Texas Set to Create State Bitcoin Reserve that Would Accept Private Donations

The State of Texas is set to get into the cryptocurrency financing match as the Texas House passed a Senate bill on Wednesday to create a Strategic Bitcoin Reserve that could use millions of taxpayer dollars to purchase cryptocurrency Senate Bill will assuming Senate concurrence and the governor s sign-off establish a new establishment resources fund through which the state comptroller and a band of appointed advisors have broad discretion to invest in cryptocurrencies like Bitcoin The bill allows the state to appropriate funds from its coffers to finance those purchases The House version also restored a controversial provision that had been stripped in the upper chamber to allow private donations to the fund The House approved the measure with overwhelming bipartisan encouragement on a - vote with no debate over the wisdom of getting the state into the business of investing in highly speculative virtual coins Opponents included Republicans and Democrats The bill s lead champion GOP Senator Charles Schwertner has announced the state requirements to create this crypto fund not only as an official show of backing for the powerful digital currency industry but as a fiscal hedge against the strength of the U S dollar amid growing federal debt and global tumult Senate Bill is about recognizing digital assets not as a trend but as a strategic opportunity Representative Giovanni Capriglione who carried the bill in the House announced on the floor Tuesday With strong oversight clear boundaries and smart financial planning Texas can take a leadership role in the evolving digital market system Top Republican leaders in Texas including Governor Greg Abbott have gone out of their way to make the Lone Star State an epicenter of the crypto industry including of power-hungry bitcoin mines that have set up near rural towns and proven to be major nuisances for local residents SB was a top priority in the Senate and was one of the first bills passed by the upper chamber back in early March It was drafted in coordination with the Texas Blockchain Council an industry group representing a great number of of the largest crypto companies Schwertner s original bill however faced several opposition from members on his Business Commerce Committee particularly over a provision that would allow the state to accept donations of cryptocurrency from private citizens and corporations to the state reserve which critics revealed posed a pitfall for industry manipulation and undue influence If someone decides to give billion worth of crypto to the state they re creating a region for themselves and could effectively manipulate the region using the imprimatur of the state Senator Nathan Johnson a Dallas Democrat announced during the February hearing I don t want the state to be a tool of an investor I would want this to be limited to just state allocations I don t want billionaire tech bros owning a branch of the state administration Schwertner amended the bill to remove that private donation component before it was then passed by the committee That provision was added back into the House version by Capriglione though it limits prospective donors only to individuals who are domiciled in Texas Schwertner indicated assistance for the House version in a social media post SB has officially passed both chambers and Texas is now on the verge of establishing the Texas Strategic Bitcoin Reserve Schwertner s office did not forthwith response to a request for comment Johnson s office disclosed that the Dallas senator would vote against concurrence with the private donation clause To show precedent for such a state reserve Capriglione has pointed to the passage of his bill back in to create a state-run gold depository to allow the state to invest in the precious metal Bitcoin and gold are quite the same both have a limited supply and its value is based on multiple world economies making it stable to economic distress or devaluing a currency across all countries he mentioned in a committee hearing on the bill in April However as Comptroller Glenn Hegar reported the Senate committee earlier this year the state never did become an investor in gold commodities and holds no gold in its treasuries But Bitcoin boosters are apparently intent on ensuring that the state does have the means to invest in crypto on the taxpayer s dime of lesson In the committee hearing Caprligione revealed that the Senate has included a budget rider contingent on passage of SB that would provide million to kick start the bitcoin reserve Crypto watchdogs have warned against state governments using the power of their purse to get into Bitcoin and even several crypto enthusiasts have warned that it s antithetical to the original purpose of digital currency getting out from under the boot of administration fiat currency There is completely nothing behind Bitcoin It has no strategic use Hillary Allen an American University law professor who studies cryptocurrencies previously explained the Texas Observer saying they are effectively a Ponzi like asset Still since President Donald Trump issued an executive order calling for the creation of a federal crypto stockpile several red states have taken up law to create similar state reserves Lawmakers in the majority of those states including Florida have rejected the idea So far New Hampshire is the only one to pass the idea into law Arizona s GOP legislature passed a Bitcoin reserve bill but the Democratic governor vetoed it Governor Abbott expressed apparent interest in the bill via double-eyes emoji from the session s early days The post Texas Set to Create State Bitcoin Reserve that Would Accept Private Donations appeared first on The Texas Observer