Texas recently cemented its position as a cryptocurrency and business-friendly jurisdiction with the enactment of SB 21. Signed on June 20, 2025, SB 21 establishes the Texas Strategic Bitcoin Reserve, a state-managed fund that holds Bitcoin as a long-term investment. The Reserve, alongside other recent legislative moves by the state, creates opportunities for businesses in the cryptocurrency sector and beyond to operate in a more predictable and favorable jurisdiction with greater investment potential.

Only cryptocurrencies with an average market capitalization of at least $500 billion are eligible for the Reserve, making Bitcoin the only eligible currency at the moment. Funding will come from legislative appropriations, investment proceeds, dedicated revenue streams and voluntary cryptocurrency donations. Additionally, it operates independently of Texas’ general treasury system and is administered by the Texas Comptroller of Public Accounts. Oversight is provided by a five-person advisory committee that includes crypto-investment professionals. The Reserve is also structured to be transparent, as the Comptroller is required to publish a public report biennially detailing the fund’s value and administrative actions taken.

SB 21 aims to enhance the state’s financial resilience and act as a safeguard against inflation. HB 4488, also passed on June 20, 2025, further insulates the Reserve by ensuring that Reserve funds will not be swept into the state’s general revenue fund. HB 4488 and SB 21 underscore Texas’ intent to be a hub for global finance and digital asset innovation. For cryptocurrency businesses, the Reserve creates a more predictable operating environment and opportunities to attract greater investment.

Texas is the first state to commit public funds to a Bitcoin reserve, and it joins Arizona and New Hampshire as one of the first states to establish a Bitcoin reserve. SB 21 is Texas’ latest legislative effort in the cryptocurrency sector, as earlier legislation like HB 591, SB 29 and HB 19 laid the groundwork for Texas’ position as a pro-business and pro-cryptocurrency state.

HB 591, enacted on June 2, 2023, supported growth in both the energy and cryptocurrency sectors. The bill created an exemption of severance taxes on natural gas wells that would have produced legally vented or flared gas, inviting gas producers to make alternative uses of stranded gas, notably as power for Bitcoin mining operations. HB 591 encourages partnerships between gas producers and Bitcoin miners while allowing Bitcoin mining in Texas to operate more sustainably.

The reformed Texas Business Organization Code, the new Texas Business Court and the upcoming Texas Stock Exchange further strengthened Texas’ preeminence as a business-friendly state. Enacted on May 14, 2025, SB 29 significantly amended the Texas Business Organization Code to be more business friendly and included changes like the codification of the business judgment rule. By codifying the business judgment rule, a statutory presumption of good faith for entity directors and officers, Texas offers legal predictability conducive to business incorporation and litigation. SB 29 complements HB 19, legislation that established the Texas Business Court, a specialized venue for business disputes that uses judges with smaller dockets and vast experience in complex commercial matters. Lastly, the Texas Stock Exchange (TXSE) positions Texas as a national and global business powerhouse. TXSE provides a venue for US and international companies to access US equity capital markets and trade, and it plans to launch in 2026. These developments reflect Texas’ intentional efforts to establish itself as the premier state for incorporation, business litigation and investments. Read Texas Adopts Significant Pro-Business Corporate Law Reforms for deeper analysis from Bracewell’s corporate & securities lawyers about these changes.

From SB 21 to HB 19, recent legislation solidifies that Texas, more than any other state, is a welcoming environment for business entities. SB 21 is the latest expansion of Texas’ position as a business-friendly state and improves the state’s environment for businesses in the cryptocurrency sector.

*Bracewell summer associate Warda Mohamed provided invaluable assistance with this client alert.