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Texas Lawmakers Consider Bitcoin Strategic Reserve Legislation

7 days ago
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TLDR

  • Texas lawmaker initiates preliminary talks about Bitcoin strategic reserve legislation
  • Similar bills already introduced in Pennsylvania and at federal level by Senator Lummis
  • Texas has 8th largest economy globally with $2.4 trillion GDP (2022)
  • SAF CEO Porter suggests reserves could protect US Bitcoin mining from foreign manipulation
  • Multiple politicians globally showing interest in government Bitcoin reserves

Multiple state lawmakers are beginning to explore the possibility of establishing government-held Bitcoin reserves, with Texas becoming the latest state to initiate preliminary discussions about such legislation.

The move comes as digital currency continues to gain attention from government bodies across the United States.

Dennis Porter, CEO of the Satoshi Action Fund (SAF), revealed at the North American Blockchain Summit in Texas that his organization has been in talks with a Texas lawmaker who has started early conversations about introducing strategic Bitcoin reserve legislation. The discussions are in their initial stages, with no formal bill yet drafted.

This development in Texas follows similar legislative efforts in other parts of the country. Pennsylvania lawmakers have already introduced a bill in their state’s House of Representatives that would allow the state treasury to hold up to 10% of its balance sheet in Bitcoin as a hedge against inflation.

At the federal level, U.S. Senator Cynthia Lummis took action in July by introducing legislation to establish a national Bitcoin strategic reserve. The proposed federal fund aims to use Bitcoin as a tool to hedge against national debt.

Texas holds a unique position in this conversation due to its economic strength. The Texas comptroller reports that the state maintained a GDP of $2.4 trillion in 2022, making it the world’s eighth-largest economy if it were an independent nation.

Porter presented practical arguments for establishing such reserves during his summit presentation. He highlighted concerns about the vulnerability of U.S. Bitcoin mining operations, which often operate with minimal profit margins. According to Porter, foreign actors could potentially disrupt these operations by manipulating Bitcoin prices.

The SAF CEO suggested that government-held Bitcoin reserves could act as a market stabilizer.

“A great way for us to protect ourselves from outside influence, undue influence from our foreign adversaries, is to be in the market buying and selling Bitcoin, acting as a shock absorber for all the incredible Bitcoin miners that we have here in this country,” Porter stated at the summit.

Interest in government Bitcoin holdings extends beyond U.S. borders. Polish presidential candidate Sławomir Mentzen recently announced his intention to create a Bitcoin reserve if elected in next year’s election, posting his commitment on social media platform X on November 17.

The concept has also gained traction in presidential politics. During his campaign, President-elect Donald Trump included the establishment of a “strategic Bitcoin stockpile” among his crypto-related promises.

Porter observed growing momentum behind the strategic reserve concept, noting that various jurisdictions appear to be racing to implement such legislation first. “We are very excited to have that race, a race where no matter who wins, all of us win,” he stated during the summit.

The discussions in Texas remain in early stages, with no timeline yet established for formal legislation. The lawmaker involved has not been publicly identified, and specific details about potential reserve sizes or implementation methods have not been disclosed.

Current federal and state laws would need to be carefully considered in crafting any strategic reserve legislation. Regulatory frameworks for government cryptocurrency holdings are still evolving, and any new legislation would need to address compliance with existing financial regulations.

The Pennsylvania bill provides one potential model, suggesting a specific percentage cap on Bitcoin holdings relative to total reserves. However, each state may need to develop its own approach based on local economic conditions and regulatory requirements.

The Texas discussions represent the latest development in an ongoing national conversation about government cryptocurrency holdings, joining existing legislative efforts in Pennsylvania and at the federal level.

Source: https://blockonomi.com/texas-lawmakers-consider-bitcoin-strategic-reserve-legislation/