin through a BlackRock-administered exchange-traded fund, a representative for the state comptroller’s office confirmed in an email to The Dallas Morning News on Monday.
The purchase came several months after Texas Gov. Greg Abbott signed into law Senate Bill 21, a high-profile and controversial legislative effort that enabled the Texas comptroller’s office to establish a publicly funded strategic cryptocurrency reserve.
It also amounts to one of the first-ever cryptocurrency transactions by a state government amid a broader federal and state government embrace of the recently surging crypto industry. Other states, including New Hampshire and Arizona , have passed similar crypto reserve bills.
And last year, Wisconsin’s and Michigan’s pension funds also purchased crypto, although with the comptroller’s purchase Texas has now become the first state to actually fund such a reserve.
“The industry is maturing and growing — it’ll continue to become more mainstream, and I think Texas staking out a leadership position will be very beneficial to Texans over time, similar to what the oil and gas industry has done over the last century,” said Lee Bratcher , president of the Texas Blockchain Council , a crypto lobbying group that championed the state legislative effort.
“I think we’re only scratching the surface,” Bratcher said.
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While the new state law did not include a specific funding amount, Texas legislators have since allocated $10 million to the reserve. The amount represents a tiny fraction of the state’s $338 billion state budget, although the legislation’s supporters have argued it still amounts to an important measure of support for an emerging industry.
“I think with Texas leading in this way, it’s going to reap benefits for many decades to come across the state,” Bratcher said. “From a job creation perspective to a tax revenue perspective and everything in between.”
Earlier this year, addressing legislators ahead of a vote on SB 21, state Rep. Giovanni Capriglione , R- Southlake — one of the driving forces behind the crypto push — struck a similar note, calling the reserve bill “a forward-thinking measure” that was about “recognizing digital assets not as a trend but as a strategic opportunity” and “strengthening the state’s fiscal resilience.”
Yet even if Texas’ public crypto investment remains minuscule, many economists and fiscal watchdogs have criticized SB 21 along with other recent pro-crypto legislation on multiple fronts, arguing it amounts to a lobbyist-driven effort that’s likely to benefit the crypto industry much more than the state’s residents.
And while Texas has recently embraced bitcoin mining and other facets of the industry, with even Abbott pushing to make the state a global “crypto leader,” critics have pointed out that cryptocurrency itself has long been plagued by concerns about scams, corruption and energy use.
I’m sure you’ll be shocked to learn that I think this is dumb. If it’s just one-time, $10 million dumb, I can shrug my shoulders and get on with my life. If it’s going to be a regular thing, with increasing amounts of money, it’s going to be a bigger problem. I have no idea where this ends, and I fully admit I could be wrong about crypto’s future – I’ve been wrong about it so far, after all. But with all the well–known problems associated with crypto (*), I’d really we rather spend our money, even our dumb speculative money, elsewhere. Texas Public Radio and the Trib have more.
(*) And water usage, and scams, and money laundering, and its use by cybercriminals, and on and on.
I have some tulip bulbs I would like to sell the state!