On Thursday, senators in the Lone Star state approved a bill to create a strategic Bitcoin reserve, pending another vote by lawmakers and the governor’s signature.
Proponents claim a Bitcoin reserve will serve as a hedge against inflation in the world's eighth-largest economy.
The bill now awaits a vote in the Texas House of Representatives before it will go to Texas Governor Greg Abbott for a signature.
Texas is among a growing number of states evaluating a strategic Bitcoin reserve, according to the Bitcoin Reserve Monitor. Last month, lawmakers in South Dakota voted to postpone a similar strategic reserve bill, citing Bitcoin's long-term price volatility.
The vote in the Texas Senate ignited a maelstrom of discussion over its viability: “We don’t have stacks of dollar bills and safes like we did in medieval times. What we have is digital currency,” said Texas Senator Charles Schwertner, one of the co-sponsors of the bill.
"Texas cannot expect to put their money in a 1% savings account and keep up with inflation," he added. "We need to be forward-thinking as individuals or forward-thinking when it comes to financial assets and the investment of those financial assets."
“I would argue, and put forth, that because of central intervention and manipulation of the supply of currency, in this case, the U.S. dollar, the ability to spend money through printing money has caused the dollar to fall in value and fall in worth,” Schwertner explained.
Texas has courted the Bitcoin mining industry following its exodus from China by offering a slate of economic incentives. Miners benefit from a deregulated power grid and payments from the state grid operator, Electric Reliability Council of Texas (ERCOT), for shutting down during high-demand periods.
“We are promoting [crypto], we are advancing it,” Governor Greg Abbott said at a crypto event in 2022. “I would say we are providing the platform for those who are involved in blockchain, for those who are involved in Bitcoin, to make sure they are going to have a location they can come to.”